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Regina Dizon et al v. CA and Overland Express Lines, Inc.

upon inquiry and must discover upon his peril the authority of
G.R. No. 122544 January 28, 1999 the agent. As provided in Article 1868 of the New Civil Code,
Martinez, J. there was no showing that petitioners consented to the act of
Alice A. Dizon nor authorized her to act on their behalf with
FACTS: regard to her transaction with private respondent. The most
Overland Express Lines, Inc. entered into a Contract of Lease prudent thing private respondent should have done was to
with Option to Buy with petitioners involving a 1,755.80 ascertain the extent of the authority of Alice A. Dizon. Being
square meter parcel of land situated at corner MacArthur negligent in this regard, private respondent cannot seek relief
Highway and South H Street, Diliman, Quezon City. The term on the basis of a supposed agency.
of the lease was for 1 year commencing from May 16, 1974 up Every person dealing with an agent is put upon inquiry and
to May 15, 1975. During this period, Overland Express Lines must discover upon his peril the authority of the agent. If he
was granted an option to purchase for the amount of P3,000.00 does not make such inquiry, he is chargeable with knowledge
per square meter. Thereafter, the lease shall be on a per month of the agents authority, and his ignorance of that authority will
basis with a monthly rental of P3,000.00. not be any excuse. Persons dealing with an assumed agency,
For failure of Overland Express Lines to pay the increased whether the assumed agency be a general or special one, are
rental of P8,000.00 per month effective June 1976, petitioners bound at their peril, if they would hold the principal, to
filed an action for ejectment against it. The lower court ascertain not only the fact of the agency but also the nature and
rendered judgment ordering Overland Express Lines to vacate extent of the authority, and in case either is controverted, the
the leased premises and to pay the sum of P624,000.00 burden of proof is upon them to establish it.
representing rentals in arrears and/or as damages in the form
of reasonable compensation for the use and occupation of the
FULE vs CA (268 SCRA 698)
premises during the period of illegal detainer from June 1976
to November 1982 at the monthly rental of P8,000.00, less
Facts: Fr. Antonio Jacobe initially mortgage a 10-hectare property
payments made, plus 12% interest per annum from November
in Tanay, Rizal (covered by TCT 320725) to the Rural Bank of
18, 1976, the date of filing of the complaint, until fully paid, the
Alaminos, Laguna to secure a loan in the amount of P10,000. Said
sum of P8,000.00 a month starting December 1982, until
mortgage was later foreclosed and the property offered for public
Overland Express Lines fully vacates the premises, and to pay
auction upon his default. In June 1984, Gregorio Fule, as
P20,000.00 as and by way of attorneys fees.
corporate secretary of the bank, asked Remelia Dichoso andOlivia
Mendoza to look for a buyer who might be interested in the Tanay
ISSUE: WON Overland Express Lines actually paid the alleged property. The two found one in the person of Dr. Ninevetch Cruz.
P300,000.00 to Fidela Dizon, as representative (agent) of It so happened that in January of said year, Gregorio Fule, also a
petitioners in consideration of the option jeweler, has shown interest in buying a pair of emerald-cut
diamond earrings owned by Dr. Cruz. Dr. Cruz has declined Fules
HELD: No. offer to buy said jewelry for P100,000; and a subsequent bid by
CA opined that the payment by Overland Express Lines of Fule to buy them for US$6,000 at $1 to P25 while making a sketch
P300,000.00 as partial payment for the leased property, which of said jewelry during an inspection at the lobby of Prudential
petitioners accepted (through Alice A. Dizon) and for which an Bank (the latter instance was declined, since the exchange rate
official receipt was issued, was the operative act that gave rise appreciated to P19 per dollar). Subsequently, however,
to a perfected contract of sale, and that for failure of petitioners negotiations for the barter of the jewelry and the Tanay property
to deny receipt thereof, Overland Express Lines can therefore ensued. Atty. Belarmino was requested by Dr. Cruz to check the
assume that Alice A. Dizon, acting as agent of petitioners, was property and found out that no sale or barter was feasible as the
authorized by them to receive the money in their behalf. CA 1-year period of redemption has not expired. In an effort to cut
went further by stating that in fact, what was entered into was through any legal impediment, Fule executed on 19 October 1984,
a conditional contract of sale wherein ownership over the a deed of redemption on behalf of Fr. Jacobe purportedly in the
leased property shall not pass to the Overland Express Lines amount of P15,987.78, and on even date, Fr. Jacobe sold the
until it has fully paid the purchase price. Since Overland property to Fule for P75,000.00. The haste with which the two
Express Lines did not consign to the court the balance of the deeds were executed is shown by the fact that the deed of sale
purchase price and continued to occupy the subject premises, it was notarized ahead of the deed of redemption. As Dr. Cruz had
had the obligation to pay the amount of P1,700.00 in monthly already agreed to the proposed barter, Fule went to Prudential
rentals until full payment of the purchase price. Bank to take a look at the jewelry.
In an attempt to resurrect the lapsed option, Overland Express
Lines gave P300,000.00 to petitioners (thru Alice A. Dizon) on On 23 October 1984, Fule met Atty. Belarmino at the latters
the erroneous presumption that the said amount tendered residence to prepare the documents of sale. Atty. Belarmino
would constitute a perfected contract of sale pursuant to the accordingly caused the preparation of a deed of absolute sale
contract of lease with option to buy. There was no valid consent while Fule and Dr. Cruz attended to the safekeeping of the
by the petitioners (as co-owners of the leased premises) on the jewelry. The following day, Fule, together with Dichoso and
supposed sale entered into by Alice A. Dizon, as petitioners Mendoza, arrived at the residence of Atty. Belarmino to finally
alleged agent, and Overland Express Lines. The basis for agency execute a deed of absolute sale. Fule signed the deed and gave
is representation and a person dealing with an agent is put Atty. Belarmino the amount of P13,700.00 for necessary expenses
in the transfer of title over the Tanay property; and issued a Issue: Whether the sale should be nullified on the ground of fraud
certification to the effect that the actual consideration of the sale
was P200,000.00 and not P80,000.00 as indicated in the deed of Held: A contract of sale is perfected at the moment there is a
absolute sale (the disparity purportedly aimed at minimizing the meeting of the minds upon the thing which is the object of the
amount of the capital gains tax that Fule would have to shoulder). contract and upon the price. Being consensual, a contract of sale
Since the jewelry was appraised only atP160,000.00, the parties has the force of law between the contracting parties and they are
agreed that the balance of P40,000.00 would just be paid later in expected to abide in good faith by their respective contractual
cash. Thereafter, at the bank, as pre-arranged, Dr. Cruz and the commitments. It is evident from the facts of the case that there
cashier opened the safety deposit box, and delivered the contents was a meeting of the minds between petitioner and Dr. Cruz. As
thereof to Fule. Fule inspected the jewelry, near the electric light such, they are bound by the contract unless there are reasons or
at the banks lobby, for 10-15 minutes. Fule expressed his circumstances that warrant its nullification.
