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岷倫洛區 筆記 SALES AND LEASE – ATTY. BUSMENTE

Title

CASE/PROVISION/DOCTRINE PARTIES/FACTS ISSUE/HELD


1. The Dignos spouses were owners of a parcel of
land of the cadastral survey of Opon, Lapu-Lapu City.
2. Sold the said parcel of land to Atilano J. Jabil for
the sum of P28,000.00, payable in two installments
ISSUE: Whether or not subject contract is a deed of absolute
- deed of sale executed in favor of plaintiff-appellant
sale or a contract Lot sell.
3. The Dignos spouses sold the same land in favor
DIGNOS VS. CA
of defendants spouses, Luciano Cabigas and Jovita
ARTICLE 1477 L. De Cabigas, who were then U.S. citizens, for the HELD: The contract in question is a Deed of Sale, with the
price of P35,000.00. following conditions (refer to 1st par of this digest)
4. A deed of absolute sale was executed by the
Dignos spouses in favor of the Cabigas spouses -A deed of sale is absolute in nature although denominated as
-All the elements of a valid
5. As the Dignos spouses refused to accept from Jabil a "Deed of Conditional Sale" where nowhere in the contract in
contract of sale under Article
the balance of the purchase price of the land, and as question is a proviso or stipulation to the effect that title to the
1458 of the Civil Code, are
Jabil discovered the second sale made by Dignos to the property sold is reserved in the vendor until full payment of the
present:
Cabigas spouses, which lead him to file this brought the purchase price, nor is there a stipulation giving the vendor the right
present suit. to unilaterally rescind the contract the moment the vendee fails to
(1) consent or meeting of 6. After due trial, the CFI declared the deed of sale in pay within a fixed period
the minds; favor of Cabigas as void ab initio
(2) determinate subject 7. Jabil is ordered to reimburse the defendants
matter; and -A careful examination of the contract shows that there is no
Cabigas, reasonable amount correspo nding to the
(3) price certain in money such stipulation reserving the title of the property on the
expenses or costs of the hollow block fence, so far
or its equivalent. vendors nor does it give them the right to unilaterally rescind
constructed.
the contract upon non-payment of the balance thereof within a
fixed period.
-Article 1477 provides that "The PETITOINER CONTENTION: Deed of Sale is a mere
ownership of the thing sold shall be contract to sell and not an absolute sale; that the same
transferred to the vendee upon -There was actual delivery in this case: the Dignos spouses
is subject to two (2) positive suspensive conditions,
actual or constructive delivery delivered the possession of the land in question to Jabil so that the
namely: the payment of the balance of P4,000.00 and
thereof." In the absence of latter constructed thereon Sally's Beach Resort also known as
the immediate assumption of the mortgage of
stipulation to the contrary, the Jabil's Beach Resort; Mactan White Beach Resort and Bevirlyn's
P12,000.00 with the First Insular Bank of Cebu.
ownership of the thing sold passes Beach Resort
to the vendee upon actual or
-In said contract, title or ownership over the property
constructive delivery thereof. Be that as it may, it is evident that when petitioners sold said
was expressly reserved in the vendor, the Dignos
land to the Cabigas spouses, they were no longer owners of
spouses until the suspensive condition of full and
the same and the sale is null and void.
punctual payment of the balance of the purchase
price shall have been met. So that there is no actual
sale until full payment is made
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岷倫洛區 筆記 SALES AND LEASE – ATTY. BUSMENTE

