Académique Documents
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79. Rudolf Lietz, Inc. vs CA, Agapito Buriol, Tiziana Turatello, Paola Sani (Jal)
19 Dec 2005 – Tinga *land leased to Italians and subsequently sold; area less than what was in the contract
Facts:
1. Agapito Buriol owned a parcel of unregistered land in Palawan.
2. On 15 Aug 1986, Buriol entered into a lease agreement with Flavia Turatello, Tiziana Turatello, and Paola Sani, all Italians,
involving 1 hectare of the property. Lease agreement was for 25 years, renewable for another 25 years.
3. The Italians then took possession of the land after paying a downpayment of ₱10,000. The lease agreement was reduced into
writing in Jan 1987.
4. On 17 Nov 1986, Buriol sold the land to Rudolf Lietz, Inc. for ₱30,000. The Deed of Absolute Sale states that the land measured
5 hectares, more or less. It also described the boundaries of the land.
5. Lietz later discovered that Buriol owned only 4 hectares, with 1 more covered by the lease agreement. Hence, only 3 hectares
were actually delivered.
6. Lietz then filed a complaint for Annulment of Lease with Recovery of Possession against Buriol and the Italians. He alleged that
Buriol sold to him the lot in evident bad faith and malice knowing that he owned only 4 hectares, not 5.
7. The trial court dismissed the complaint and the counterclaim of the Italians for damages.
8. The CA affirmed the dismissal. It held that under Article 1542, Lietz is no longer entitled to a reduction in price.
9. Lietz appeals. He contends that he is entitled to reduction under Article 1539.
Issue: Is Lietz entitled to a reduction in the purchase price of the lot because of the reduced area of the property delivered to him?
Held: No. Under Article 1542, there shall be no reduction in the purchase price even if the area delivered is less than that stated in
the contract.
Decision: Affirmed.
Ruling:
1. Article 1539 governs a sale of immovable by the unit, that is, at a stated price per unit area. In a unit price contract, the
statement of area of immovable is not conclusive and the price may be reduced or increased depending on the area actually
delivered.
2. In some instances, a sale of an immovable may be made for a lump sum and not at a rate per unit. In the case where the area
of the immovable is stated in the contract based on an estimate, the actual area delivered may not measure up exactly with the
area stated in the contract.
3. A vendee of land, when sold in gross or with the description “more or less” with reference to its area, does not thereby ipso
facto take all risk of quantity in the land. The use of “more or less” or similar words in designating quantity covers only a
reasonable excess or deficiency.
4. What really defines a piece of ground is not the area mentioned in its description, but the boundaries therein laid down, as
enclosing the land and indicating its limits. In a contract of sale of land in a mass, it is well established that the specific
boundaries stated in the contract must control over any statement with respect to the area contained within its boundaries.
5. In this case, the sale is one made for a lump sum. The Deed of Absolute Sale shows that the parties agreed on the purchase
price on a predetermined area of 5 hectares within the specified boundaries and not based on a particular rate per area.
6. In accordance with Article 1542, there shall be no reduction in the purchase price even if the area delivered to Lietz is less than
that stated in the contract. The area within the boundaries as stated in the contract shall control over the area agreed upon.
7. Lietz had an ocular inspection prior to the perfection of the contract. Thus, he gained a fair estimate of the area of the property
sold to him. Also, his subscription to the Deed of Absolute Sale indicates his assent to the correct description of the boundaries
of the property.
Law:
Art. 1539. The obligation to deliver the thing sold includes that of placing in the control of the vendee all that is mentioned in the
contract, in conformity with the following rules:
If the sale of real estate should be made with a statement of its area, at the rate of a certain price for a unit of measure or
number, the vendor shall be obliged to deliver to the vendee, if the latter should demand it, all that may have been stated in the
contract; but, should this be not possible, the vendee may choose between a proportional reduction of the price and the
rescission of the contract, provided that, in the latter case, the lack in the area be not less than one-tenth of that stated. x x x
Art. 1542. In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there
shall be no increase or decrease of the price, although there be a greater or lesser area or number than that stated in the contract.