satisfaction by nodding his head when asked by Dr. Cruz if the
jewelry was okay. For services rendered, Fule paid the agents, Contracts that are voidable or annullable, even though there may
Dichoso and Mendoza, the amount of US$300.00 and some pieces have been no damage to the contracting parties are: (1) those
of jewelry. He did not, however, give them half of the pair of where one of the parties is incapable of giving consent to a
earrings in question, which he had earlier promised. Later in the contract; and (2) those where the consent is vitiated by mistake,
evening, Fule arrived at the residence of Atty. Belarmino violence, intimidation, undue influence or fraud. The records,
complaining that the jewelry given him was fake. Dichoso, who however, are bare of any evidence manifesting that private
borrowed the car of Dr. Cruz, called up Atty. Belarmino. Informed respondents employed such insidious words or machinations to
that Fule was at the lawyers house, went there posthaste entice petitioner into entering the contract of barter. It was in fact
thinking that Fule had finally agreed to give them half of the pair petitioner who resorted to machinations to convince Dr. Cruz to
of earrings, only to find Fule demonstrating with a tester that the exchange her jewelry for the Tanay property.
earrings were fake. Fule then accused Dichoso and Mendoza of
Furthermore, petitioner was afforded the reasonable opportunity
deceiving him which they, however, denied. They countered that
required in Article 1584 of the Civil Code within which to
Fule could not have been fooled because he had vast experience
examine the jewelry as he in fact accepted them when asked by
regarding jewelry. Fule nonetheless took back the US$300.00 and
Dr. Cruz if he was satisfied with the same. By taking the jewelry
jewelry he had given them. Thereafter, the group decided to go to
outside the bank, petitioner executed an act which was more
the house of a certain Macario Dimayuga, a jeweler, to have the
consistent with his exercise of ownership over it. This gains
earrings tested. Dimayuga, after taking one look at the earrings,
credence when it is borne in mind that he himself had earlier
immediately declared them counterfeit. At around 9:30 p.m., Fule
delivered the Tanay property to Dr. Cruz by affixing his signature
went to one Atty. Reynaldo Alcantara residing at Lakeside
to the contract of sale. That after two hours he later claimed that
Subdivision in San Pablo City, complaining about the fake jewelry.
the jewelry was not the one he intended in exchange for his Tanay
Upon being advised by the latter, Fule reported the matter to the
property, could not sever the juridical tie that now bound him
police station where Dichoso and Mendoza likewise executed
and Dr. Cruz. The nature and value of the thing he had taken
sworn statements. On 26 October 1984, Fule filed a complaint
preclude its return after that supervening period within which
before the RTC San Pablo City against private respondents
anything could have happened, not excluding the alteration of the
praying, among other things, that the contract of sale over the
jewelry or its being switched with an inferior kind.
Tanay property be declared null and void on the ground of fraud
and deceit. On 30October 1984, the lower court issued a Ownership over the parcel of land and the pair of emerald-cut
temporary restraining order directing the Register of Deeds of diamond earrings had been transferred to Dr. Cruz and petitioner,
Rizal to refrain from acting on the pertinent documents involved respectively, upon the actual and constructive delivery thereof.
in the transaction. On 20 November 1984, however, the same Said contract of sale being absolute in nature, title passed to the
court lifted its previous order and denied the prayer for a writ of vendee upon delivery of the thing sold since there was no
preliminary injunction. After trial, the lower court rendered its stipulation in the contract that title to the property sold has been
decision on 7March 1989; holding that the genuine pair of reserved in the seller until full payment of the price or that the
earrings used as consideration for the sale was delivered by Dr. vendor has the right to unilaterally resolve the contract the
Cruz to Fule, thatthe contract was valid even if the agreement moment the buyer fails to pay within a fixed period.
between the parties was principally a barter contract, that the
agreement has been consummated at the time the principal While it is true that the amount of P40,000.00 forming part of the
parties parted ways at the bank, and that damages are due to the consideration was still payable to petitioner, its nonpayment by
defendants. Dr. Cruz is not a sufficient cause to invalidate the contract or bar
the transfer of ownership and possession of the things exchanged
From the trial courts adverse decision, petitioner elevated the considering the fact that their contract is silent as to when it
matter to the Court of Appeals. On 20 October 1992, the Court of becomes due and demandable.
Appeals, however, rendered a decision affirming in toto the lower
courts decision. His motion for reconsideration having been The Supreme Court affirmed in toto the decision of the Court of
denied on 19 October 1993. Hence, the petition for review on Appeals, but ordered Dr. Cruz to pay Fule the balance of
certiorari. thepurchase price of P40,000 within 10 days from the finality of
the decision; with costs against petitioner.
RATIO:

CRUZ vs. FERNANDO G.R. NO. 145470 December 9, 2005 Under Article 1458 of the Civil Code, a contract of sale is
a contract by which one of the contracting parties
obligates himself to transfer the ownership and to
FACTS: deliver a determinate thing, and the other to pay
therefor a price certain in money or its equivalent.
Petition for review on certiorari assailing CAs Decision Article 1475 of the Code further provides that the
in dismissing petitioners appeal and affirming decision contract of sale is perfected at the moment there is
of the RTC meeting of the minds upon the thing which is the object
of the contract and upon the price. From that moment
Petitioners Luis V. Cruz and Aida Cruz (Cruz) are the parties may reciprocally demand performance
occupants of the front portion of a 710-square meter subject to the provisions of the law governing the form
of contracts.
Respondents spouses Alejandro Fernando, Sr. and Rita
Fernando (Fernand) filed before the RTC a complaint In a contract of sale, the title to the property passes to
for accion publiciana against petitioners, demanding the the vendee upon the delivery of the thing sold, as
latter to vacate the premises and to pay the amount distinguished from a contract to sell where ownership
of P500.00 a month as reasonable rental for the use is, by agreement, reserved in the vendor and is not to
alleging they are the owners of the property having pass to the vendee until full payment of the purchase
brought from spouses Gloriosos evidenced by a Deed of price.8 Otherwise stated, in a contract of sale, the vendor
Sale dated March 1987 and such offer to sell is loses ownership over the property and cannot recover it
embodied in a Kasunduan dated August 6, 1983 until and unless the contract is resolved or rescinded;
executed before the Barangay Captain. But despite whereas, in a contract to sell, title is retained by the
repeated demands, petitioners refused to vacate the vendor until full payment of the price. In the latter
contract, payment of the price is a positive suspensive
property
condition, failure of which is not a breach but an event
Petitioners filed a Motion to Dismiss but the RTC that prevents the obligation of the vendor to convey title
from becoming effective.
dismissed it for lack of merit.