TAN V. BENORILAO ISSUE: WON THERE IS A CONTRACT OF SALE


1. Benorilao were co-owners of a parcel of land in NO. IT IS MERELY A CONTRACT TO SELL
ARTICLE 1458
Tagaytay, the co-owners executed a Deed of -In the present case, the true nature of the contract is revealed by
Conditional Sale over the property in favor of Tan for paragraph D of the contract thereof, which states:
Art. 1458. By the contract of sale P1.3M wherein delivered a heck worth P200K That in case, BUYER has complied with the terms and conditions
one of the contracting parties
2. Lamberto Benorilao died intestate  new COT over of this contract, then the SELLERS shall execute and deliver to the
obligates himself to transfer the
property was issued. BUYER the appropriate Deed of Absolute Sale
ownership and to deliver a
determinate thing, and the other to Sec 4, Rule 74 of the Rules the ff annotation was made -Jurisprudence has established that where the seller promises to
pay therefor a price certain in to the TCT: execute a deed of absolute sale upon the completion by the buyer
money or its equivalent. -any liability to creditors, excluded heirs and other of the payment of the price, the contract is only a contract to sell.
A contract of sale may be absolute persons having right to the property for a period of 2 Thus, while the contract is denominated as a Deed of Conditional
or conditional. years with respect only to the share of Erlinda, Andrew Sale, the presence of the above-quoted provision identifies the
Romano and Dion Benolirao. contract as being a mere contract to sell.
3. As stated in the Deed of Conditional Sale, Tan had
-The very essence of a contract of
until March 15 to pay balance. WON TAN IS ENTITLED FOR REIMBURSEMENT OF HIS
sale is the transfer of ownership
in exchange for a price paid or --Failed after 2 extensions. Demanded payment thru DOWNPAYMENT
promised letter (5 days) otherwise, conditional sale rescinded and
be forfeited of his downpayment based on contract YES. because a contract to sell is not rescinded but terminated
-In contrast, a contract to sell is
defined as a bilateral contract 4. Tan refused to comply, pursuant to Section 4, Rule -the remedy of rescission under Article 1191 cannot apply to mere
whereby the prospective seller, 74, annotation on the title constituted an encumbrance contracts to sell.
while expressly reserving the on the property that would prevent vendors from
ownership of the property despite delivering a clean title to him
delivery thereof to the prospective  alleged that he could no longer be required to pay In a contract to sell, title remains with the vendor and does
buyer, binds himself to sell the the balance of purchase price and demanded return of not pass on to the vendee until the purchase price is paid in
property exclusively to the downpayment full. Thus, in a contract to sell, the payment of the purchase price is
prospective buyer upon fulfillment of a positive suspensive condition.
5. Tan filed a case: there was a novation of the deed of
the condition agreed, i.e., full sale done without his consent since the annotation on Failure to pay the price agreed upon is not a mere breach,
payment of the purchase price. the title created an encumbrance over property. casual or serious, but a situation that prevents the obligation
of the vendor to convey title from acquiring an obligatory
 Prayed for refund of downpayment and rescission of force. In a contract to sell, however, the vendor remains the
A contract to sell may not even be contract owner for as long as the vendee has not complied fully with
considered as a conditional contract 6. Tan caused annotation on the title of a notice of lis the condition of paying the purchase price. If the vendor
of sale where the seller may pedens. should eject the vendee for failure to meet the condition
likewise reserve title to the property precedent, he is enforcing the contract and not rescinding it. .
subject of the sale until the  Respondents executed a DAS over property in favor
of Hector De Guzman for 689K . . Article 1592 speaks of non-payment of the purchase price as a
fulfillment of a suspensive condition,
resolutory condition. It does not apply to a contract to sell (Santos
because in a conditional contract of 7. De Guzman registered property and TCT was issued
v. Court of Appeals)
sale, the first element of consent is in his name
present, although it is conditioned 8. Tan filed motion to carry over lispedens annotation to
upon the happening of a contingent TCT registered in the name of de Guzman. RTC Contract to sell was terminated when the vendors could no
event which may or may not occur. DENIED longer legally compel Tan to pay balance of purchase price as
a result of the legal encumbrance which attended to the title of
the property. Since Tan’s refusal to pay was due to the
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岷倫洛區 筆記 SALES AND LEASE – ATTY. BUSMENTE

9. RTC ruled in favor of respondents: forfeiture of Tan’s supervening event of a legal encumbrance on the property
downpayment was proper in accordance with terms and negligence, we find and so hold that the forfeiture of Tan's
conditions of contract down payment was clearly unwarranted
CA affirmed
ISSUE: WON PUBLIC SALE IS VALID

