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Dizon v.



Overland Express Lines, Inc. (Overland) entered into a Contract of Lease with Option to Buy with the Dizons
involving a parcel of land situated in Quezon City. The term of the lease was for 1 year. During this period, Overland
Express Lines, Inc. was granted an option to purchase for the amount of P3,000 per square meter and thereafter, the
lease shall be on a per month basis with a monthly rental of P3,000.

For failure of Overland Express Lines, Inc. to pay the increased rentals of P8,000 per month, Dizons filed an action
for ejectment in MTC. MTC rendered a judgment ordering Overland Express Lines, Inc. to vacate the leased
premises and pay the sum of P624, 000.00 representing rentals in arrears and/or damages in the form of reasonable
compensation because of this Overland filed a petition for certiorari praying for the issuance of a restraining order
enjoining the enforcement of said judgment and dismissal of the case for alleged lack of jurisdiction. The motion for
reconsideration was denied.

Overland then filed before RTC an action for specific performance and fixing of period for obligation with prayer for
issuance of restraining order seeking to compel the execution of a deed of sale pursuant to the option to purchase
and receipt of partial payment however, action was denied on the ground that the decision on ejectment has been
final and executory. On appeal, Court of Appeals rendered a decision upholding the jurisdiction of MTC Quezon City
in the ejectment case concluding that there was perfected contract of sale between parties on the leased premises
and that pursuant to the option to buy agreement; Overland had acquired the rights of a vendee in a contract of sale.
It opined that the payment of Overland of P300, 000.00 as partial payment for the leased payment which was
allegedly accepted by an Alice Dizon in representation of the petitioners and for which an official receipt was issued.
CA went further by stating that in fact, what was entered into was a conditional contract of sale wherein ownership
over the leased property shall not pass unto Overland until it has fully paid the purchase price.

Petitioners filed a motion for reconsideration in CA but was denied hence, they elevated the case via petition for
certiorari questioning the authority of Alice Dizon in allegedly receiving the partial payment made by Overland.

Hence this petition.

ISSUE: Whether or not Overland Express Lines, Inc. actually paid the alleged P300,000 to Alice Dizon as
representative of petitioners in consideration of the option


No, there was no perfected contract of sale between Dizons and Overland Express Lines, Inc. Under Article 1475 of
the New Civil Code, the contract of sale is perfected at the moment there is a meeting of minds upon the thing which
is the object of the contract and upon the price. From that moment, parties may reciprocally demand performance,
subject to the provisions of law governing the form of contracts. Thus, the elements of a contract of sale are consent,
object, and price in money or its equivalent. It bears stressing that the absence of any of these essential elements
negates the existence of a perfected contract of sale. Sale is a consensual contract and he who alleges it must show
its existence by competent proof.

In an attempt to resurrect the lapsed option, private respondent gave P300,000 to petitioners thru Alice Dizon on the
erroneous presumption that the said amount tendered would constitute a perfected contract of sale pursuant to the
contract of lease with option to buy. There was no valid consent by the petitioners on the supposed sale entered into
by Alice Dizon as petitioners alleged agent, and private respondent. The basis for agency is representation and a
person dealing with an agent is put upon inquiry and must discover upon his peril the authority of agent. As provided
in Article 1868 of New Civil Code, there was no showing that petitioners neither consented to the act of Alice Dizon
nor authorized her act on their behalf with regard to her transaction with private respondent. The most prudent thing
private respondent should have done was to ascertain extent of authority of Alice Dizon. Being negligent in this
regard, private respondent cannot seek relief on the basis of supposed agency.

Fule v. CA


Fule, a banker by profession and a jeweler at the same time, acquired a 10-hectare property in Tanay, Rizal. Then,
as a corporate secretary of the bank, Fule asked Remelia Dichoso and Olivia Mendoza to look for a buyer which
might be interested in the Tanay property. Dichoso and Mendoza found Dr. Ninevetch Cruz which so happened that
Fule showed interest in buying a pair of emerald-cut diamond earrings owned by Dr. Cruz which he had seen months
before when his mother examined and appraised them as genuine. Dr. Cruz however declined Fules offer to buy the
jewelry for P100,000. Therefore, Fule made another bid to buy them for $6000. At this point, Fule inspected the
jewelry at the lobby of Prudential Bank branch in San Pablo City and made a sketch thereof and returned it after
considering Dr. Cruz refused again the offer to buy.