Petitioners Answer: Kasunduan is a perfected contract But the Kasunduans terms and conditions show that it
of sale and that the agreement has already been is a contract to sell and not a contract of sale because
"partially consummated" as they already relocated their there is an absence of a definite manner of payment of
house from the rear portion of the lot to the front the purchase price, such being an essential element to a
portion that was sold to them, Mrs. Glorioso prevented contract of sale, what it merely provides is the purchase
the complete consummation of the sale when she price for the 213-square meter property at P40.00 per
refused to have the exact boundaries of the lot. And that square meter absent such, it is only a contract to sell or
a mere offer. the Kasunduan merely provides that the
respondents are buyers in bad faith.
expenses for the survey will be divided between them
RTC rendered a Decision in favor of respondents as and that each party should give an amount of no less
than P400.00. Nowhere is it stated that the survey is a
plaintiffs was able to prove by preponderance of
condition precedent for the payment of the purchase
evidence the case of accion publiciana. Court ordered
price.
defendants and all persons claiming under them to
vacate peacefully the premises in question and to
remove their house therefore and to pay plaintiff the And Gloriosos only agreed to sell a portion of the
property and that the portion to be sold measures 213
sum of P500.00 as reasonable rental per month
square meters, absence of any formal deed of
beginning October 21, 1994, when the case was filed
conveyance is a strong indication that the parties did
before this Court, and every month thereafter until they not intend immediate transfer of ownership
vacate the subject premises and to pay the costs of suit.
The counter claim is hereby DISMISSED for lack of merit
Normally, in a contract to sell, the payment of the
Petitioner appealed to the CA but was dismissed, hence purchase price is the positive suspensive condition
this petition. upon which the transfer of ownership depends. 13 The
parties, however, are not prohibited from stipulating
ISSUES: other lawful conditions that must be fulfilled in order
for the contract to be converted from a contract to sell
1. Whether the Honorable Court of Appeals committed an or at the most an executory sale into an executed one
error of law in holding that the Agreement (Kasunduan)
between the parties was a "mere offer to sell," and not a ISSUE 2: Whether the Honorable Court of Appeals committed an
perfected "Contract of Purchase and Sale"? (Whether or error of law in not holding that where the parties clearly gave the
not what transpired between the Cruzes and the petitioners a period of time within which to pay the price. (but
Gloriosos was a contract of sale) did not fix said period, the remedy of the vendors is to ask the
Court to fix the period for the payment of the price, and not an
HELD: No. CA ruled correctly. The Kasunduan is only a contract to "accion publiciana"?)
sell since it didnt have a specific manner of payment
HELD: No. The CA correctly ruled. be deemed a buyer in bad faith and the prospective
buyer cannot seek the relief of reconveyance of the
Aside from the payment of the purchase price, there property. There is no double sale in such case. Title to
existed another suspensive condition,i.e.: that the property will transfer to the buyer after registration
petitioners will relocate their house to the portion they because there is no defect in the owner-sellers title per
bought or will buy by January 31, 1984. se, but the latter, of course, may be sued for damages by
the intending buyer.

Petitioners failed to abide by the express condition that


they should relocate to the rear portion of the property A person who occupies the land of another at the
being bought by January 31, 1984. Indeed, latter's forbearance or permission without any contract
the Kasunduan discloses that it is the rear portion that between them is necessarily bound by an implied
was being sold by the Gloriosos, and not the front promise that he will vacate upon demand.
portion as petitioners stubbornly claim
Considering that petitioners continued possession of
This condition is a suspensive condition noncompliance the property has already been rendered unlawful, they
of which prevented the Gloriosos from proceeding with are bound to pay reasonable rental for the use and
the sale and ultimately transferring title to petitioners; occupation thereof, which in this case was appropriately
and the Kasunduan from having obligatory force for by the RTC at P500.00 per month beginning October 21,
petitioners did not transfer their house in the front 1994 when respondents filed the case against them
portion to the rear portion. Thus, Gloriosos has no until they vacate the premises.
obligation to consider subject property as sold to
petitioners because the latters non-fulfillment of the WHEREFORE, the petition is DENIED. The Decision of the Court
suspensive condition rendered the contract to sell of Appeals is affirmed.
ineffective and unperfected.

Petitioners further claim that respondents have no


cause of action against them because their obligation to MELLIZA vs CITY OF ILOILO (23 SCRA 477)
pay the purchase price did not yet arise, as the
agreement did not provide for a period within which to Facts: Juliana Melliza during her lifetime owned, among other
pay the purchase price They argue that respondents properties, 3 parcels of residential land in Iloilo City (OCT
should have filed an action for specific performance or 3462).Said parcels of land were known as Lots Nos. 2, 5 and
judicial rescission before they can avail of accion
1214. The total area of Lot 1214 was 29,073 sq. m. On 27
publiciana. But petitioners never raised these
arguments during the proceedings before the RTC. Thus, November 1931she donated to the then Municipality of Iloilo,
issues raised for the first time on appeal and not raised 9,000 sq. m. of Lot 1214, to serve as site for the municipal hall.
timely in the proceedings in the lower court are barred The donation was however revoked by the parties for the reason
by estoppel that the area donated was found inadequate to meet the
requirements of the development plan of the municipality, the so-
There is no need for a judicial rescission of called Arellano Plan.
the Kasunduan for the simple reason that the obligation
of the Gloriosos to transfer the property to petitioners Subsequently, Lot 1214 was divided by Certeza Surveying Co., Inc.
has not yet arisen. There can be no rescission of an into Lots 1214-A and 1214-B. And still later, Lot 1214-B was
obligation that is nonexistent, considering that the
further divided into Lots 1214-B-1, Lot 1214-B-2 and Lot1214-B-
suspensive conditions therefor have not yet happened. 18
3. As approved by the Bureau of Lands, Lot 1214-B-1, with 4,562
sq. m., became known as Lot 1214-B; Lot 1214-B-2,with 6,653 sq.
Hence, petitioners have no superior right of ownership
m., was designated as Lot 1214-C; and Lot 1214-B-3, with 4,135
or possession to speak of. Their occupation of the
property was merely through the tolerance of the sq. m., became Lot 1214-D. On 15 November1932, Juliana Melliza
owners Hipolito, who was their relative and executed an instrument without any caption providing for the
subsequently, Teresita Glorioso, who is also their absolute sale involving all of lot 5, 7669 sq.m. of Lot 2 (sublots 2-
relative. They have no title or a contract of lease over the B and 2-C), and a portion of 10,788 sq. m. of Lot 1214 (sublots
property. Based as it was on mere tolerance, petitioners 1214-B2 and 1214-B3) in favor of the Municipal Government of
possession could neither ripen into ownership nor Iloilo for the sum of P6,422; these lots and portions being the
operate to bar any action by respondents to recover
ones needed by the municipal government for the construction of
absolute possession thereof.20
avenues, parks and City hall site according the Arellano plan.
ISSUE 3: Whether or not respondents are buyers in bad faith:
On 14 January 1938, Melliza sold her remaining interest in Lot
1214 to Remedios Sian Villanueva (thereafter TCT 18178).
