Victoria Milling Co., Inc. v.

CA and Consolidated Sugar Corporation

G.R. No. 117356 June 19, 2000Quisumbing, J.
FACTS:

St. Therese Merchandising regularly bought sugar from Victorias Milling Co., Inc. In the course of their dealings,
Victorias Milling issued several Shipping List/Delivery Receipts (SLDRs) to St. ThereseMerchandising as proof of
purchases. Among these was SLDR No. 1214M which covers 25,000 bagsof sugar. Each bag contained 50 kilograms
and priced at P638.00 per bag. The transaction it coveredwas a direct sale.

On October 25, 1989, St. Therese Merchandising sold to Consolidated Sugar Corp. its rights in SLDRNo. 1214M
for P14,750,000.00. Consolidated Sugar Corp. issued checks in payment. That same
day,Consolidated Sugar Corp. wrote Victorias Milling that it had been authorized by St. ThereseMerchandising to
withdraw the sugar covered by SLDR No. 1214M.

Consolidated Sugar Corp. surrendered SLDR No. 1214M to Victorias Milling’s NAWACO warehouseand was allowed
to withdraw sugar. However, after 2,000 bags had been released, Victorias Millingrefused to allow further
withdrawals of sugar against SLDR No. 1214M because, according to it, St. Therese Merchandising had already
withdrawn all the sugar covered by the cleared checks.

ISSUE:
WON the contract was one of agency or sale

HELD:
Sale.

Victorias Milling heavily relies upon St. Therese Merchandising’s letter of authority allowingConsolidated Sugar
Corp. to withdraw sugar against SLDR No. 1214M to show that the latter was St. Therese Merchandising’s
agent. The pertinent portion of said letter reads: “This is to authorizeConsolidated Sugar Corporation or its
representative to withdraw for and in our behalf (stress supplied)the refined sugar covered by Shipping
List/Delivery Receipt = Refined Sugar (SDR) No. 1214 datedOctober 16, 1989 in the total quantity of 25, 000 bags.”

Art. 1868. By the contract of agency a person binds himself to render some service or to do somethingin
representation or on behalf of another, with the consent or authority of the latter.

The basis of agency is representation. On the part of the principal, there must be an actual intention toappoint or
an intention naturally inferable from his words or actions; and on the part of the agent,there must be an intention
to accept the appointment and act on it, and in the absence of such intent,there is generally no agency. One factor
which most clearly distinguishes agency from other legalconcepts is control; one person - the agent - agrees to act
under the control or direction of another -the principal.

Victorias Milling failed to sufficiently establish the existence of an agency relation betweenConsolidated Sugar Cor
p. and St. Therese Merchandising. The fact alone that it (St. ThereseMerchandising) had authorized withdrawal of
sugar by Consolidated Sugar Corp. “for and in our (St. Therese Merchandising’s) behalf” should not be eyed
as pointing to the existence of an agencyrelation. Further, Consolidated Sugar Corp. has shown that the 25,000
bags of sugar covered by theSLDR No. 1214M were sold and transferred by St. Therese Merchandising to it. A
conclusion that therewas a valid sale and transfer to Consolidated Sugar Corp. may, therefore, be made thus
capacitatingConsolidated Sugar Corp. to sue in its own name, without need of joining its imputed principal
St. Therese Merchandising as co-plaintiff.

Consolidated Sugar Corp. was a buyer of the SLDFR form, and not an agent of STM. Consolidated SugarCorp. was
not subject to St. Therese Merchandising’s control. That no agency was meant to beestablished by the
Consolidated Sugar Corp. and STM is clearly shown by Consolidated Sugar Corp.’scommunication to petitioner that
SLDR No. 1214M had been “sold and endorsed” to it.27 The use of the words “sold and endorsed” means that St.
Therese Merchandising and Consolidated Sugar Corp.intended a contract of sale, and not an agency.
Carabeo vs Dingco
647 SCRA 200