1. SEPT. 1952 Proper land authorities issued in favor HELD: NO. Under Sec. 118 of the Public Land Law (Com. Act
of herein appellant Lino Artates and Manuela Pojas 141)
ARTATES V. URBI (spouses Artates) a homestead duly registered in
their names -This provision has been held as mandatory; a sale made in
A provision against the alienation or violation thereof is null and void and produces no effect
encumbrance of public lands 2. Lino Artates inflicted injuries upon herein whatsoever.
granted with in five years from the defendant Daniel Urbi who then filed Civil Case
against the former. Though it may be a limitation on the right of ownership of the
issuance of the patent, it has been
grantee, the salutary purpose of the provision cannot be denied: it
held, is mandatory; a sale made in 3. Court of the CFI awarded damages in favor of Urbi is to preserve and keep for the homesteader or his family the land
violation thereof is null and void and in the amount of P1,476.35 given to him gratuitously by the State so that being a property
produces no effect whatsoever. 4. so in June 1962, the Provincial Sheriff of Cagayan owner, he may become and remain a contented and useful
made a public sale of the homestead to satisfy the member of our society.
Under Sec. 118 of the Public Land said judgment. This is true eve if the sale involved is not voluntary. For purposes of
Law (Com. Act 141), such 5. The spouses Artates alleged that the sale of the complying with the law, it is immaterial that the satisfaction of the
homestead, generally cannot be homestead to satisfy Artates’ indebtedness violated debt by the encumbrancing or alientation of the land grant was
sold, cannot be encumbered, and the the Public Land Law exempting said property made voluntarily an is the case of ordinary sale, or involuntarily,
cannot be held liable for the from execution for any debt contracted within 5 such as that effected through levy on the property and consequent
satisfaction “of any debt years from the date of the issuance of the patent, sale at public auction. In both instances, the spirit of the law
CONTRACTED” prior to the and that Urbi executed a deed of sale of the same would have been violated.
expiration of the period of five parcel of land in June 1961 for the sum of P2,676.35 Considering the protective policy of the law, it becomes apparent
years from and after the date of to herein defendant Crisanto Soliven, who was a that "debt contracted" was used in it in the sense of "obligation
the issuance of the patent or minor, to defraud them. incurred," since Webster gives the verb to "contract" the meaning of
grant. 6. CFI upheld the execution made by the Provincial "to bring on; incur; acquire ; thus, applicable to both contractual and
Sheriff upon the homestead, and at declared null extra contractual debts considering the protective policy of the law.
and void the sale of the land between Urbi and The execution sale in this case being null and void, the possession
Soliven. of the land should be returned to the owners, the herein appellants.
There would even be no need order appellee Urbi to execute a
deed of reconveyance thereof of to the owners

HEIRS OF ENRIQUE ZAMBALES 1. The Zambales spouses were the homestead Issue: Whether or not the sale of the land to Preysler is valid
vs. CA patentees of a parcel of land situated in the
Municipality of Del Pilar, Roxas, Palawan. Held: No. The sale of the land to Preysler is not valid.
ART 1459 - The Court finds that the Zambaleses were not misled into
2. They claimed that Nin Bay Mining Corporation had
removed silica sand from their land and destroyed the signing the Compromise Agreement, but they hold that there
SALE WITHIN THE PROHIBITORY plants and others improvements thereon. has been a violation of the Public Land Act.
PERIOD, ILLEGAL AND VOID. — 3. Zambaleses filed a civil case before the CFI of -The land in question was awarded to the Zambaleses as a
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岷倫洛區 筆記 SALES AND LEASE – ATTY. BUSMENTE

The sale of a homestead lot within Palawan claiming damages. Nin Bay denied having homestead on September 6, 1955
the five-year prohibitory period is caused damage to the Zamabaleses’ land. -The Compromise Agreement executed on October 29, 1959 is in
illegal and void. The law does not 4. On October 29, 1959, the Zambaleses, duly assisted violation of the Public Land Act
distinguish between executory and by their counsel and the Corporation, entered into a
consummated sales. The bilateral -The sale of a homestead lot within the five-year prohibitory
Compromise Agreement. period is illegal and void. The law does not distinguish
promise to buy and sell the
- (1) Nin Bay shall pay the Zambaleses a total rental between executory and consummated sales.
homestead lot at a price certain,
price in lieu of damages; (2) the Zambaleses bind -The bilateral promise to buy and sell the homestead lot at a price
which was reciprocally demandable
(Article 1479. Civil Code), was themselves to sell, transfer and convey their land to certain, which was reciprocaly demandable, was entered into within
Nin Bay, and the latter shall pay for the land at a fixed the 5-year prohibitory period and is therefore, illegal and void.
entered into within the five-year
prohibitory period and is therefore, selling price of P500 per hectare; and with that the Further, the agency to sell the homestead lot to a third party was
Zambaleses release Nin Bay from all liabilities. coupled with an interest in as much as bilateral contract was
illegal and void.
5. On September 10, 1960, Nin Bay Mining dependent on it and was not revocable at will by any of the parties.
Corporation, as attorney-in-fact for the Zambaleses (as -To all intents and purposes, therefore, there was an actual
Vendors) sold the disputed property to Joaquin B. executory sale perfected during the period of prohibition
Preysler. TCT was issued in the vendee's name on except that it was reciprocally demandable thereafter and the
December 19, 1960. The Secretary of Agriculture agency to sell to any third party was deferred until after the
and Natural Resources approved the sale to expiration of the prohibitory period. That "rentals" were
Preysler of the subject property. ostensibly to be paid during the five-year prohibitory period, and the
6. decision on the CA  10 yrs, and sale  9 yrs, the agency to sell made effective only after the lapse of the said period,
Zambaleses filed a civil case for "Annulment of a was merely a devise to circumvent the prohibition.
Deed of Sale with Recovery of Possession and - As the contract is void from the beginning, for being expressly
Ownership with Damages". prohibited by law the action for the declaration of its inexistence
7. The Zambaleses: unschooled and not aware of the does not prescribe. Being absolutely void, it is entitled to no
contents of the compromise agreement, and their land authority or respect, the sale may be impeached in a collateral
was acquired and registered through fraud and proceeding by any one with whose rights and interest it conflicts.
deceit. Nin Bay: contents were read to the
Zambaleses.
RTC in favor of the Zamabaleses.
CA reversed after finding that the alleged fraud or
misrepresentation was not substantiated by
evidence.