HELD: No. They are buyers in good faith. Remedios in turn on 4 November1946 transferred her rights to
said portion of land to Pio Sian Melliza (thereafter TCT 2492).
In a contract to sell, there being no previous sale of the Annotated at the back of Pio Sian Mellizas title certificate was the
property, a third person buying such property despite
following that a portion of 10,788 sq. m. of Lot 1214 now
the fulfillment of the suspensive condition such as the
full payment of the purchase price, for instance, cannot designated as Lots 1412-B-2 and1214-B-3 of the subdivision plan
belongs to the Municipality of Iloilo as per instrument dated 15
November 1932. On 24 August 1949 the City of Iloilo, which will be found needed for the purpose at hand, the construction of
succeeded to the Municipality of Iloilo, donated the city hall site the city hall site.
together with the building thereon, to the University of the
Philippines (Iloilo branch). The site donated consisted of Lots The requirement of the law that a sale must have for its object a
1214-B, 1214-C and 1214-D, with a total area of 15,350 sq. m., determinate thing, is fulfilled as long as, at the time the contract is
more or less. Sometime in 1952, the University of the Philippines entered into, the object of the sale is capable of being made
enclosed the site donated with a wire fence. Pio Sian Melliza determinate without the necessity of a new or further agreement
thereupon made representations, thru his lawyer, with the city between the parties (Art. 1273, old Civil Code; Art. 1460, New
authorities for payment of the value of the lot (Lot 1214-B). No Civil Code). The specific mention of some of the lots plus the
recovery was obtained, because as alleged by Pio Sian Melliza, the statement that the lots object of the sale are the ones needed for
City did not have funds. The University of the Philippines, city hall site; avenues and parks, according to the Arellano plan,
meanwhile, obtained Transfer Certificate of Title No. 7152 sufficiently provides a basis, as of the time of the execution of the
covering the three lots, Nos. 1214-B,1214-C and 1214-D.On 10 contract, for rendering determinate said lots without the need of
December 1955 Pio Sian Melizza filed an action in the CFI Iloilo a new and further agreement of the parties.
against Iloilo City and the University of the Philippines for
recovery of Lot 1214-B or of its value. After stipulation of facts The Supreme Court affirmed the decision appealed from insofar
and trial, the CFI rendered its decision on 15 August 1957, as it affirms that of the CFI, and dismissed the complaint; without
dismissing the complaint. Said court ruled that the instrument costs
executed by Juliana Melliza in favor of Iloilo municipality included
in the conveyance Lot 1214-B, and thus it held that Iloilo City had
the right to donate Lot 1214-B to UP. Pio Sian Melliza appealed to FRANCISCO M. ALONSO vs. CEBU COUNTRY CLUB, INC. G.R. No.
the Court of Appeals. On 19 May 1965, the CA affirmed the 130876 January 31, 2002
interpretation of the CFI that the portion of Lot 1214 sold by
Juliana Melliza was not limited to the 10,788 square meters
G.R. No. 130876 January 31, 2002
specifically mentioned but included whatever was needed for the
FRANCISCO M. ALONSO, substituted by his heirs, petitioners,
construction of avenues, parks and the city hall site. Nonetheless,
vs.
it ordered the remand of the case for reception of evidence to
CEBU COUNTRY CLUB, INC., respondent.
determine the area actually taken by Iloilo City for the PARDO, J.:
construction of avenues, parks and for city hall site. Hence, the
appeal by Pio San Melliza to the Supreme Court. FACTS: The case is an appeal via certiorari from a decision of the
Court of Appeals affirming in toto that of the Regional Trial Court,
One of his causes of action was that the contract of sale executed
Branch 8, Cebu City, declaring that the title to the contested Lot
between Melliza and the Mun. referred only to lots 1214-C and
No. 727, Banilad Friar Lands Estate, Cebu City, was validly re-
1214-D and it is unwarranted to include lot 1214-B as being
constituted in the name of the Cebu Country Club, Inc. and
included under the description therein because that would mean
ordering petitioners to pay attorneys fees of P400,000.00, and
that the object of the contract of sale would be indeterminate.
litigation expenses of P51,000.00, and costs.
One of the essential requirements for a contract of sale is that it
should have for its object a determinate thing. Petitioner Francisco M. Alonso, who died pendente lite and
substituted by his legal heirs, a lawyer by profession, the only son
HELD: The paramount intention of the parties was to provide
and sole heir of the late Tomas N. Alonso and Asuncion Medalle,
Iloilo municipality with lots sufficient or adequate in area for the
who died on June 16, 1962 and August 18, 1963, respectively.
construction of the Iloilo City hall site, with its avenues and parks.
Cebu Country Club, Inc. is a non-stock, non-profit corporation
For this matter, a previous donation for this purpose between the
duly organized and existing under Philippine Laws the purpose of
same parties was revoked by them, because of inadequacy of the
which is to cater to the recreation and leisure of its members.
area of the lot donated. Said instrument described 4parcels of
land by their lot numbers and area; and then it goes on to further
Sometime in 1992, petitioner discovered documents and records
describe, not only those lots already mentioned, but the lots
Friar Lands Sale Certificate Register/Installment Record
object of the sale, by stating that said lots were the ones needed
Certificate No. 734, Sales Certificate No. 734 and Assignment of
for the construction of the city hall site, avenues and parks Sales Certificate showing that his father acquired Lot No. 727
according to the Arellano plan. If the parties intended merely to of the Banilad Friar Lands Estate from the Government of the
cover the specified lots (Lots 2, 5, 1214-C and 1214-D), there Philippine Islands in or about the year 1911 in accordance with
would scarcely have been any need for the next paragraph, since the Friar Lands Act (Act No. 1120). The documents show that one
these lots were already plainly and very clearly described by their Leoncio Alburo, the original vendee of Lot No. 727, assigned his
respective lot number and areas. Said next paragraph does not sales certificate to petitioners father on December 18, 1911, who
really add to the clear description that was already given to them completed the required installment payments thereon under Act
in the previous one. It is therefore the more reasonable No. 1120 and was consequently issued Patent No. 14353 on
interpretation to view it as describing those other portions of March 24, 1926. On March 27, 1926, the Director of Lands, acting
land contiguous to the lots that, by reference to the Arellano plan, for and in behalf of the government, executed a final deed of sale
in favor of petitioners father Tomas N. Alonso. It appears,
however, that the deed was not registered with the Register of reconstitution of Lot No. 727 in 1948 from the owners duplicate,
Deeds because of lack of technical requirements, among them the the original of TCT No. 11351 having been lost or destroyed
approval of the deed of sale by the Secretary of Agriculture and during the war, pursuant to Republic Act No. 26, its implementing
Natural Resources, as required by law. Circular, GLRO Circular No. 178 and Circular No. 6 of the General
Land Registration Office; that unlike Cebu Country Club, Inc.,
Upon investigation of the status of the land, petitioner found out petitioners father never had any registered title under the Land
from the office of the Registrar of Deeds of Cebu City that title to Registration Act No. 496 nor did he pay the necessary taxes on
Lot No. 727 of the Banilad Friar Lands Estate had been Lot No. 727 during his lifetime; that petitioners father knew that
"administratively reconstituted from the owners duplicate" on the United Service Country Club, Inc., predecessor of Cebu
July 26, 1948 under Transfer Certificate of Title (TCT) No. RT- Country Club, Inc. was occupying Lot No. 727 as owner; that
1310 (T-11351) in the name of United Service Country Club, Inc., petitioners father never reconstituted his alleged title to Lot No.