FACTS
· Domingo Carabeo entered into a contract "Kasunduan sa Bilihan ng Karapatan sa Lupa" with Sps Norberto
and Susan Peaches Dingco whereby Caraveo agreed to sell his rights over a 648 sq m unregistered land in Orani,
Bataan for P38,000. (initial payment of P10,000 upon signing of the contract, the remaining balance to be paid on
Sept 1990).
· Norberto & Dingco were later to claim that when they were about to hand in the balance of the purchase
price, Carabeo requested them to keep it first as he was yet to settle an on-going "squabble" over the land.
· Norberto & Dingco gave Carabeo small sums of money from time to time which totaled P9,100, on Carabeo’s
request according to them; due to Norberto & Dingco’ inability to pay the amount of the remaining balance in full,
according to Carabeo.
· Despite the alleged problem over the land, they insisted on Carabeo’s acceptance of the remaining balance
of P18,900 but Carabeo remained firm in his refusal, proffering as reason that he would register the land first.
· Sometime in 1994, Norberto & Dingco learned that the alleged problem over the land had been settled and
that Carabeo had caused its registration in his name on Dec 21, 1993. They offered to pay the balance but
Carabeo declined, drawing them to file a complaint before the Katarungan Pambarangay. No settlement was
reached, however, hence, N & D filed a complaint for specific performance before the RTC.
· Carabeo:
o sale was void for lack of object certain, the kasunduan not having specified the metes and bounds of the land.
o if the validity of the kasunduan is upheld, N & D failure to comply with their obligation to pay the balance of
the purchase price would render the action premature.
o Carabeo maintained that they failed to pay the balance of P28,000 on Sept 1990 to thus constrain him to
accept installment payments totaling P9,100.
Carabeo passed away after the case was submitted for decision or on Jan 31, 2001, Records do not show that
Carabeo’s counsel informed the RTC where the complaint was lodged, of his death and that proper substitution
was effected in accordance with Section 16, Rule 3, Rules of Court.
Lower courts
· RTC Ordered defendant to sell his right over 648 sq m of land pursuant to the contract dated July 10, 1990 by
executing a Deed of Sale thereof after the payment of P18,900 by the plaintiffs;
· CA affirmed.
issues/ruling
object certain of the contract
That the kasunduan did not specify the technical boundaries of the property did not render the sale a nullity.
The requirement that a sale must have for its object a determinate thing is satisfied 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.
lack of spousal consent
This was raised only on appeal, hence, will not be considered, in the present case, in the interest of fair play, justice
and due process.
carabeo’s death
Carabeo’s son: death of Carabeo causes the dismissal of the action filed by N & D; resp’ cause of action being an
action in personam.
Bonilla v. Barcena: The question as to whether an action survives or not depends on the nature of the action and
the damage sued for. In the causes of action which survive, the wrong complained [of] affects primarily and
principally property and property rights, the injuries to the person being merely incidental, while in the causes of
action which do not survive, the injury complained of is to the person, the property and rights of property affected
being incidental.
Assuming arguendo, that the kasunduan is deemed void, there is a corollary obligation of Carabeo to return the
money paid by Norberto & Dingco, and since the action involves property rights, it survives.
Trial on the merits was already concluded before Carabeo died. Since the TC was not informed of Carabeo’s
death, it may not be faulted for proceeding to render judgment without ordering his substitution. Its judgment is
thus valid and binding upon Carabeo’s legal representatives or successors-in-interest, insofar as his interest in the
property subject of the action is concerned.
The death of a client immediately divests the counsel of authority. Thus, in filing a Notice of Appeal, Carabeo’s
counsel of record had no personality to act on behalf of the already deceased client who, it bears reiteration, had
not been substituted as a party after his death. The TC’s decision had thereby become final and executory, no
appeal having been perfected.
Petition Denied.
Figuracion vs. Figuracion-Gerilla
G.R. No. 151334
Topic: Partition of inherited property (intestate) originally belonging to CPG but was not immediately liquidated
and delivered to heirs upon death of one of the spouses.
Date: February 13, 2013
Petitioners: CAROLINA (CARLINA) VDA. DE FIGURACION, HEIRS OF ELENA FIGURACION-ANCHETA, namely:
LEONCIO ANCHETA, JR., and ROMULO ANCHETA, HEIRS OF HILARIA A. FIGURACION, namely: FELIPA FIGURACION-
MANUEL, MARY FIGURACION-GINEZ, and EMILIA FIGURACION-GERILLA, AND HEIRS OF QUINTIN FIGURACION,
namely: LINDA M. FIGURACION, LEANDRO M. FIGURACION, II, and ALLAN M. FIGURACION
Respondents: EMILIA FIGURACION-GERILLA,

