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Factors to consider - Babasanta eventually paid total Php200K, and demanded thru letter execution of deed
KEY: Guarantor of loan for start-up corporation of absolute sale for him to make full payment
FACTS o Spouses Lu refused
1. Esteban Piczon-defendant - Babasanta eventually learned that lots already sold to SLDC
a. president of to-be-incorporated company, Sosing-Lobos & Co., Inc. - SLDC already:
b. obtained a loan from Consuelo Piczon-petitioner o in possession of lot (occupied)
i. as guarantor to Sosing; o holds a deed of absolute sale executed in its favour
ii. PHp12,500 loan to be paid upon registration of Sosing in SEC o though not yet registered in ROD
(August 6, 1964); - RTC: Babasanta filed specific performance: execute sale in his favour
iii. with 12% interest; to commence from date of execution of agreement o Ruling: favour of SLDC
(September 28, 1956) o Ordered: Title be annotated lis pendens
ISSUE - THEN SLDC registered the sale in ROD
WON interest should run from August 1964 (date payable) or September 1965 (date of - CA: REVERSED RTC decision (ruled favour of Babasanta) since SLDC acted in bad
execution) faith (registered in ROD AFTER knowledge of disputed title)
HELD WON SLDC has a better right over Babasanta over the subject property.
1. Interest should run from date of execution since the agreement expressly stated so.
2. Where the contract itself provides for the terms and conditions HELD
a. So long as stipulation is valid, said stipulation controls - YES. SLDC has a better right over Babasanta.
i. (i.e. when interest will run) - Babasanta: Lots never sold to Babasanta
1. Parties (and courts) should honor the agreement o Contract to sell only, not contract of sale
2. No longer make any reference to provisions of the law o Contract to sell never perfected never fully paid
ii. (i.e. capacity of defendant-Piczon) o Babasanta never took possession of land
1. Expressly stipulated as guarantor - SLDC: Lots were sold to SLDC
2. Parties (and courts) cant demand him to function in different o IN GOOD FAITH SLDC was executed a deed of absolute sale in its favour
capacity (i.e. surety) instead o It took possession of land when it occupied it subsequently
- As to double sale:
o Law provides: in case of double sale; priorities in determining title:
Delivery, right, ownership Who has possession first in GF
KEY: Double sale Who has oldest title in GF
FACTS o In case at bar:
- Wife-Lu obtained loans from Babasanta eventually totalling to Php50K SLDC registered first BUT in BF; Babasanta didnt register at all
o Wife-Lu and Babasanta verbally agreed to transform the loan: So second priority governs
Contract to sell over two lots of Spouses Lu SLDC took possession in GF
With Php50K as downpayment o AND ULTIMATELY, double sale is only in arguendo;
Wife-Lu issued acknowledgment receipt since in the first place:
NOTE: no actual contract to sell nor contract of sale executed, but actuations SLDC contract of sale
evidence a perfected contract to sell Babasanta ONLY contract to sell
- PRINCIPLES IN BOOK: o AS TO TOPIC: The obligation to give a determinate thing (sub-lease of
o Contract of sale itself apartment doors) includes that of delivering all its accessions and
does not transfer ownership accessories, even though they may not have been mentioned.
only creates obligation to transfer ownership because: - THUS: When Caleon sub-leased the apartment doors, she also sub-leased all
o Delivery required for ownership accessions and accessories (i.e. LAND) leased from AGC.
Actual - OTHER principles in case:
Constructive 5 kinds o Caleon contention: Lease contract between Caleon and AGC (without any
Case at bar: express prohibition on subleasing) was ALREADY perfected before
o Babasanta never ANY form of delivery promulgation of BP 25,
Thus BP 25 is unconstitutional for impairing obligations of contracts
o SC:
RITA CALEON v. AGUS DEVELOPMENT CORPORATION (AGC), CA accession and Laws presumed constitutional constitutionality not lis mota of case
accessories The constitutional guaranty of non-impairment of obligations of
KEY: Sublease without consent contract is limited by and subject to the exercise of police power of
FACTS the State in the interest of public health, safety, morals and general
1. Caleon leased a lot owned by AGC welfare
2. Caleon constructed a 4-door apartment thereon
a. Then sub-leased to 2 rooms of said apartment to third parties
i. Without consent from AGC
3. When AGC learned of the sub-lease
a. It demanded Caleon and sub-lessees to vacate they refused
4. AGC filed ejectment case
a. Ground: BP 25, Sec 5 unauthorized sub-leasing without consent of the
b. Ruling: RTC, CA ruled in favour of AGC
5. Caleon appealed before SC
a. Contention:
i. Caleon leased LOT
ii. Sub-leased were BUILDINGS on the LOT
1. Thus the LOT was never sub-leased
WON the lot was included in the sub-lease between Caleon and the third parties
- Jurisprudence:
o the lease of a building would naturally include the lease of the lot
- Civil code:
o occupancy of a building implies the tenancy or possession in fact of the land
on which they are constructed.

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