predecessor of Cebu Country Club, Inc. On March 8, 1960, upon 727 but did so over Lot No. 810 of the Banilad Friar Lands Estate,
order of the Court of First Instance, the name of the registered a lot adjacent to the disputed property, in 1946; that petitioner
owner in TCT No. RT-1310 (T-11531) was changed to Cebu himself lived in Cebu City, a few kilometers away from the land in
Country Club, Inc. Moreover, the TCT provides that the litigation; that petitioners father or petitioner himself, both of
reconstituted title was a transfer from TCT No. 1021. whom are lawyers and the former a congressman as well, for
more than sixty (60) years, never made any demand on Cebu
In the firm belief that petitioners father is still the rightful owner Country Club, Inc. for the recovery of the property knowing fully
of Lot No. 727 of the Banilad Friar Lands Estate since there are no well that said land was owned and utilized by Cebu Country Club,
records showing that he ever sold or conveyed the disputed Inc. as its main golf course. By way of counterclaim, Cebu Country
property to anyone, on July 7, 1992, petitioner made a formal Club, Inc. prayed for the award of attorneys fees in the amount of
demand upon Cebu Country Club, Inc. to restore to him the P900,000.00 and litigation expenses of P100,000.00, moral
ownership and possession of said lot within fifteen (15) days damages of P500,000.00 and exemplary damages of
from receipt thereof. Cebu Country Club, Inc., however, denied P2,000,000.00.
petitioners claim and refused to deliver possession to him.
Judgment is hereby rendered in favor of the defendant and
Left with no other recourse, on September 25, 1992, petitioner against the plaintiff: declaring the contested property or Lot 727
filed with the Regional Trial Court, Cebu City, a complaint for as legally belonging to the defendant; directing the plaintiff to pay
declaration of nullity and non-existence of deed/title, attorney' fee of P400, 000.00; and litigation expenses of P51,
cancellation of certificates of title and recovery of property 000.00; and finally, with costs against the plaintiff.
against defendant Cebu Country Club, Inc. He alleged that the
Cebu Country Club, Inc. fraudulently and illegally managed to After proceedings on appeal, on March 31, 1997, the Court of
secure in its name the administrative reconstitution of TCT No. Appeals affirmed the lower courts decision.
RT-13 10 (T-11351) despite the absence of any transaction of
specific land dealing that would show how Lot No. 727 had come On April 30, 1997, petitioner filed a motion for reconsideration;
to pass to Cebu Country Club, Inc.; that TCT No. 11351 which is however, on October 2, 1997, the Court of Appeals denied the
the source title of TCT No. RT-1310 (T-11351) does not pertain to motion. Hence, this appeal.
Lot No. 727; that the reconstituted title which was issued on July
26, 1948, did not contain the technical description of the ISSUES:
registered land which was inserted only on March 8, 1960, 1. Whether the Court of Appeals erred in affirming the validity of
twenty-eight (28) years after the issuance of TCT No. RT-1310 (T- TCT No. RT-1310 (T-11351).
11351), hence, Cebu Country Club, Inc.s title is null and void. 2. Whether the Court of Appeals erred in sustaining respondents
Petitioner thus prayed for the cancellation of TCT No. RT-1310 (T- claim of ownership over Lot No. 727;
11351) and the issuance of another title in his name as the sole 3. Whether the Court of Appeals erred in holding that the present
heir of Tomas Alonso, for Cebu Country Club, Inc. to deliver action is barred by prescription and/or by laches;
possession of the property to petitioner, and render an 4. Whether the Court of Appeals erred in not applying the
accounting of the fruits and income of the land. Petitioner doctrine of stare decisis;
likewise prayed for the sum of P100, 000.00 by way of attorneys 5. Whether the Court of Appeals erred in sustaining the trial
fees plus P500.00 per hearing as appearance fee, and P10, 000.00 courts award for damages in the form of attorneys fees and
as reasonable litigation expenses. litigation expenses.

On November 5, 1992, Cebu Country Club, Inc. filed with the trial 1. Reconstitution was based on the owners duplicate of the title,
court its answer with counterclaim. It alleged that petitioner had hence, there was no need for the covering deed of sale or other
no cause of action against Cebu Country Club, Inc. since the same modes of conveyance. Cebu Country Club, Inc. was admittedly in
had prescribed and was barred by laches, Cebu Country Club, Inc. possession of the land since long before the Second World War, or
having been in possession of the land since 1935 until the present since 1931. In fact, the original title (TCT No. 11351) was issued
in the concept of an owner, openly, publicly, peacefully, to the United Service Country Club, Inc. on November 19, 1931 as
exclusively, adversely, continuously, paying regularly the real a transfer from Transfer Certificate of Title No. 1021. More
estate taxes thereon; that Cebu Country Club, Inc. acquired the lot importantly, Cebu Country Club, Inc. paid the realty taxes on the
in good faith and for value; that it caused the administrative land even before the war, and tax declarations covering the
property showed the number of the TCT of the land. Cebu its name with the title number indicated thereon. Tax receipts
Country Club, Inc. produced receipts showing real estate tax and declarations of ownership for taxation purposes are strong
payments since 1949. On the other hand, petitioner failed to evidence of ownership. This Court has ruled that although tax
produce a single receipt of real estate tax payment ever made by declarations or realty tax payments are not conclusive evidence
his father since the sales patent was issued to his father on March of ownership, nevertheless, they are good indicia of possession in
24, 1926. Worse, admittedly petitioner could not show any the concept of owner for no one in his right mind will be paying
torrens title ever issued to Tomas N. Alonso, because, as said, the taxes for a property that is not in his actual or constructive
deed of sale executed on March 27, 1926 by the Director of Lands possession.
was not approved by the Secretary of Agriculture and Natural
Resources and could not be registered. "Under the law, it is the Notwithstanding this fatal defect, the Court of Appeals ruled that
act of registration of the deed of conveyance that serves as the "there was substantial compliance with the requirement of Act
operative act to convey the land registered under the Torrens No. 1120 to validly convey title to said lot to Tomas N. Alonso."
system. The act of registration creates constructive notice to the
whole world of the fact of such conveyance." On this point, On this point, the Court of Appeals erred.