FACTS:
Petition
Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision dated December 11,
2001 of the Court of Appeals (CA) which reversed and set aside the Decision dated June 26, 1997 of the Regional
Trial Court (RTC) of Urdaneta, Pangasinan, Branch 49.
The RTC decision:
Dismissed respondent Emilia Figuracion-Gerilla’s (Emilia) complaint for partition, annulment of documents,
reconveyance, quieting of title and damages, and
Annulled the Affidavit of Self-Adjudication executed by petitioner Carolina (Carlina) Vda. De Figuracion (Carolina).
Antecedent Facts
The parties are the heirs of Leandro Figuracion (Leandro) who died intestate in May 1958.
Subject of the dispute are two parcels of land both situated in Urdaneta, Pangasinan, which were acquired by
Leandro during his lifetime. These properties were: (1) Lot No. 2299 and (2) Lot No. 705.
Also involved in the controversy is Lot No. 707 originally owned by Eulalio Adviento (Eulalio),
Eulalio begot Agripina Adviento (Agripina) with his first wife Marcela Estioko (Marcela), whom Eulalio survived.
When he remarried, Eulalio had another daughter, herein petitioner Carolina, with his second wife, Faustina
Escabesa (Faustina).
On November 28, 1961, Agripina executed a Deed of Quitclaim over the eastern half of Lot No. 707 in favor of her
niece, herein respondent Emilia.
On December 11, 1962, petitioner Carolina executed an Affidavit of Self-Adjudication adjudicating unto herself the
entire Lot No. 707 as the sole and exclusive heir of her deceased parents, Eulalio and Faustina. Carolina also
executed a Deed of Absolute Sale over Lot No. 707 in favor of petitioners Hilaria and Felipa, who in turn
immediately caused the cancellation of OCT No. 15867 and the issuance of TCT No. 42244 in their names.
In 1971, Emilia and her family went to the United States and returned to the Philippines only in 1981. Upon her
return and relying on the Deed of Quitclaim, she built a house on the eastern half of Lot No. 707
The legal debacle of the Figuracions started in 1994 when Hilaria and her agents threatened to demolish the house
of Emilia who, in retaliation, was prompted to seek the partition of Lot No. 707 as well as Lot Nos. 2299 and 705.
During pre-trial conference, the issues were simplified into:
W/N Lot Nos. 2299 and 705 are the exclusive properties of Leandro
W/N respondent Emilia is the owner of the eastern half of Lot No. 707
RTC rendered its Decision dated June 26, 1997:
RTC ruled that a partition of Lot Nos. 2299 and 705 will be premature since their ownership is yet to be transmitted
from Leandro to his heirs
RTC held that petitioner Carolina transferred only her one-half (½) share to Felipa and Hilaria and any conveyance
of the other half pertaining to Agripina was void.
RTC refused to adjudicate the ownership of the lot’s eastern half portion in favor of respondent Emilia since a
settlement of the estate of Eulalio is yet to be undertaken.
Respondent Emilia appealed to the CA, which, in its Decision dated December 11, 2001, ruled that the RTC erred in
refusing to partition Lot No. 707.
The CA agreed with the RTC that a partition of Lot Nos. 2299 and 705 is indeed premature considering that there is
a pending legal controversy with respect to Lot No. 705 and Lot No. 2299
The CA explained that there is no necessity for placing Lot No. 707 under judicial administration since Carolina had
long sold her ½ pro indiviso share to Felipa and Hilaria.
The proper action in such case is for a division or partition of the entire lot.
A new judgment is hereby rendered declaring Lot No. 707 to be owned by:
appellant Emilia Figuracion-Gerilla [herein respondent], ½ pro indiviso share
appellee Felipa Figuracion [herein petitioner], ¼ pro indiviso share,
appellee Hilaria Figuracion [herein petitioner], ¼ pro indiviso share
Respondent Emilia appealed the CA’s decision to the Court
In a Decision promulgated on August 22, 2006, the Court denied the appeal, concurring with the CA’s ruling that a
partition of Lot Nos. 2299 and 705 would be inappropriate considering that: (1) the ownership of Lot No. 705 is still
in dispute; and (2) there are still unresolved issues as to the expenses chargeable to the estate of Leandro.
The present petition involves the appeal of the petitioners who attribute this sole error committed by the CA.
Position of Petitioner
The petitioners argue that respondent Emilia has no valid basis for her claim of ownership because the Deed of
Quitclaim executed in her favor by Agripina was in fact a deed of donation that contained no acceptance
Position of Respondent
Respondent Emilia contends that the Deed of Quitclaim should be considered an onerous donation that requires
no acceptance as it is governed by the rules on contracts and not by the formalities for a simple donation.

ISSUE:
W/N the decision rendered by the CA is contrary to law and existing jurisprudential dicta laid down by the
honorable SC.

HELD/RATIO:

No, CA committed no reversible error in holding that the respondent is entitled to have Lot No. 707 partitioned.
The CA judgment must, however, be modified to conform to the below-discussed apportionment of the lot
among Carolina, Hilaria, Felipa and Emilia.