QUIROGA VS PARSONS 1. On 24 Janaury 1911, Andres Quiroga and Parsons Issue: Whether or not Parsons, by reason of the contract was
ARTICLE 1466 Hardware Co. entered into a contract: the exclusive a purchaser or an agent of Quiroga for the sale of his beds
sale of Quiroga Beds in the Visayan Islands. Held: No. Parsons, by reason of the contract was not a
2. In the contract, Don Andres Quiroga grants the purchaser or an agent of Quiroga for the sale of his beds. But
SALES; INTERPRETATION OF
exclusive right to sell his beds in the Visayan the contract by and between Parsons and Quiroga is one of
CONTRACT. — For the
Islands to J. Parsons under certain conditions. purchase and sale.
classification of contracts, due
regard must be paid to their -- Quiroga shall furnish beds of his manufacture to -In order to classify a contract, due regard must be given to its
essential clauses. Only the acts of Mr. Parsons for the latter's establishment in Iloilo, essential clauses. In the contract in question, what was essential,
the contracting parties, subsequent and shall invoice them at the same price he has as constituting its cause and subject matter, is that Quiroga was to
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岷倫洛區 筆記 SALES AND LEASE – ATTY. BUSMENTE

to and in connection with, the fixed for sales, in Manila, and, in the invoices, shall furnish the defendant with the beds which the latter might order, at
performance of the contract must be make an allowance of a discount of 25 per cent of the price stipulated) and that Parsons was to pay the price in the
considered in the interpretation of the invoiced prices, as commission on the sales; manner stipulated.
the contract when such and Mr. Parsons shall order the beds by the dozen, -The price agreed upon was the one determined by Quiroga for
interpretation is necessary, but not whether of the same or of different styles. the sale of these beds in Manila, with a discount of from 20 to
when, as in the instant case its 3. Quiroga filed a case against Parsons alleging that 25 per cent, according to their class. Payment was to be made
essential agreements are clearly set the latter violated the following obligations stated in at the end of sixty days, or before, at the Quiroga's request, or in
forth and plainly show that the the conditions: not to sell the beds at higher prices cash, if the defendant so preferred, and in these last two cases an
contract belongs to a certain kind than those of the invoices; to have an open additional discount was to be allowed for prompt payment. These
and not to another. establishment in Iloilo; itself to conduct the agency; to are precisely the essential features of a contract of purchase
keep the beds on public exhibition, and to pay for the and sale.
advertisement expenses for the same; and to order the -There was the obligation on the part of the plaintiff to supply
beds by the dozen and in no other manner. the beds, and, on the part of the defendant, to pay their price.
4. With the exception of the obligation on the part of These features exclude the legal conception of an agency or order
Parsons to order the beds by the dozen and in no other to sell whereby the mandatory or agent received the thing to sell it,
manner, none of the obligations imputed to Parsons in and does not pay its price, but delivers to the principal the price he
the causes of action are expressly set forth in the obtains from the sale of the thing to a third person, and if he does
contract. not succeed in selling it, he returns it. By virtue of the contract
5. But Quiroga alleged that Parsons was his agent for between the plaintiff and the defendant, the latter, on receiving the
the sale of his beds in Iloilo, and that said obligations beds, was necessarily obliged to pay their price within the term
are implied in a contract of commercial agency. fixed, without any other consideration and regardless as to whether
he had or had not sold the beds.
-In respect to the defendant's obligation to order by the dozen, the
only one expressly imposed by the contract, the effect of its breach
would only entitle the plaintiff to disregard the orders which the
defendant might place under other conditions; but if the plaintiff
consents to fill them, he waives his right and cannot complain for
having acted thus at his own free will.
-For the foregoing reasons, the Court is of opinion that the contract
by and between Quiroga and Parsons was one of purchase and
sale, and that the obligations the breach of which is alleged as a
cause of action are not imposed upon Parsons, either by
agreement or by law.