petitioner alleges that Cebu Country Club, Inc. obtained its title by
fraud in connivance with personnel of the Register of Deeds in Under Act No. 1120, which governs the administration and
1941 or in 1948, when the title was administratively disposition of friar lands, the purchase by an actual and bona fide
reconstituted. Imputations of fraud must be proved by clear and settler or occupant of any portion of friar land shall be "agreed
convincing evidence. Petitioner failed to adduce evidence of upon between the purchaser and the Director of Lands, subject to
fraud. In an action for re-conveyance based on fraud, he who the approval of the Secretary of Agriculture and Natural
charges fraud must prove such fraud in obtaining a title. "In this Resources (mutatis mutandis)."
jurisdiction, fraud is never presumed." The strongest suspicion
cannot sway judgment or overcome the presumption of In his Memorandum filed on May 25, 2001, the Solicitor General
regularity. "The sea of suspicion has no shore, and the court that submitted to this Court certified copies of Sale Certificate No. 734,
embarks upon it is without rudder or compass." Worse, the in favor of Leoncio Alburo, and Assignment of Sale Certificate No.
imputation of fraud was so tardily brought, some forty-four (44) 734, in favor of Tomas N. Alonso. Conspicuously, both instruments
years or sixty-one (61) years after its supposed occurrence, that do not bear the signature of the Director of Lands and the
is, from the administrative reconstitution of title on July 26, 1948, Secretary of the Interior. They also do not bear the approval of the
or from the issuance of the original title on November 19, 1931, Secretary of Agriculture and Natural Resources.
that verification is rendered extremely difficult, if not impossible,
especially due to the supervening event of the second world war Only recently, in Jesus P. Liao v. Court of Appeals, the Court has
during which practically all public records were lost or destroyed, ruled categorically that approval by the Secretary of Agriculture
or no longer available. and Commerce of the sale of friar lands is indispensable for its
validity, hence, the absence of such approval made the sale null
Petitioners next question the lack of technical description and void ab-initio. Necessarily, there can be no valid titles issued
inscribed in the reconstituted title in Cebu Country Club, Inc.s on the basis of such sale or assignment. Consequently, petitioner
name. This is not a bar to reconstitution of the title nor will it Franciscos father did not have any registerable title to the land in
affect the validity of the reconstituted title. A registered owner is question. Having none, he could not transmit anything to his sole
given two (2) years to file a plan of such land with the Chief of the heir, petitioner Francisco Alonso or the latters heirs.
General Land Registration Office. The two-year period is
directory, not jurisdictional. In other words, the failure to submit Consequently, we rule that neither Tomas N. Alonso nor his son
the technical description within two (2) years would not Francisco M. Alonso or the latters heirs are the lawful owners of
invalidate the title. At most, the failure to file such technical Lot No. 727 in dispute. Neither has the respondent Cebu Country
description within the two-year period would bar a transfer of Club, Inc. been able to establish a clear title over the contested
the title to a third party in a voluntary transaction. estate. The reconstitution of a title is simply the re-issuance of a
lost duplicate certificate of title in its original form and condition.
2. Admittedly, neither petitioners nor their predecessor had any It does not determine or resolve the ownership of the land
title to the land in question. The most that petitioners could claim covered by the lost or destroyed title. A reconstituted title, like
was that the Director of Lands issued a sales patent in the name the original certificate of title, by itself does not vest ownership of
of Tomas N. Alonso. The sales patent, however, and even the the land or estate covered thereby.
corresponding deed of sale were not registered with the Register
of Deeds and no title was ever issued in the name of the latter. 3. An action for re-conveyance is a legal remedy granted to a
This is because there were basic requirements not complied with, landowner whose property has been wrongfully or erroneously
the most important of which was that the deed of sale executed registered in anothers name, but then the action must be filed
by the Director of Lands was not approved by the Secretary of within ten years from the issuance of the title since such issuance
Agriculture and Natural Resources. Hence, the deed of sale was operates as a constructive notice." In addition, the action is
void. "Approval by the Secretary of Agriculture and Commerce is barred by laches because of the long delay before the filing of the
indispensable for the validity of the sale." Moreover, Cebu Country case. Petitioner Franciscos action in the court below was
Club, Inc. was in possession of the land since 1931, and had been basically one of re-conveyance. It was filed on September 25,
paying the real estate taxes thereon based on tax declarations in 1992, sixty-one (61) years after the title was issued on November
19, 1931, and forty-four (44) years after its reconstitution on July year 1929, and upon delivery of the same to Arco and the
26, 1948. presentation of necessary papers, the price of $1,700, plus the
10% commission agreed upon the plus all the expenses and
4. Petitioners assert that as the Court of Appeals annulled Cebu charges, was duly paid by the Arco to Puyat. He following year,
Country Club, Inc.s title in the Cabrera-Ingles case, so too must another order for sound reproducing equipment was placed by
the title in this case be declared void. In the first place, there is no Arco with Puyat, on the same terms as the first order. The
identity of parties; secondly, neither the titles to nor the parcels equipment under the second order arrived in due time, and the
of land involved are the same. Consequently, the doctrine of res- defendant was duly paid the price of $1,600 with its10 per cent
judicata does not apply. Momentarily casting aside the doctrine of commission, and $160, for all expenses and charges. This amount
res-judicata, there is an important moiety in the Cabrera-Ingles of $160 does not represent actual out-of-pocket expenses paid by
case. There, the Director of Lands, after the administrative Puyat, but a mere flat charge and rough estimate made by Puyat
reconstitution of the title, issued a directive to the Register of equivalent to 10% of the price of $1,600 of the equipment.
Deeds to register the lot in question in favor of Graciano Ingles.
This superseded the administrative reconstitution, rendering Three years later, in connection with a civil case in Vigan, filed by
allegations of fraud irrelevant. Here, the Director of Lands did not one Fidel Reyes against Puyat, the officials of the Arco discovered
issue a directive to register the land in favor of Tomas N. Alonso. that the price quoted to them by Puyat with regard to their two
And worse, the sales patent and corresponding deed of sale orders was not the net price but rather the list price, and that the
executed in 1926 are now stale. defendant had obtained a discount from the Starr Piano Company.
Moreover, by reading reviews and literature on prices of
5. An award of attorneys fees and expenses of litigation is proper machinery and cinematograph equipment, said officials of Arco
under the circumstances provided for in Article 2208 of the Civil were convinced that the prices charged them by the defendant
Code, one of which is when the court deems it just and equitable were much too high including the charges for out-of-pocket
that attorneys fees and expenses of litigation should be expenses. For these reasons, they sought to obtain a reduction
recovered and when the civil action or proceeding is clearly from Puyat or rather a reimbursement. Failing in this they
unfounded and where defendant acted in gross and evident bad brought an action with the CFI Manila.
faith.