Issues not raised before the courts a quo cannot be raised for the first time in a petition filed under Rule 45
The Court finds that the issues on the supposed defects and actual nature of the Deed of Quitclaim are questions
of fact. It is settled that questions of fact are beyond the province of a Rule 45 petition since the Court is not a trier
of facts
The respondent can compel the partition of Lot No. 707
The first stage in an action for partition is the settlement of the issue of ownership.
The respondent traces her ownership over the eastern half of Lot No. 707 from the Deed of Quitclaim executed by
Agripina, who in turn, was the co-owner thereof being one of the legitimate heirs of Eulalio.
The respondent’s right to demand for partition is not barred by acquisitive prescription or laches.
The Court finds it unavailing in this case in view of the proximity of the period when the co-ownership was
expressly repudiated and when the herein complaint was filed.
Laches is the negligence or omission to assert a right within a reasonable time, warranting a presumption that the
party entitled to assert it has abandoned it or declined to assert it.
More so, laches is a creation of equity and its application is controlled by equitable considerations. It cannot be
used to defeat justice or perpetrate fraud and injustice. Neither should its application be used to prevent the
rightful owners of a property from recovering what has been fraudulently registered in the name of another.
Partition of Lot No. 707
Under the Old Civil Code which was then in force at the time of Eulalio and Marcela’s marriage, Lot No. 707 was
their conjugal property.
When Marcela died, one-half of the lot was automatically reserved to Eulalio, the surviving spouse, as his share in
the conjugal partnership. Marcela’s rights to the other half, in turn, were transmitted to her legitimate child,
Agripina and surviving spouse Eulalio.
When he remarried, Eulalio’s one half portion of the lot representing his share in the conjugal partnership and his
usufructuary right over the other half were brought into his second marriage with Faustina.
When Eulalio died on July 20, 1930, ¼ portion of the lot was reserved for Faustina as her share in the conjugal
partnership. The remaining ¼ were transmitted equally to the widow Faustina and Eulalio’s children, Carolina and
Agripina.
Upon the death of Faustina, the shares in Lot No. 707 were in turn inherited by Carolina.
Consequently, Agripina is entitled to 5/8 portion of Lot No. 707 while the remaining 3/8 pertains to Carolina.
Thus, when Carolina sold Lot No. 707 to Hilaria and Felipa, the sale affected only 3/8 portion of the subject lot.
Since the Deed of Quitclaim, bequeathed only the ½ eastern portion of Lot No. 707 in favor of Emilia instead of
Agripina’s entire 5/8 share thereof, the remaining 1/8 portion shall be inherited by Agripina’s nearest collateral
relative, who, records show, is her sister Carolina.
Final Ruling:
The petition is DENIED. The Decision of the Court of Appeals in dated December 11, 2001, is AFFIRMED with
MODIFICATIONS as follows:
3/8 portion of Lot No. 707 shall pertain in equal shares to Hilaria Figuracion and Felipa Figuracion-Manuel
½ portion of Lot. No. 707 shall pertain to Emilia Figuracion-Gerilla
1/8 portion of Lot No. 707 shall pertain to the estate of Carolina (Carlina) Vda. De Figuracion.
The case is REMANDED to the Regional Trial Court of Urdaneta, Pangasinan, Branch 49, who is directed to conduct
a PARTITION BY COMMISSIONERS and effect the actual physical partition of the subject property, as well as the
improvements that lie therein, in the foregoing manner.
VDA. De Catindig vs. Heirs of Roque
FACTS:
The subject of the complaint is a fishpond, known as Lot No. 4626 of the Malolos Cadastre, which has an area of
more than thirteen hectares. It is registered in the names of the following persons ,Catalina Roque, married to
Anastacio Katipunan, Roberto Roque, married to Gregoria Borlongan, Ines Roque, married to Lucio Adriano,
Barbara Roque, married to Eusebio Villanueva, Apolonio Roque, married to Isabel Borlongan, Concordia Roque,
single, German Ramirez, Irene Boloran, married to Faustino Panganiban, Leonila de Guzman, 12 years old, single
Petitioner was a lessee for a term of ten years counted from October 1, 1941 for a total rental of six thousand
pesos. After the lease’s termination, Mrs. Catindig remained in possession of the fishpond due to the reason that
she was negotiating with the co-owners for the purchase thereof.
On October 18, 1960 German Ramirez, one of the co-owners, executed a deed wherein he sold his 2/16 share to
Mrs. Catindig for P6,500 (Exh. E). The sale was annotated on the title on October 19, 1960. Two weeks later, Pedro
Villanueva, one of the co-owners, learned of the sale executed by German Ramirez. That sale retroacted to April
13, 1950.
On November 18, 1960 the respondents filed this action against Mrs. Catindig to compel her to allow them to
redeem the portion sold by German Ramirez. In April, 1962 the respondents amended their complaint by
including, inter alia, a prayer for the recovery of the possession of the fishpond.
“The Court of Appeals found that:
1. The consideration of P52,000 was not paid by Mrs. Catindig to the co-owners because she was not able to obtain
a loan, the proceeds of which would have been used to pay the co-owners who had executed simulated sales of
their shares, as shown in the private documents, Exhibits 6 to 26. (The originals of those documents were allegedly
lost. Only photostatic copies thereof were presented in evidence).
2. Because Mrs. Catindig did not pay the price of P52,000, the projected sale, "which was in truth a simulated one
so as to enable her just to mortgage the property in order to secure the necessary amount with which to pay the
consideration" was void ab initio. There was no notarized deed of sale because Mrs. Catindig did not pay the price
to the co-owners except German Ramirez.
3. Ines Roque and the heirs of Roberto Roque did not barter their shares for the two parcels of land owned by Mrs.
Catindig. What the said co-owners did was to possess the lands of Mrs. Catindig in exchange for the latter's
possession of their shares in the fishpond.
4. Considering the area of the fishpond and the upward trend in values, the amount of P6,000 a year is the
reasonable compensation for its use and enjoyment (Resolution amending the decision)”

ISSUE: Was the sale of German Ramirez to Mrs. Catindig valid?