Subsequently, however, negotiations for the barter of jewelry and the Tanay property ensued. After, Dr. Cruz
requested Atty. Belarmino to check the propertys impediments which there was and because of this Fule executed a
Deed of redemption to cut through the impediments. The following day, Fule arrived at the residence of Atty.
Belarmino for the deed of sale of the property to be executed in exchange for the emerald-cut diamond earrings. As
pre-arranged, Fule left Atty. Belarminos residence and headed for the bank to retrieve the emerald-cut diamond
earrings kept in the safety deposit box. Fule then retrieved the plastic bag contained therein the diamond earrings
upon being assisted by the cashier. Fule went near the electric light at the banks lobby, held the jewelry against the
light and examined it for 10 to 15 minutes. After a while, Dr. Cruz asked, Okay na ba iyan? which Fule expressed
his satisfaction by nodding his head.

Later, on the evening of the same day, Fule arrived at the residence of Atty. Belarmino complaining that the jewelry
given to him was fake. He then used a tester to prove the alleged fakery.

Fule then filed a complaint in RTC against Dr. Cruz praying that the contract of sale over Tanay property be declared
null and void on the ground of fraud and deceit. RTC issued a temporary restraining order directing Register of
Deeds to refrain from acting on the documents involved in the transaction. RTC rendered a decision stating that there
was valid contract of sale and further ruled that all elements of a valid contract under Article 1458 of the Civil Code
were present.

Fule elevated the case to Court of appeals. Court of Appeals however affirmed the decision of RTC in toto. His
motion for reconsideration being denied, hence the filing of the present petition.
ISSUE: Whether or not Court of Appeals erred in ruling the validity of the contract of sale


No, CA did not err in upholding the validity of the contract of sale.

Civil Code provides that contracts are perfected by mere consent. From this moment, parties are bound not only to
the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature,
may be in keeping with good faith, usage and law. A contract of sale is perfected at the moment there is a meeting of
the minds upon the thing which is the object of the contract and upon the price. Being consensual, a contract of sale
has the force of law between contracting parties and they are expected to abide in good faith by their respective
contractual commitments.

It is evident from the facts of the case that there was meeting of the minds between Fule and Dr. Cruz. As such, they
are bound by the contract unless there are reasons or circumstances that warrant the nullification. Both the trial and
appellate courts correctly ruled that there was no legal basis for the nullification of contract of sale as allegations of
fraud are unfounded. Ownership over the parcel of land and pair of emerald-cut diamond earrings has been
transferred to Dr. Cruz and Fule respectively upon the actual and constructive delivery. Said contract of sale being
absolute in nature, title passed to the vendee upon delivery of the thing sold since there was no stipulation in the
contract that title to the property sold has been reserved in the seller until full payment of the price or that the vendor
has the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period. Such
stipulations are not manifest in the contract of sale.

Cruz v. Fernando

Spouses Fernando filed before RTC a complaint for accion publiciana against Spouses Cruz who are occupants of
the front portion of a 710-square meter property in Bulacan to vacate the said premises and pay the amount of P500
a month as reasonable rental for the use thereof.

Spouses Fernando alleged that they are the owners of the property having bought the same from Spouses Glorioso
per deed of sale and prior to their acquisition of the said property, the Gloriosos initially offered to sell the rear portion
of the property to Spouses Cruz but the transaction did not materialize due to Spouses Cruzs failure to exercise their
option which offer to sell was embodied in a Kasunduan and because of the failure to buy the allotted portion,
Spouses Fernando bought the whole property instead from the Gloriosos and even if the Spouses Fernando already
acquired the property, Spouses Cruz refused to vacate the property despite demands.
In response, Spouses Cruz filed a motion to dismiss but RTC dismissed the motion. Spouses then filed their answer
stating that the Kasunduan was a perfected contract of sale and that the agreement has already been partially
consummated as they already relocated their house from the rear portion of the lot the front portion that was sold to
them; that it was Mrs. Glorioso who prevented the complete consummation of the sale and that Spouses Fernando
are allegedly buyers in bad faith having bought the portion of the lot occupied by them with full knowledge of prior
sale of the property to them by the Gloriosos.

RTC rendered a decision in favor of the Fernandos. Spouses Cruz appealed the decision but was affirmed by CA.
Hence, present petition.


Whether CA committed an error of law holding that the Agreement between the parties was a mere offer to sell and
not a perfected Contract of Purchase and Sale


The Kasunduan is a mere offer to sell.

Article 1458 of the Civil Code, a contract of sale is a contract by which one of the contracting prties obligates himself
to transfer the ownership and to deliver a determinate thing, and the other, to pay therefor a price certain in money or
its equivalent.