The trial court held that the contract between the parties was one
WHEREFORE, we DENY the petition for review. However, we SET of the outright purchase and sale, and absolved Puyat from the
ASIDE the decision of the Court of Appeals and that of the complaint. The appellate court, however, held that the relation
Regional Trial Court, Cebu City, Branch 08. IN LIEU THEREOF, we between the parties was that of agent and principal, Puyat acting
DISMISS the complaint and counterclaim of the parties in Civil as agent of Arco in the purchase of the equipment in question,
Case No. CEB 12926 of the trial court. We declare that Lot No. 727 and sentenced Puyat to pay Arco alleged over payments in the
D-2 of the Banilad Friar Lands Estate covered by Original total sum of $1,335.52 or P2,671.04, together with legal interest
Certificate of Title Nos. 251, 232, and 253 legally belongs to the thereon from the date of the filing of the complaint until said
Government of the Philippines. amount is fully paid, as well as to pay the costs of the suit in both
instances.

Hence, the petition for the issuance of a writ of certiorari to the


PUYAT and SONS vs ARCO AMUSEMENT COMP. (72 Phil 402) Court of Appeals for the purposed of reviewing its decision in
civil case GR 1023.
In the year 1929, the Teatro Arco, was engaged in the business of
operating cinematographs. In 1930, its name was changed to Arco Issue: Whether the contract between petitioner and respondent
Amusement Company. About the same time, Gonzalo Puyat & is that of agency where agent is bound to indemnify the principal
Sons, Inc., in addition to its other business, was acting as exclusive for damages, or a mere contract of sale
agents in the Philippines for the Starr Piano Company of
Richmond, Indiana, USA, which dealt in cinematograph Held: The letters, by which the respondent accepted the prices for
equipment and machinery. Arco, desiring to equip its the sound reproducing equipment subject of its contract with the
cinematograph with sound reproducing devices, approached petitioner, are clear in their terms and admit no other
Puyat. After some negotiations, it was agreed between the interpretation that the respondent in question at the prices
parties, Puyat would, on behalf of Arco Amusement, order sound indicated which are fixed and determinate. The respondent
reproducing equipment from the Star Piano Company and that admitted in its complaint filed with the Court of First Instance of
Arco Amusement would pay Puyat, in addition to the price of the Manila that the petitioner agreed to sell to it the first sound
equipment, 10% commission, plus all expenses, such as, freight, reproducing equipment and machinery.
insurance, banking charges, cables, etc. At the expense of the
We agree with the trial judge that "whatever unforseen events
Arco, Puyat sent a cable to the Starr Piano Company, inquiring
might have taken place unfavorable to the defendant (petitioner),
about the equipment desired and making the said company to
such as change in prices, mistake in their quotation, loss of the
quote its price of $1,700 FOB factory Richmond, Indiana. Puyat
goods not covered by insurance or failure of the Starr Piano
informed the plaintiff of the price of $1,700, and being agreeable
Company to properly fill the orders as per specifications, the
to the price, Arco, in a letter dated 19 November 1929, formally
plaintiff (respondent) might still legally hold the defendant
authorized the order. The equipment arrived about the end of the
(petitioner) to the prices fixed of $1,700 and $1,600." This is However, MRCI alleged that the subject properties could not
incompatible with the pretended relation of agency between the longer be delivered to the Ventanillas because they had already
petitioner and the respondent, because in agency, the agent is been sold to Samuel Marquez (Marquez)
exempted from all liability in the discharge of his commission
provided he acts in accordance with the instructions received The case was elevated to this Court where MRCI argued that the
from his principal (section 254, Code of Commerce), and the sale of the properties to Marquez was valid because at the time of
principal must indemnify the agent for all damages which the the sale, the issue of the validity of the sale to the Ventanillas had
latter may incur in carrying out the agency without fault or not yet been resolved. Further, there was no specific injunction
imprudence on his part (article 1729, Civil Code). against it re-selling the property. As a buyer in good faith,
Marquez had a right to rely on the recitals in the certificate of
While the letters state that the petitioner was to receive ten per title. The subject matter of the controversy having been passed to
cent (10%) commission, this does not necessarily make the an innocent purchaser for value, the execution of the absolute
petitioner an agent of the respondent, as this provision is only an deed of sale in favor of the Ventanillas could not be ordered by
additional price which the respondent bound itself to pay, and the trial court. Yet the court ruled in favor of the Vetanillas. As it
which stipulation is not incompatible with the contract of turned out, the execution of the judgment in favor of the
purchase and sale. Ventanillas was yet far from fruition. Samuel Cleofe, Register of
Deeds for Quezon City (ROD Cleofe) revealed to them, that on
In the second place, to hold the petitioner an agent of the March 11, 1992, MRCI registered a deed of absolute sale to
respondent in the purchase of equipment and machinery from Marquez who eventually sold the same property to the Saberons,
the Starr Piano Company of Richmond, Indiana, is incompatible which conveyance was registered in July 1992. ROD Cleofe opined
with the admitted fact that the petitioner is the exclusive agent of that a judicial order for the cancellation of the titles in the name
the same company in the Philippines. It is out of the ordinary for of the Saberons was essential before he complied with the writ of
one to be the agent of both the vendor and the purchaser. The execution in Civil Case No. 26411. Apparently, the notice of levy,
facts and circumstances indicated do not point to anything but through inadvertence, was not carried over to the title issued to
plain ordinary transaction where the respondent enters into a Marquez, the same being a junior encumbrance which was
contract of purchase and sale with the petitioner, the latter as entered after the contract to sell to Marquez had already been
exclusive agent of the Starr Piano Company in the United States. annotated.

It follows that the petitioner as vendor is not bound to reimburse Once again, the Ventanillas were constrained to go to court to
the respondent as vendee for any difference between the cost seek the annulment of the deed of sale executed between MRCI
price and the sales price which represents the profit realized by and Marquez as well as the deed of sale between Marquez and the
the vendor out of the transaction. This is the very essence of Saberons, as the fruits of void conveyances. RTC ruled in favor of
commerce without which merchants or middleman would not the Ventanillas
exist.
Meanwhile, the Saberons filed a case in the CA relying on one
The Supreme Court granted the writ of certiorari, reversed the central argumentthat they were purchasers in good faith,
decision of the appellate court, and absolved Puyat & Sons from having relied on the correctness of the certificates of title
the complaint in GR 1023, without pronouncement regarding covering the lots in question; and therefore, holders of a valid and
costs. indefeasible title. CA ruled in favor of the Ventanillas. The
Saberons filed the present petition.

Unknown to the Saberons, the former owner of the properties


SABERON vs. VENTANILLA, JR., and had entered into contracts to sell with the Ventanillas, way back
in 1970. It was only upon receipt of the summons in the case filed
by the Ventanillas with the RTC that they learned of the present
Facts: controversy.