RULING
The Supreme Court held that, FIRST as a matter of fairness and equity or to avoid unjust enrichment, the liability of
Mrs. Catindig for the reasonable value of the use and occupation of the fishpond should be limited to the period
from October 1, 1951 up to the time in January, 1964 when she turned over the fishpond to the receiver, namely,
the deputy clerk of court of the Court of First Instance of Bulacan, Malolos Branch I.
It is the receiver who should deliver to the respondents the possession of the fishpond which apparently has been
in custodia legis.
SECOND, from the compensation of P6,000 per annum which Mrs. Catindig is obligated to pay to the respondents,
should be deducted the 2/16 portion of said compensation, corresponding to the share of German Ramirez, from
October 1, 1951 to January, 1964. Thereafter, Mrs. Catindig is entitled to demand the 2/16 share in the net fruits
or earnings of the fishpond from the receiver until the said share is redeemed by the respondents.
Ines Roque and the heirs of Roberto Roque should deliver to Mrs. Catindig the possession of the two parcels of
riceland already mentioned and account for the fruits thereof beginning January, 1964 when Mrs. Catindig ceased
to have possession of their 3/16 share. The trial court should hold a hearing to determine the amount of the net
fruits which Mrs. Catindig is entitled to receive from the said co-owners. She has the right to retain the 3/16
portion of the annual rental of P6,000 corresponding to the shares of Ines Roque and the heirs of Roberto Roque.
THIRD, the respondents (except German Ramirez), as owners of the fishpond, should reimburse Mrs. Catindig for
the amount of the land taxes advanced by her (See Exh. 27; Par. II [iii], Lease Contract, Exh. C-1). "Any person who
is constrained to pay the taxes of another shall be entitled to reimbursement from the latter" (Art. 2175, Civil
Code; See art. 597). One situation envisaged in that provision is when the possessor of land under lease or
otherwise has to pay the taxes to prevent a seizure of the property by the government, the owner having become
delinquent in the payment of the land tax (p. 72, Report of the Code Commission).
One last point should be resolved. The Court of Appeals and the trial court, in sanctioning the respondents' right to
redeem from Mrs. Catindig the 2/16 share sold to her by German Ramirez, relied on article 1088 of the Civil Code
which refers to the sale by any of the heirs of his hereditary rights to a stranger. That article has no relevant
application to this case.
Inasmuch as the fishpond is under co-ownership, not co-heirship, and what are involved herein are the shares of
co-owners, not the hereditary rights of co-heirs, it is article 1620 of the Civil Code that is applicable. Article 1620
provides that "a co-owner of a thing may exercise the right of redemption in case the shares of all the other co-
owners or of any of them, are sold to a third person." The period for exercising the right of legal redemption is that
fixed in article 1623 of the Civil Code, not the period fixed in article 1524 of the Spanish Civil Code.
WHEREFORE, the judgment of the trial court and the Court of Appeals is affirmed with the following modifications:
1. The receiver (not Asuncion Meneses Vda. de Catindig) should deliver the possession of the fishpond to the
respondents or their duly authorized representative, together with 14/16 of the net earnings of the fishpond from
January 15, 1964 up to the time the possession is delivered to the respondents.
2. The receiver should deliver to Mrs. Catindig a 2/16 share of the net earnings of the fishpond, corresponding to
the share of German Ramirez, from January 15, 1964 up to the time the said share is redeemed from her.
3. From the annual compensation of P6,000 a year due from Mrs. Catindig for the use and enjoyment of the
fishpond from October 1, 1951 up to January 15, 1964 (when the fishpond was placed under receivership) should
be deducted (a) 2/16 which correspond to the share of German Ramirez, (b) 3/16 which correspond to the shares
of Ines Roque and the heirs of Roberto Roque, and (c) 14/16 of the realty taxes on the fishpond paid by Mrs.
Catindig (See Exh. 27).
4. Ines Roque and the heirs of Roberto Roque should deliver to Mrs. Catindig the possession of her two parcels of
riceland located at Barrio Pitpitan, Bulacan, Bulacan, render an accounting of the fruits thereof from January 15,