The same rule shall be applied when two or more immovables are sold for a single price; but if, besides mentioning the boundaries,
which is indispensable in every conveyance of real estate, its area or number should be designated in the contract, the vendor shall
be bound to deliver all that is included within said boundaries, even when it exceeds the area or number specified in the contract;
and, should he not be able to do so, he shall suffer a reduction in the price, in proportion to what is lacking in the area or number,
84. Behn, Meyer & Co. (Ltd.) (aka Company) vs. Teodoro Yangco (Garsha)
September 18, 1918 – Malcolm *delivery of soda case with a Carabao brand |
Facts:
1. A memorandum agreement (“Contract No. 37”) was executed by the duly authorized parties of this case.
2. The contract of sale executed is composed of three parts:
a) Subject Matter and Consideration
Object: 80 drums of caustic soda, 76 per cent "Carabao" brand
Price: $9.75 per one hundred pounds
What are included in the price: Cost, insurance, and freight included
Time of shipment: March, 1916
Place of delivery: Manila
Time of Payment: On delivery of the documents
b) Place of Delivery
The contract provided for "c.i.f. Manila, pagadero against delivery of documents."
c) Time of Delivery
The contract provided for: "Embarque: March 1916"
The merchandise was in fact shipped from New York on the Steamship Chinese Prince on April 12, 1916.
3. Merchandise was shipped from New York on a steamship.
Note:
i. The goods were not shipped nor consigned from New York to petitioner Company.
ii. The bill of lading was for goods received from Neuss Hesslein & Co.
iii. There were documents evidencing said shipment and symbolizing the property were sent by Neuss Hesslein &
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Co. to the Bank of the Philippine Islands with a draft upon Behn, Meyer & Co. and with instructions to deliver the
same
iv. The court later on ruled that the property is transferred to petitioner Company depends on when and if Behn,
Meyer & Co. should pay the draft.
4. The steamship was DETAINED by the British authorities at Penang and 71 drums of the caustic soda were REMOVED.
5. Defendant Teodoro Yangco REFUSED to accept the delivery because:
a) Refused to accept the remaining 9 drums of soda were in bad order
b) Refused the optional offer of the petitioner Behn, Meyer & Co. (Ltd.)
Optional offer provides that defendant Yangco has the option of:
i. Waiting for the remainder of the shipment until its arrival OR
ii. Accept the substitution of 71 drums of caustic soda of SIMILAR grade from petitioner Behn, Meyer & Co.’s
stock.
6. Petitioner Behn, Meyer & Co. sold 80 drums of caustic soda for the account of the defendant Yangco.
Realized sum of sale: P6,352.89
Selling price: P10,063.86
Selling price – Realized sum = Amount claimed as damages by the defendant Yangco for the BREACH OF CONTRACT.
7. Argument of Petitioner Company:
Defendant should be the absolute owner of the specific soda confiscated at Penang. Thus, the defendants would have been
indebted for the contract price of the same.
8. The trial court ruled in favor of defendant Yangco.
Issue/Held:
1. Main Issue: Is the place of delivery in New York?
No. The place of deliver was in Manila.
2. Whether the petitioner Behn, Meyer & Co. (“Company”) were able to prove performance on its part of the conditions
provided in the contract?
No. The petitioner Company failed to prove that it complied with the warranty.
Decision: Trial Court decision is AFFIRMED. Costs vs. Behn, Meyer & Co. (Ltd.)
Ruling:
Issue 1: The place of delivery was in Manila and not in New York
5. Note: The use of C.I.F and F.O.B merely make rules of PRESUMPTION. Thus, one may still give proof to a contrary intention
The INTENT (to be ascertained by all the circumstances) should be considered.
Example:
The court ruled that a sale was complete on shipment, though the contract was for goods, "F.O.B. Manila," the
place of destination the other terms of the contract showing the intention to transfer the property
1. Defendants are the partnership Litton & Co, and George Litton. They sell office supplies from the United States.
2. The defendants were contracted to supply (1) Padlocks and (2) office supplies for the upcoming April 23, 1946 elections.
3. They were tasked to deliver all of the above by April 8.
4. Their contract with the Republic included a stipulation that “The stipulated delivery period shall not be exceeded.”
5. The items were insured by Central Surety Co with bonds.
6. The defendants notified the Republic through mail that it is “understood that… [the government] will give a letter
certifying that the padlocks are urgently needed and that the export license can be secured without delay.”