On March 3, 1970, Manila Remnant Co., Inc. (MRCI) and A.U. With the RTC and the CA rulings against their title over the
Valencia & Co. Inc. (AUVC) executed two (2) contracts to sell in properties, the Saberons now come to the Court with their
favor of Oscar C. Ventanilla, Jr. and Carmen Gloria D. Ventanilla vehement insistence that they were purchasers in good faith and
(Ventanillas). MRCI resold the same property to Carlos for value. Before purchasing the lots, they exercised due diligence
Crisostomo (Crisostomo). and found no encumbrance or annotations on the titles. At the
same time, the Ventanillas also failed to rebut the presumption of
Aggrieved, the Ventanillas commenced an action for specific their good faith as there was no showing that they confederated
performance, annulment of deeds and damages against MRCI, with MRCI and its officers to deprive the Ventanillas of their right
AUVC, and Crisostomo with the Court of First Instance. The CFI over the subject properties.
Quezon City rendered a decision in favor of the Ventanillas. The
CA sustained the CFI Quezon Citys decision in toto. The According to the Saberons, the CA likewise erred in ruling that
Ventanillas moved for the issuance of a writ of execution. The writ there was no constructive notice of the levy made upon the
was issued and served upon MRCI. subject lands.
Issue: Facts: Plaintiff alleged that the defendant Vitaliano Mamawal,
deputy sheriff of the Province of Tarlac, , attached and sold to the
Whether or not there was constructive notice of levy as an defendant Emiliano J. Valdez the sugar cane planted by the
encumbrance prior to the sale to the Saberons. plaintiff and his tenants on parcels of land.
Within one year from the date of the attachment and sale the
Ruling: plaintiff offered to redeem said sugar cane and tendered to the
defendant Valdez the amount sufficient to cover the price paid by
the latter, the interest thereon and any assessments or taxes
The Court is beckoned to rule on two conflicting rights over the
which he may have paid thereon after the purchase, and the
subject properties: the right of the Ventanillas to acquire the title interest corresponding thereto and that Valdez refused to accept
to the registered land from the moment of inscription of the the money and to return the sugar cane to the plaintiff.
notice of levy on the day book (or entry book), on one hand; and Plaintiff alleged that the defendant Emiliano J. Valdez was
the right of the Saberons to rely on what appears on the attempting to harvest the palay planted in four of the seven
certificate of title for purposes of voluntary dealings with the parcels of land and that he had harvested and taken possession of
same parcel of land, on the other. the palay in one of said seven parcels and in another parcel and
that all of said palay belonged to the plaintiff.
The Saberons could not be said to have authored the Plaintiff prayed that a writ of preliminary injunction be issued
against the defendant Emiliano J. Valdez his attorneys and agents,
entanglement they found themselves in. No fault can be
restraining them (1) from distributing him in the possession of
attributed to them for relying on the face of the title presented by the parcels of land described in the complaint; (2) from taking
Marquez. In ultimately ruling for the Ventanillas, the courts a quo possession of, or harvesting the sugar cane in question; and (3)
focused on the superiority of their notice of levy and the from taking possession, or harvesting the palay in said parcels of
constructive notice against the whole world which it had land.
produced and which effectively bound third persons including the Plaintiff also prayed that a judgment be rendered in his favor and
against the defendants ordering them to consent to the
Saberons.
redemption of the sugar cane in question, and that the defendant
Valdez be condemned to pay to the plaintiff the sum of P1,056 the
This complex situation could have been avoided if it were not for
value of palay harvested by him in the two parcels of land, with
the failure of ROD Cleofe to carry over the notice of levy to interest and costs.
Marquezs title, serving as a senior encumbrance that might have The trial court rendered a judgment against the plaintiff and in
dissuaded the Saberons from purchasing the properties. favor of the defendants. It appeared that the eight parcels of land
belonging to Sibal were attached and Macondray Co., Inc. bought
It is undeniable, therefore, that no title was transferred to the eight parcels of land. Within 1 year from the sale, Sibal paid
Marquez upon the annotation of the contract to sell on MRCIs Macondray Co., Inc. for the account of the redemption price.
title. As correctly found by the trial court, the contract to sell The deputy sheriff attached the personal property of Sibal, which
included the sugar cane now in question in the seven parcels of
cannot be substituted by the Deed of Absolute Sale as a "mere
land. Said personal properties were sold to Valdez in a public
conclusion" of the previous contract since the owners of the auction. Real property of Sibal was also attached, consisting of 11
properties under the two instruments are different. Considering parcels of land, 8 of which were bought by Valdez in an auction
that the deed of sale in favor of Marquez was of later registration, held by the sheriff. The remaining 3 parcels were released by
the notice of levy should have been carried over to the title as a virtue of claims of Cuyugan and Tizon.
senior encumbrance. On that same date, Macondray sold all of its rights to Valdez in the
eight parcels of land acquired, for the unpaid balance of the
The fact that the notice of levy on attachment was not annotated redemption price of said eight parcels of land. Valdez became the
absolute owner of the land.
on the original title on file in the Registry of Deeds, which
resulted in its non-annotation on the title TCT No. PT-94912, Issue: Whether or not pending crops which have potential
should not prejudice petitioner. As long as the requisites required existence may be the valid subject matter of a sale.
by law in order to effect attachment are complied with and the
appropriate fees duly paid, attachment is duly perfected. The Held: Yes, it can be a valid subject matter of a sale.
attachment already binds the land. This is because what remains From an examination of the reports and codes of the State of
to be done lies not within the petitioners power to perform but is California and other states we find that the settle doctrine
followed in said states in connection with the attachment of
a duty incumbent solely on the Register of Deeds.
property and execution of judgment is, that growing crops raised
by yearly labor and cultivation are considered personal property.
In the case at bench, the notice of levy covering the subject Mr. Floyd R. Mechem (He is the author of A Treatise on the Law of
property was annotated in the entry book of the ROD QC prior to Sale of Personal Property) says that a valid sale may be made of a
the issuance of a TCT in the name of the Saberons. Clearly, the thing, which though not yet actually in existence, is reasonably
Ventanillas levy was placed on record prior to the sale. This certain to come into existence as the natural increment or usual
shows the superiority and preference in rights of the Ventanillas incident of something already in existence, and then belonging to
over the property as against the Saberons. the vendor, and then title will vest in the buyer the moment the
thing comes into existence. Things of this nature are said to have
a potential existence.
A man may sell property of which he is potentially and not
actually possessed. He may make a valid sale of the wine that a
Sibal vs. Valdez (G.R. No. L-26278, August 4, 1927)
vineyard is expected to produce; or the gain a field may grow in a
given time; or the milk a cow may yield during the coming year;
or the wool that shall thereafter grow upon sheep; or what may
be taken at the next cast of a fishermans net; or fruits to grow; or
young animals not yet in existence; or the good will of a trade and
the like. The thing sold, however, must be specific and identified.
They must be also owned at the time by the vendor. (Hull vs. Hull,
48 Conn., 250 [40 Am. Rep., 165].)
The Supreme Court held that pending crops which have potential
existence may be the valid subject matter of sale and may be dealt
with separately from the land on which they grow. Judgment
appealed from AFFIRMED.