1964 up to the time the possession is delivered and pay to her the value of the net fruits thereof. For that purpose,
the trial court should hold the appropriate hearing. No costs..
G.R. No. 109410 August 28, 1996
CLARA M. BALATBAT, petitioner,
vs.
COURT OF APPEALS and Spouses JOSE REPUYAN and AURORA REPUYAN,respondents.
Facts:
Aurelio Roque field a complaint for partition against his children Corazon, Feliciano, Severa and Osmundo Roque,
and Alberto de los Santos before the CFI. The Roque children were declared in default and Aurelio presented
evidence ex-parte. Eventually, the trial court rendered a decision in favor of Aurelio; holding that Aurelio and his
wife Maria Mesina acquired the lot (TCT 51330) during their conjugal union, as well as the house that was
constructed thereon; that when Maria Mesina died, leaving no debt, Aurelio (as surviving spouse) was entitled to
½ share pro-indiviso of the conjugal property (i.e. house and lot) and that Aurelio and his 4 children were entitled
to 1/5 share pro-indiviso each of the ½ share pro-indiviso forming the estate of Maria Mesina; ordering the
partition of the properties;
On 5 October 1979, the Register of Deeds of Manila issued TCT 135671 (with Aurelio Roque having 6/10 share; and
the Roque children with 1/10 share each). On 1 April 1980, Aurelio sold his 6/10 share in TCT 135671 to
respondent spouses Repuyan. Repuyan caused the annotation of her affidavit of adverse claim on the TCT 135671,
“claiming that she bought 6/10 portion of the property from Aurelio Roque for the amount of P50,000.00 with a
downpayment of P5,000.00 and the balance of P45,000.00 to be paid after the partition and subdivision of the
property.”
On 20 August 1980, Aurelio Roque filed a complaint for “Rescission of Contract” against spouses Repuyan before
the then CFI Manila (Branch IV, Civil Case 134131). The complaint is grounded on spouses Repuyan’s failure to pay
the balance of P45,000.00 of the purchase price. On 5 September 1980, spouses Repuyan filed their answer with
counterclaim.
In the meantime, the trial court issued an order in Civil Case 109032 (Partition case) dated 2 February
1982,ordering the Deputy Clerk of the court to sign the deed of absolute sale for and in behalf of Roque children,
in order to effect the partition of the property involved in the case. A deed of absolute sale was executed on 4
February 1982 between Aurelio, Corazon, Feliciano, Severa and Osmundo Roque and petitioner Clara Balatbat,
married to Alejandro Balatbat. On 14 April 1982, Clara Balatbat filed a motion for the issuance of a writ of
possession which was granted by the trial court on 14 September 1982, subject, however, to valid rights and
interest of third persons over the same portion thereof, other than vendor or any other person or persons privy to
or claiming any rights or interest under it. The corresponding writ of possession was issued on 20 September 1982.
On 20 May 1982, Clara Balatbat filed a motion to intervene in Civil Case 134131 which was granted as per court’s
resolution of 21 October 1982. However, Clara Balatbat failed to file her complaint in intervention.
On 15 April 1986, the trial court rendered a decision dismissing the complaint, and declaring the Deed of Absolute
Sale dated 1 April 1980 as valid and enforceable and Aurelio is, as he is hereby ordered, to partition and subdivide
the land covered by TCT 135671, and to aggregate therefrom a portion equivalent to 6/10 thereof, and cause the
same to be titled in the name of spouses Repuyan, and after which, the latter to pay Aurelio the sum of
P45,000.00.
On 9 December 1988, Balatbat and her husband filed a complaint for delivery of the owners duplicate copy of TCT
135671 before the RTC against Jose and Aurora Repuyan. On 27 January 1989, spouses Repuyan filed their answer
with affirmative defenses and compulsory counterclaim. On 2 August 1990, the RTC Manila rendered a decision
dismissing the complaint, finding that the Balatbats were not able to establish their cause of action against the
Repuyans and have no right to the reliefs demanded in the complaint.
Dissatisfied, Balatbat filed an appeal before the Court of Appeals (CA-GR CV 29994) which rendered decision on 12
August 1992, affirming the judgment appealed.
Issues:
(1) Whether the alleged sale to private respondents was merely executory and not a consummated transaction.
(2) Whether there was double sale as contemplated under Art. 1544 of CC.
(3) Whether petitioner was a buyer in good faith and for value.
Held:
