25. LEON CO vs. CA G.R. No.

123908 February 09, 1998

FACTS:

Private respondent Benito Ngo purchased from Nazario Gonzales a parcel of land known as Lot Nos. 7-A
and 7-B situated in Iriga City.

Antonio Ong, on the other hand, claiming to have purchased Lots Nos. 7-A and 7-B from Nazario
Gonzales through his attorney-in-fact Rustica Gonzales Rivera, filed an action against Benito Ngo with
the then Court of First Instance of Camarines Sur for annulment of sale, reconveyance and damages.

Antonio Ong and Benito Ngo assisted by their respective counsel executed an amicable settlement which
provided that Lot No. 7-A would belong to Antonio Ong and Lot No. 7-B to Benito Ngo.

However, before the same could be approved, a complaint-in-intervention was filed by petitioner Leon Co
alleging that it was agreed that Lot No. 7-B would go to him after paying respondent Benito Ngo
P49,500.00 for the lot. Petitioner presented as sole documentary basis of the alleged sale of the property
the Minutes of the special meeting of the Filipino-Chinese Chambers of Commerce.

ISSUE:

Was there a sale of the subject property between Petitioner and Private Respondent?

HELD:

NONE. Nothing in the document presented by Petitioner speaks of any agreement between petitioner and
private respondent wherein petitioner shall buy the property and private respondent to sell the same to
petitioner. What transpired during the meeting, as indicated in the Minutes, was that the relatives of
Antonio Ong and respondent Benito Ngo agreed to participate in the amicable settlement by contributing
their own funds for the purpose.

In fine, the evidence of petitioner does not indicate a perfection of the purported contract of sale. U nder
Art. 1475 of the Code, "the contract of sale is perfected at the moment there is meeting of the minds upon
the thing which is the object of the contract and upon the price. From that moment the parties may
reciprocally demand performance subject to the provisions of the law governing the form of contracts."

A definite agreement on the manner of payment of the price is an essential element in the formation of a
binding and enforceable contract of sale. 8 Petitioner's testimonial and documentary evidence did not
establish any definitive agreement or meeting of the minds between the parties concerning the price or
term of payment.

26. MAKATI SPORTS CLUB VS. CHENG G.R. No. 178523 June 16, 2010

FACTS:

Makati Sports Club Inc (MSCI) adopted a resolution authorizing the sale of its unissued shares.
Respondent Hodreal expressed his interest to buy a share but it was Mc Foods who acquired the same
from MSCI and in whose favor a stock certificate was issued.

Unknown to plaintiff, pending its negotiation for the sale of the shares with Mc Foods, the latter had
likewise been negotiating the sale of the same with Hodreal. Eventually, Hodreal was able to acquire the
share from Mc Foods when the latter made known its intention to resell the share. Mc Foods notified
MSCI of the sale to Hodreal and a new certificate of stock was issued. MSCIs complaint for fraud was
dismissed by the lower court, whose decision was affirmed by the Court of Appeals. Before the Supreme
Court, MSCI, among many of its contentions, alleged that the resale of the said share to the Hodreal
occurred before Mc Foods gained ownership over the said unissued share, thus the transfer from Mc
Foods to Hodreal is void.

ISSUE:

Whether or not the anticipated and expected ownership of shares of stock may be the object of a contract
of sale
HELD:
YES. Expected ownership of shares of stock may be the object of a contract of sale. Considering that Mc
Foods tendered its full payment to MSCI and the execution of the Deed of Sale, even assuming that it
was driven solely by the intent to speculate on the price of the share of stock, it had all the right to
negotiate and transact, at least on the anticipated and expected ownership of the share, with Hodreal. Mc
Foods had the inherent right flowing from its ownership of the stocks to demand the delivery of the stock
certificate in its name. The corporations obligation to register is ministerial upon the buyers acquisition of
ownership of the share of stock. MSCI, either by its board, its by-laws, or the act of its officers, cant then
create restrictions in stock transfers notwithstanding that the stock certificate, mere representation of
ownership, was issued at a later time.

27. HEIRS OF DEL ROSARIO VS. SANTOS G.R. No. L-46892

FACTS:

Amparo Del Rosario entered into a contract with spouses Santos whereby the latter sold to the former a
20,000 sq. m. of land which is to be segregated from Lot 1. Said lot forms part of the several lots
belonging to a certain Teofilo Custodio, of which lots, Attorney Santos (husband), by agreement with the
latter, as his attorneys fees, owns interests thereof.