7. The defendants did not deliver everything on time.
8. The defendants asked for an extension which was granted, but nevertheless, they still failed to deliver the items on time.
9. The Republic was forced to buy the remaining equipment from another supplier at a higher cost because they still lacked
some supplies for the elections. It is now filing a case of damages against the defendants for their failure to deliver the
goods on time for the elections.
10. The defendants claim they are not liable because it was necessary for the republic to furnish the “export license” in order to
quicken the delivery of the items to meet the date.
Issue: Was it a condition precedent for the Republic to first provide the “export license” before the defendants could meet the strict
deadline they had agreed upon?
Held: No, the intent of the contract, was to furnish the demanded supplies before the elections, regardless if there was an export
license or not (which was strictly provided for in the contract’s stipulation [fact #4])
Decision: The petition is granted.
Ruling:
1. The contract has a section called “Important Conditions,” which carries the stipulation that “The stipulated delivery period
shall not be exceeded.” This makes defendants liable in all eventualities.
2. The letter wrote by the defendants only shows that they merely expected the Republic to give a certification. It was never
considered a condition precedent.
3. Although the Republic granted some effort in granting the U.S. authorities of the necessary export license and shipping
space, it cannot be considered as an obligation on the part of the Republic.
87. Carrascoso, Jr. vs. Court of Appeals (Garsha) –really long case. Sorry
Dec. 14, 2005 – Carpio-Morales, J. * Carrascoso failed to pay full purchase price when it sold a portion of property
to PLDT (discussion of conditional contract of sale, contract to sell, contract of sale)
Facts:
1. El Dorado Plantation was the registered owner of a parcel of land (with TCT No. 93) in Occidental Mindoro
2. El Dorado’s Board of Directors (BOD) passed a RESOLUTION authorizing its president Feliciano Leviste to negotiate the SALE
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of the PROPERTY and SIGN all documents and contracts.
3. El Dorado (via Leviste) SOLD the property to petitioner Carrascoso.
ª Provisions of the Deed of Sale provided that petitioner Carrascoso should pay the FULL purchase price on March
23, 1975
ª Leviste assured that there are NO TENANTS in the said property and it does not apply to Land Reform Code.
4. (Impt!) El Dorado’s Board of Directors (BOD) passed a Resolution
ª This states that El Dorado interposes NO OBJECTION to the property being mortgage by petitioner Carrascoso to
any bank AS LONG AS THE BALANCE on the Deed of Sale shall be recognized by the petitioner (he will pay for the
balance due on the property sold)
5. Carrascoso and his wife executed a Real Estate Mortgage over the property (sold by El Dorado) in favor of Home Savings
Bank to secure a loan of P 1m
6. Petitioner Carrascoso failed to pay the full purchase price by March 23, 1975 (See #3)
7. Petitioner Carrascoso executed an Agreement to Buy and Sell (Buy and Sell Contract) with PLDT to sell 1,000 hectares of
petitioner’s property for P 3m.
ª Agreement to Buy and Sell was NOT registered and annotated in the TCT No. T-6055 of petitioner Carasscoso.
ª Carrascoso was asked to relocate the “tenants”/squatters in the said property
8. Lauro, BOD member of El Dorado, told the Board that petitioner Carrascoso failed to pay P 1.3 m for the property
9. Leviste, president of El Dorado, sent a Letter to petitioner Carrascoso
ª Inform him of his failure to pay the balance of the purchase price
ª El Dorado was seeking to RESCIND the Deed of Sale of Real Property with petitioner Carrascoso.
10. Lauro and El Dorado filed a complaint for RESCISION with Damages before CFI-Occidental Mindoro
11. Petitioner Carrascoso and PLDT forged a Deed of Absolute Sale
ª After PLDT gained possession of the land, it conveyed the 1, 000 hectare portion of its property to PLDT Agricultural
Corporation (PLDTAC)
12. When El Dorado filed a civil case against Carrascoso, PLDT intervened averring that it was a buyer in good faith.
13. Decision of RTC:
ª Decided in favor of Carrascoso
ª Dismissed complaint because it was PREMATURE
14. Decision of CA:
ª Reversed the decision of RTC
ª Ordered Petitioner Carrascoso return the possession of portion of land + net fruits of land to El Dorado
ª Ordered PLDTAC to return 1000 hectrate farm to El Dorado
15.