(1) NO. Contrary to petitioner’s contention that the sale dated April 1, 1980 in favor of private respondents
Repuyan was merely executory for the reason that there was no delivery of the subject property and that
consideration/price was not fully paid, SC find the sale as consummated, hence, valid and enforceable. The Court
dismissed vendor’s Aurelio Roque complaint for rescission of the deed of sale and declared that the Sale dated
April 1, 1980, as valid and enforceable. No appeal having been made, the decision became final and executory.
The execution of the public instrument, without actual delivery of the thing, transfers the ownership from the
vendor to the vendee, who may thereafter exercise the rights of an owner over the same. In the instant case,
vendor Roque delivered the owner’s certificate of title to herein private respondent. The provision of Article
1358 on the necessity of a public document is only for convenience, not for validity or enforceability. It is not a
requirement for the validity of a contract of sale of a parcel of land that this be embodied in a public instrument.
A contract of sale being consensual, it is perfected by the mere consent of the parties. Delivery of the thing
bought or payment of the price is not necessary for the perfection of the contract; and failure of the vendee to
pay the price after the execution of the contract does not make the sale null and void for lack of consideration
but results at most in default on the part of the vendee, for which the vendor may exercise his legal remedies.
(2) Article 1544 of the Civil Code provides that in case of double sale of an immovable property, ownership shall
be transferred (1) to the person acquiring it who in good faith first recorded it in the Registry of Property; (2) in
default thereof, to the person who in good faith was first in possession; and (3) in default thereof, to the person
who presents the oldest title, provided there is good faith.
In the case at bar, vendor Aurelio Roque sold 6/10 portion of his share to private respondents Repuyan on April 1,
1980. Subsequently, the same lot was sold again by vendor Aurelio Roque (6/10) and his children (4/10),
represented by the Clerk of Court pursuant to Section 10, Rule 39 of the Rules of Court, on February 4, 1982.
Undoubtedly, this is a case of double sale contemplated under Article 1544 of the New Civil Code.
Evidently, private respondents Repuyan’s caused the annotation of an adverse claim on the title of the subject
property on July 21, 1980. The annotation of the adverse claim in the Registry of Property is sufficient compliance
as mandated by law and serves notice to the whole world. On the other hand, petitioner filed a notice of lis
pendens only on February 2, 1982. Accordingly, private respondents who first caused the annotation of the
adverse claim in good faith shall have a better right over herein petitioner. As between two purchasers, the one
who has registered the sale in his favor, has a preferred right over the other who has not registered his title even if
the latter is in actual possession of the immovable property. Further, even in default of the first registrant or first
in possession, private respondents have presented the oldest title. Thus, private respondents who acquired the
subject property in good faith and for valuable consideration established a superior right as against the petitioner.
(3) Petitioner cannot be considered as a buyer in good faith. If petitioner did investigate before buying the land on
February 4, 1982, she should have known that there was a pending case and an annotation of adverse claim was
made in the title of the property before the Register of Deeds and she could have discovered that the subject
property was already sold to the private respondents. It is incumbent upon the vendee of the property to ask for
the delivery of the owner’s duplicate copy of the title from the vendor. One who purchases real estate with
knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as
against the true owner of the land or of an interest therein; and the same rule must be applied to one who has
knowledge of facts which should have put him upon such inquiry and investigation as might be necessary to
acquaint him with the defects in the title of his vendor. Good faith, or the want of it is not a visible, tangible fact
that can be seen or touched, but rather a state or condition of mind which can only be judged of by actual or
fancied tokens or signs.
Heirs of Escalantar vs. CA
281 SCRA 176