Moreover, Article 1475 of the Code further provides that the contract of sale is perfected at the moment there is a
meeting of the minds upon the thing which is the object of the contract and upon the price.

In a contract of sale, the title to the property passes to the vendee upon the delivery of the thing sold, as
distinguished from a contract to sell where ownership is reserved in the vendor and is not to pass to the vendee until
the payment of the purchase price.

In the given case, the Kasunduan provides, among others, that the Gloriosos agreed to sell petitioners a portion of
the property and the right of way thereof. However, no agreement to the manner of payment of purchase price was
stated. Hence, the Kasunduan is a mere offer to sell and not a contract of sale since the manner of payment of
purchase price is an essential element of a contract of sale.

Therefore, the Kasunduan is a contract to sell.

Melizza v. City of Iloilo


Juliana Melliza during her lifetime owned, among other properties, 3 parcels of residential land in Iloilo City (OCT
3462). Said parcels of land were known as Lots Nos. 2, 5 and 1214. The total area of Lot 1214 was 29,073 sq. m. On
27 November 1931 she donated to the then Municipality of Iloilo, 9,000 sq. m. of Lot 1214, to serve as site for the
municipal hall. The donation was however revoked by the parties for the reason that the area donated was found
inadequate to meet the requirements of the development plan of the municipality, the so- called Arellano Plan.
Subsequently, Lot 1214 was divided by Certeza Surveying Co., Inc. into Lots 1214-A and 1214-B. And still later, Lot
1214-B was further divided into Lots 1214-B-1, Lot 1214-B-2 and Lot 1214-B-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. m., was designated as
Lot 1214-C; and Lot 1214-B-3, with 4,135 sq. m., became Lot 1214-D. On 15 November 1932, Juliana Melliza
executed an instrument without any caption providing for the absolute sale involving all of lot 5, 7669 sq. m. of Lot 2
(sublots 2-B and 2-C), and a portion of 10,788 sq. m. of Lot 1214 (sublots 1214-B2 and 1214-B3) in favor of the
Municipal Government of Iloilo for the sum of P6,422; these lots and portions being the ones needed by the municipal
government for the construction of avenues, parks and City hall site according the Arellano plan.

On 14 January 1938, Melliza sold her remaining interest in Lot 1214 to Remedios Sian Villanueva (thereafter TCT
18178). Remedios in turn on 4 November 1946 transferred her rights to said portion of land to Pio Sian Melliza
(thereafter TCT 2492). Annotated at the back of Pio Sian Mellizas title certificate was the following that a portion of
10,788 sq. m. of Lot 1214 now designated as Lots 1412-B-2 and 1214-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
succeeded to the Municipality of Iloilo, donated the city hall site together with the building thereon, to the University of
the Philippines (Iloilo branch). The site donated consisted of Lots 1214-B, 1214-C and 1214-D, with a total area of
15,350 sq. m., more or less. Sometime in 1952, the University of the Philippines enclosed the site donated with a
wire fence. Pio Sian Melliza thereupon made representations, thru his lawyer, with the city authorities for payment of
the value of the lot (Lot 1214-B). No recovery was obtained, because as alleged by Pio Sian Melliza, the City did not
have funds. The University of the Philippines, meanwhile, obtained Transfer Certificate of Title No. 7152 covering the
three lots, Nos. 1214-B, 1214-C and 1214-D.

On 10 December 1955 Pio Sian Melizza filed an action in the CFI Iloilo against Iloilo City and the University of the
Philippines for recovery of Lot 1214-B or of its value. After stipulation of facts and trial, the CFI rendered its decision
on 15 August 1957, dismissing the complaint. Said court ruled that the instrument 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 the Court of Appeals. On 19 May 1965, the CA affirmed the
interpretation of the CFI that the portion of Lot 1214 sold by Juliana Melliza was not limited to the 10,788 square
meters specifically mentioned but included whatever was needed for the construction of avenues, parks and the city
hall site. Nonetheless, it ordered the remand of the case for reception of evidence to determine the area actually
taken by Iloilo City for the construction of avenues, parks and for city hall site. Hence, the appeal by Pio San Melliza
to the Supreme Court.

The Supreme Court affirmed the decision appealed from insofar as it affirms that of the CFI, and dismissed the
complaint; without costs.