Parties agreed that spouses Santos shall thereafter execute a Deed of Confirmation of Sale in favor of
Del Rosario as soon as the title has been released and the subdivision plan of said Lot 1 has been
approved by the Land Registration Commissioner. Due to the failure of the spouses Santos to execute the
deed after the fulfilment of the condition, Del Rosario claims malicious breach of a Deed of Sale.

Defendant-spouses alleged that the deed of sale was only an accommodation graciously extended, out of
close friendship between the defendants and the plaintiff, hence, tantamount to waiver, abandonment or
otherwise extinguishment of the demand set forth in the complaint. Finally, defendants alleged that the
claim on which the action or suit is founded is unenforceable under the statute of frauds and that the
cause or object of the contract did not exist at the time of the transaction.

ISSUE:

Is the Deed of Sale valid as to the CAUSE of the contract?

HELD:

Yes. The Supreme Court held that the execution of the Deed of Sale is valid notwithstanding the lack of
any title to the lot by appellants at the time of execution of the Deed of Sale in favor of appellee as there
can be a sale of an expected thing in accordance with Article 1461 of the NCC: Article 1461: Things
having a potential existence may be the object of the contract of sale. The efficacy of the sale of a mere
hope of expectancy is deemed subject to the condition that the thing will come into existence. The sale of
a vain hope or expectancy is void. The case at bar is not a case of a vain hope or expectancy which is
void under the law. The expectant right came into existence or materialized for the appellants actually
derived titles from Lot 1 which subsequently became the object of subdivision.

28. REYES VS. TUPARAN G.R. No. 188064 June 01, 2011

FACTS:

Mila A. Reyes (petitioner) is a registered owner of a property where she put up a three-storey commercial
building (RBJ Building) and a residential apartment building; the other areas of the buildings including the
sidewalks were being leased and occupied by tenants and street vendors.

Respondent leased from petitioner a space on the ground floor of the RBJ Building for her pawnshop
business.

Petitioner then decided to sell her real properties so she could liquidate her bank loan in FSL bank and
finance her businesses. As a gesture of friendship, respondent verbally offered to conditionally buy
petitioners real properties and to assume the bank loan. Petitioner verbally accepted the offer. Their
agreements were never reduced into writing.

The parties and FSL Bank executed the corresponding Deed of Conditional Sale of Real Properties with
Assumption of Mortgage. Under the Deed, respondent was bound to pay the petitioner a lump sum of
1.2 million pesos without interest as part of the purchase price in three (3) fixed installments.
Respondent defaulted in her payments leaving a balance of more than P800K. Thus, petitioner filed a
petition to rescind the contract.

Respondent countered that the tripartite agreement erroneously designated by the petitioner as a Deed of
Conditional Sale of Real Property with Assumption of Mortgage was actually a pure and absolute contract
of sale with a term period. It could not be considered a conditional sale because the acquisition of
contractual rights and the performance of the obligation therein did not depend upon a future and
uncertain event.

The RTC considered the Deed of Conditional Sale of Real Property with Assumption of Mortgage
executed by and among the two parties and FSL Bank a contract to sell, and not a contract of sale.

The CA affirmed the decision with modification. The CA agreed with the RTC that the contract entered into
by the parties is a contract to sell but ruled that the remedy of rescission could not apply because the
respondent's failure to pay the petitioner the balance of the purchase was not a breach of contract, but
merely an event that prevented the seller (petitioner) from conveying title to the purchaser (respondent).

ISSUE:

Is the agreement of the parties a contract to sell?

HELD:

YES. The Court agrees with the ruling of the courts below that the subject Deed of Conditional Sale with
Assumption of Mortgage entered into by and among the two parties and FSL Bank on November 26,
1990 is a contract to sell and not a contract of sale.

The title and ownership of the subject properties remains with the petitioner until the respondent fully pays
the balance of the purchase price and the assumed mortgage obligation. Thereafter, FSL Bank shall then
issue the corresponding deed of cancellation of mortgage and the petitioner shall execute the
corresponding deed of absolute sale in favor of the respondent.

Accordingly, the petitioner's obligation to sell the subject properties becomes demandable only upon the
happening of the positive suspensive condition, which is the respondent's full payment of the purchase
price. Without respondent's full payment, there can be no breach of contract to speak of because
petitioner has no obligation yet to turn over the title. Respondent's failure to pay in full the purchase price
is not the breach of contract contemplated under Article 1191 of the New Civil Code but rather just an
event that prevents the petitioner from being bound to convey title to the respondent.