Facts
Spouses Nombre and Cari-an died without a child. Nombre’s heirs include his nephews andgrandnephews. Two
parcels of land formed part of the estate of Nombre and Cari-an. The PrivateRespondents, heirs of Cari-an
executed a Deed of Sale in favor of petitioners Escanlar and Holgado.Petitioners paid P50,000.00 as a form of
down payment, but was unable to pay the remaining balance(paid only 12 installments). Being former lessees,
petitioners continued in possession of the said lots, andcontinued to pay rent.Private Respondent later sold the
said lots to the Chua spouses. Private Respondent then filed an actionfor cancellation of sale against petitioners,
for failure to pay the balance. Petitioners however, sold their rights and interests over the said lots to Jayme, and
turned over possession. The Regional Trial Court of Himamaylan which took cognizance of Special Proceeding ruled
that the Sale to petitioners was nullifiedsince all the properties of the estate had been transferred and titled to in
the name of the Chua spouses.On appeal, the Court of Appeals affirmed, questioned deed of sale (one with
petitioners) is a contract tosell because it shall become effective only upon approval by the probate court and
upon full payment of the purchase price.
Issue
Whether or not the sale was a contract to sell and therefore, private respondents may rescind the thecontract the
moment the buyer fails to pay.
Held
The sale of rights, interests and participation as to 1/2 portion
pro indiviso
of the two subject lots is acontract of sale for the following reasons:
First
, private respondents as sellers did not reserve untothemselves the ownership of the property until full payment of
the unpaid balanceof P225,000.00.
Second
, there is no stipulation giving the sellers the right to unilaterally rescind thecontract the moment the buyer fails to
pay within the fixed period. Prior to the sale, petitioners were in possession of the subject property as
lessees. Upon sale to them of the rights, interests and participationas to the 1/2 portion
pro indiviso
, they remained in possession, not in concept of lessees anymore but asowners now through symbolic delivery
known as
traditio brevi manu
. Under Article 1477 of the CivilCode, the ownership of the thing sold is acquired by the vendee upon actual or
constructive deliverythereof.In a contract of sale, the non-payment of the price is a resolutory condition
which extinguishes thetransaction that, for a time, existed and discharges the obligations created thereunder. The
remedy of anunpaid seller in a contract of sale is to seek either specific performance or rescission.In contracts to
sell, ownership is retained by the seller and is not to pass until the full payment of the price. Such payment is a
positive suspensive condition, the failure of which is not a breach of contract butsimply an event that prevented
the obligation of the vendor to convey title from acquiring bindingforce. To illustrate, although a deed of
conditional sale is denominated as such, absent a
proviso
that titleto the property sold is reserved in the vendor until full payment of the purchase price nor a
stipulationgiving the vendor the right to unilaterally rescind the contract the moment the vendee fails to pay
within afixed period, by its nature, it shall be declared a deed of absolute sale.The petitions are hereby
GRANTED. The decision of the Court of Appeals under review is herebyREVERSED AND SET ASIDE.
CIR vs Arnoldus Carpentry Shop
GR No. 71122
Subject: Sales
Doctrine: Contract of Sale vs Contract for a Piece of Work
Facts: Arnoldus Carpentry Shop, Inc. is a domestic corporation which has been in existence since 1960 which has
for its purpose the “preparing, processing, buying, selling, exporting, importing, manufacturing, trading and dealing
in cabinet shop products, wood and metal home and office furniture, cabinets, doors, windows, etc., including
their component parts and materials, of any and all nature and description”. The company kept samples or models
of its woodwork on display from where its customers may refer to when placing their orders.
On March 1979, the examiners from BIR who conducted an investigation on the company’s tax liabilities reported
that subject corporation should be considered a contractor and not a manufacturer since the corporation renders
service in the course of an independent occupation representing the will of his employer only as to the result of his
work, and not as to the means by which it is accomplished. Hence, in the computation of the percentage tax, the
3% contractor’s tax should be imposed instead of the 7% manufacturer’s tax. However, responded company holds
that the carpentry shop is a manufacturer and therefore entitled to tax exemption on its gross export sales under
Section 202 (e) of the National Internal Revenue Code. CIR rendered its decision classifying the respondent as
contractor which was in turn reversed by the CTA. Hence, this appeal.
Issue: Whether or not the Court of Tax Appeals erred in holding that private respondent is a manufacturer and not
a contractor.
Held: The Supreme Court holds that the private respondent is a “manufacturer” as defined in the Tax Code and not
a “contractor” under Section 205(e) of the Tax Code.
Petitioner CIR wants to impress upon this Court that under Article 1467, the true test of whether or not the
contract is a piece of work (and thus classifying private respondent as a contractor) or a contract of sale (which
would classify private respondent as a manufacturer) is the mere existence of the product at the time of the
perfection of the contract such that if the thing already exists, the contract is of sale, if not, it is work. This is not
the test followed in this jurisdiction. Based on Art. 1467, what determines whether the contract is one of work or
of sale is whether the thing has been manufactured specially for the customer and “upon his special order.” Thus,
if the thing is specially done at the order of another, this is a contract for a piece of work. If, on the other hand, the
thing is manufactured or procured for the general market in the ordinary course of one’s business, it is a contract
of sale. The distinction between a contract of sale and one for work, labor and materials is tested by the inquiry
whether the thing transferred is one not in existence and which never would have existed but for the order of the
party desiring to acquire it, or a thing which would have existed and has been the subject of sale to some other
persons even if the order had not been given. The one who has ready for the sale to the general public finished
furniture is a manufacturer, and the mere fact that he did not have on hand a particular piece or pieces of
furniture ordered does not make him a contractor only.
A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business
manufactures or procures for the – general market, whether the same is on hand at the time or not, is a contract
of sale, but if the goods are to be manufactured specially for the customer and upon his special order, and not for
the general market, it is a contract for a piece of work. The facts show that the company had a ready stock of its
shop products for sale to its foreign and local buyers. As a matter of fact, the purchase orders from its foreign
buyers showed that they ordered by referring to the models designated by petitioner. Even purchases by local
buyers for television cabinets were by orders for existing models except only for some adjustments in sizes and
accessories utilized.
The Court finds itself in agreement with CTA and as the CTA did not err in holding that private respondent is a
“manufacturer,” then private respondent is entitled to the tax exemption under See. 202 (d) and (e) now Sec. 167
(d) and (e)] of the Tax Code.