Held: Requirement, that sale must have a determinate thing as object, is fulfilled if object of sale is capable
of being made determinate at the time of the contract

The requirement of the law that a sale must have for its object a determinate thing, is fulfilled as long as, at the time
the contract is entered into, the object of the sale is capable of being made determinate without the necessity of a
new or further agreement between the parties (Art. 1273, old Civil Code; Art. 1460, New Civil Code). The specific
mention of some of the lots plus the statement that the lots object of the sale are the ones needed for city hall site;
avenues and parks, according to the Arellano plan, sufficiently provides a basis, as of the time of the execution of the
contract, for rendering determinate said lots without the need of a new and further agreement of the parties.
Recio v. Heirs of Spouses Altamirano

Recio leased from the Altamiranos a parcel of land with improvements situated at Lipa City, Batangas. Recio used
the ground floor of the property as retail store for grains and the upper floor as familys residence. Recio claimed that
in 1988, Altamiranos offered to sell the subject property to Nena for P500, 000. Recio accepted the offer which
prompted Altamiranos to waive the rentals for the property. However, sale did not materialize at that time due to the
fault of the Altamiranos. Nonetheless, Nena continued to occupy and use the property with consent of the

In the latter part of 1994, Reman (son of Nena Recio) renewed Nenas option to buy the property. Reman conducted
a series of negotiations with Alejandro who introduced himself as representing other heirs. After the negotiations,
Altamiranos through Alejandro entered into an oral contract of sale with Reman over the property. In view of the oral
contract of sale, Reman made partial payments which Alejandro allegedly received and acknowledged the partial
payments as shown in a receipt. Reman made another payment again which was again duly received by Alejandro
also through a receipt. Subsequently, Reman offered in many instanced to pay the remaining balance of the agreed
purchase price of the subject property but Alejandro kept on avoiding Reman. Because of this Reman demanded
from the Altamiranos, through Alejandro, the execution of deed of sale in exchange for full payment of agreed price.

Reman then filed a complaint for Specific performance and damages. Pending the return of summons to Altamiranos,
he discovered that the property in question has been sold subsequently to Lajarca spouses and the original
certificate of tile was cancelled and a new one was issued by virtue of a deed of sale. Thus, Reman filed an amended
complaint impleading the Lajarca spouses.

The RTC ruled that the Absolute Sale between Altamiranos and the Lajarcas was Null and Void, but the
Court of Appeals modified that the sale between Alejandro and Recio is valid only with respect to the
aliquot share of Alejandro. CA held that Alejandros sale of Not. No. 3 did not bind his co-owners
because a sale of real property by one purporting to be an agent of the owner without any written
authority from the latter is null and void. An SPA from co-owners pursuant to Art 1878 of the NCC is

ISSUE: Whether or not CA erred in modifying the decision of RTC


No, CA did not err in modifying decision of RTC.

A valid contract of sale requires: (a) a meeting of minds of the parties to transfer ownership of the thing
sold in exchange for a price; (b) the subject matter, which must be a possible thing; and (c) the price
certain in money or its equivalent.

In the instant case, all these elements are present. The records disclose that the Altamiranos were the
ones who offered to sell the property to Nena but the transaction did not push through due to the fault
of the respondents. Thereafter, the petitioner renewed Nenas option to purchase the property to which
Alejandro, as the representative of the Altamiranos verbally agreed. The determinate subject matter is
Lot No. 3, which is covered under TCT No. T-102563 and located at No. 39 10 de Julio Street (now
Esteban Mayo Street), Lipa City, Batangas.23 The price agreed for the sale of the property was Five
Hundred Thousand Pesos (P500,000.00).24 It cannot be denied that the oral contract of sale entered into
between the petitioner and Alejandro was valid.

However, CA found that it was only Alejandro who agreed to the sale. There is no evidence to show that
other co-owners consented to Alejandros sale transaction with Reman. Hence, for want of authority to
sell Lot 3, CA ruled that Alejandro only sold his aliquot share of the property to Reman.

Articles 1478 and 1878 of the Civil Code explicitly provides:

Article 1874, CC: When sale of a piece of land or any interest therein is through an agent, authority of
the latter shall be in writing, otherwise, sale shall be void.

Article 1878, CC: Special powers of attorney are necessary in following cases:

(5) To enter into any contract by which ownership of an immovable is transmitted or acquired or
for a valuable consideration

Given the expressed requirement under Articles 1874 and 1878 of the Civil Code that there must be
written authority to sell an immovable property, Remans argument must fail. Moreover Alejandro did
not have an SPA.

Hence, only Alejandros aliquot share shall be awarded to Reman.