29. SOUTH WESTERN SUGAR VS. ATLANTIC GULF G.R. L-7382 June 29, 1955

FACTS:

Atlantic Gulf granted an option to Southwestern Company to buy its barge No. 10 for the sum of P30,000
to be exercised within a period of ninety days.

The Southwestern Company wrote to Atlantic Gulf advising the latter that it wanted "to exercise our option
at your earliest convenience" and requested that it be notified as soon as the barge was available. Atlantic
Gulf reiterating the unavailability of the barge, it further advised the Southwestern Company that since
there is still further work for it, and as this situation still applies" the barge could not be turned over to the
latter company.

Southwestern Company instituted the present action to compel the Atlantic Gulf to sell the barge in line
with the option, depositing with the court a check covering the sum of P30,000. This check however was
later withdrawn with the approval of the court.
On June 29, 1953, the Atlantic Gulf withdraw its "offer of option" with due notices to the Southwestern
Company stating as reason therefor that the option was granted merely as a favor. The Atlantic Gulf set
up as a defense the option to sell made by it to the Southwestern Company is null and void because it is
not supported by any consideration.

On the other hand, appellee contends that, even granting that the "offer of option" is not supported by any
consideration, that option became binding on appellant when the appellee gave notice to its acceptance,
and that having accepted it within the period of option, the offer can no longer be withdrawn and in any
event such withdrawal is ineffective.

ISSUE:

Whether the option granted to Southwestern Company has legal effect despite the absence of
consideration

HELD:

The option granted to Southwestern Company has no legal effect. There is no question that under article
1479 of the new Civil Code "an option to sell", or a "promise to buy or to sell", as used in said article, to be
valid must be "supported by a consideration distinct from the price." This is clearly inferred from the
context of said article that a unilateral promise to buy or sell, even if accepted, is only binding if supported
by a consideration. In other words, "an accepted unilateral promise" can only have a binding effect if
supported by a consideration, which means that the option can still be withdrawn, even if accepted, if the
same is not supported by any consideration. Here it is not disputed that the option is without
consideration. It can therefore be withdrawn notwithstanding the acceptance made of it by appellee.

It is true that under article 1324 of the new Civil Code, the general rule regarding offer and acceptance is
that, when the offerer gives to the offeree a certain period to accept, "the offer may be withdrawn at any
time before acceptance" except when the option is founded upon consideration, but this general rule must
be interpreted as modified by the provision of article 1479 above referred to, which applies to "a promise
to buy and sell" specifically. As already stated, this rule requires that a promise to sell to be valid must be
supported by a consideration distinct from the price.

30. MODINA VS. CA G.R. No. 109355 October 29, 1999

FACTS:

Merlinda Chiang sold the subject property to her husband Ramon Chiang who subsequently sold the
same to the Petitioner Serafina Modina, as evidenced by a Deed of Sale.

Merlina presented sought the declaration of nullity of the Deed of Sale between her husband and Modina
on the ground that the titles of the parcels of land in dispute were never legally transferred to her
husband. Fraudulent acts were allegedly employed by him to obtain a Torrens Title in his favor. However,
she confirmed the validity of the lease contracts with the other private respondents. The trial court granted
the petition.

On appeal, Petitioner theorizes that the sale between the spouses is null and void for being violative of
Article 1490 3 of the New Civil Code prohibiting sales between spouses. Consequently, what is applicable
is Article 1412 4 supra on the principle of in pari delicto, which leaves both guilty parties where they are,
and keeps undisturbed the rights of third persons to whom the lots involved were sold.

ISSUE:

Whether Merlinda is barred by the principle of in pari delicto from questioning subject Deed of Sale

HELD:

NO. There is no sufficient evidence establishing fault on the part of MERLINDA, and therefore, the
principle of in pari delicto is inapplicable and the sale was void for want of consideration. In effect,
MERLINDA can recover the lots sold by her husband to petitioner MODINA. However, the Court of
Appeals ruled that the sale was void for violating Article 1490 of the Civil Code, which prohibits sales
between spouses.

The principle of in pari delicto non oritur actio 6 denies all recovery to the guilty parties inter se. It applies
to cases where the nullity arises from the illegality of the consideration or the purpose of the
contract. 7 When two persons are equally at fault, the law does not relieve them. The exception to this
general rule is when the principle is invoked with respect to inexistent contracts.

It bears emphasizing that as the contracts under controversy are inexistent contracts within legal
contemplation. Articles 1411 and 1412 of the New Civil Code are inapplicable. In pari delicto doctrine
applies only to contracts with illegal consideration or subject matter, whether the attendant facts constitute
an offense or misdemeanor or whether the consideration involved is merely rendered illegal.