Issue:
1. Main issue: Whether the argument of Carrascoso that there was a breach of warranty of non-tenancy committed by El
Dorado (where, as a result, he incurred expenses of P 2, 890, 000 for which he should be reimbursed and that his unpaid
obligation to El Dorado worth P 1, 300,000 should be deducted there from) is tenable?
2. What is the nature of the contract between El Dorado and Carrascoso?
3. WON the Agreement to Buy and Sell between PLDT and petitioner Carrascoso is a CONDITIONAL contract of sale?
4. WON the period for Petitioner Carrascoso to fully pay purchase price was suspended because of El Dorado’s non-objection
to mortgage the property?
Held:
1. The contract is a contract of SALE which is a reciprocal obligation. Failure to pay the price entitles the unpaid seller (El
Dorado) the right to sue for the collection of payment OR rescission of contract
2. No, The contract between petitioner Carrascoso and PLDT is a contract to SELL.
3. No, even if El Dorado did not object to the mortgage of the property does not mean that the period for petitioner
Carrascoso to pay purchase price was suspended.
5. Decision of SC: (The SC only provided the requisites of express trust. Since warranty was not a major topic in this case… I
got this from the “Notes” part of the decision)
Where the complaint is one for DAMAGES arising from a BREACH of a written contract and NOT a suit to enforce
warranties against hidden effects, the governing law is Art. 1715 of the Civil Code.
Art. 1715. The contract shall execute the work in such a manner that it has the qualities agreed upon and
has no defects which destroy or lessen its value or fitness for its ordinary or stipulated use. Should the
work be not of such quality, the employer may require that the contractor remove the defect or execute
another work. If the contract fails or refuses to comply with this obligation, the employer may have the
defect removed or another work executed, at the contractor's cost.
BUT, since Art. 1715 of the Civil Code does not provide a specific prescriptive period, the general law on
prescription, Art. 1144 will apply.
Art. 1144. The following actions must be brought within ten years from the time the right of action
accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
On the issue that the contract involved between El Dorado and Petitioner Carrasocoso is a Contract of Sale which implies
reciprocal obligation for both buyer and seller
1. The contract is a contract of SALE which is a reciprocal obligation. Failure to pay the price entitles the unpaid seller (El
Dorado) the right to sue for the collection of payment OR rescission of contract
2. It was perfected by their meeting of the minds and was consummated by the delivery of the property to Carrascoso.
However, El Dorado has the right to rescind the contract by reason of Carrascoso’s failure to perform his obligation.
3. The seller obligates itself to transfer the ownership of and deliver a determinate thing, and the buyer obligates itself to paa
price certain in money or its equivalent.
4. The non-payment of the price by the buyer is a resolutory condition which extinguishes the transaction that for a time
existed, and discharges the obligations created.
ª Such failure to pay the price in the manner prescribed by the contract of sale entitles the unpaid seller to sue for
collection or to rescind the contract.
On the issue that the contract between PLDT and petitioner Carrascoso is a contract to sell
1. This is evidenced by the terms and conditions that they have agreed upon that after fulfillment of Carrascoso’s obligation
PLDT has “to notify Carrascoso of its decision whether or not to finalize the sale.”
2. Agreement to Sell between PLDT and Carrascoso is merely a PREPARATORY contract in the nature of a contract to sell.
3. It is a contract to sell because, the parties had to stuipulate in the Agreement to Buy and Sell that Carrascoso shall not sell,
cede, assign and/or transfer the parcel of land which is a typical characteristic of a contract to sell.
On the issue that even if El Dorado did not object to the mortgage of the property does not mean that the period for petitioner
Other issues:
On the issue the El Dorado was not given notice of the Agreement to Buy and Sell between the Carasscoso and PLDT:
ª There is inadequate proof to affirm the argument of Carrascoso that he notified the members of the Board (El
Dorado) about his intention to sell 1,000 hectare of property to PLDT.
Concept:
Difference between a Contract of Sale and Contract to Sell:
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