CONCRETE AGGREGATES INC CTA reviewed the accounts of Concrete Aggregates ISSUE:
VS. CTA and orders them to pay for sales and ad valorem taxes
WON the petitioner is a contractor subject to the 3%
for being a manufacturer. Petitioner contends that it is
contractor's tax under Section 191 of the 1968 National Internal
not a manufacturer but a contractor who undertakes its
In a contract of sale, the article is Revenue Code or a manufacturer subject to the 7% sales tax under
business by furnishing its customers with asphalt or
already substantially in existence at Section 186 of the same Code.
concrete.
the time of the order and merely
requires some alteration, 1. After conducting an investigation on the tax liabilities
of Concrete Aggregates, CTA issued a resolution: HELD:
modification or adaptation to the
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岷倫洛區 筆記 SALES AND LEASE – ATTY. BUSMENTE

buyer's wishes or purposes. A -Concrete Aggregates is a manufacturer subject to the  The Petitioner is a manufacturer as defined in Sec
contract for the sale of an article 7% sales tax 194.
which the vendor in the ordinary 2. Petitioner must pay total amount of P244,022.76 -... who by physical or chemical process alters the exterior texture
course of his business representing sales and ad valorem taxes for the first or form or inner substance of any raw material or manufactured or
manufactures or procures for the semester of 1968 inclusive of surcharges, plus partially manufactured product in such manner as to prepare it for a
general market, whether the same interest at the rate of 14% per centum from January special use or uses to which it could not have been put in its
is on hand at the time or not is a 1, 1973 up to the date of full payment thereof pursuant original condition, or who by any such process alters the
contract for the sale of goods. to Section 183 (now 193) of the National Internal quality of any such raw material ...
Revenue Code. -Petitioner's raw materials are processed under a prescribed
3. Concrete Aggregates is an aggregate plant at formula and changed by means of machinery into a finished
Montalban, Rizal - processes rock aggregates mined by product, altering their quality, transforming them into marketable
it from private lands state or preparing them for any of the specific uses of industry.
-maintains and operates a plant at Longos, Quezon City -The raw materials become a distinct class of merchandise or
for the production of ready-mixed concrete and plant- "finished products for the purpose of their sales or distribution to
mixed hot asphalt others and not for his own use or consumption
4. Respondent assessed and demanded payment from -Petitioner, as a manufacturer, not only manufactures the finished
petitioner articles but also sells or distributes them to others. The sale of a
5. Through a letter, petitioner disputed the said manufactured product is properly incident to manufacture.
assessment without contesting the portion pertaining to -What practically prevents the petitioner from mass production and
the ad valorem tax. storage is the nature of its products, that is, they easily harden due
6. Respondent reiterated the said assessment of sales to temperature change and water and cement reaction.
and ad valorem taxes. Respondent demanded for the -Specialty contractor - one whose operations pertain to construction
payment within ten days from receipt of the letter, work requiring special skill and involves the use of specialized
otherwise the same would be collected thru the building trades or crafts. The manufacture of concrete and cement
summary remedies provided for by law. mix do not involve the foregoing requirements as to put it within
7. Instead of paying, petitioner appealed to such special category.
respondent court. Contractor
CTA- denied the petition for review for lack of merit as -A person who, in the pursuit of the independent business,
well as the motion for reconsideration undertakes to do a specific job or piece of work for other persons,
"Sec. 191. Percentage tax on road, building, using his own means and methods without submitting himself to
irrigation, artesian well, waterworks, and other control as to the petty details.
construction work contractors, proprietors or Test = that he renders service in the course of an independent
operators of dockyards, and others. — Road, occupation, representing the will of his employer only as to the
building, irrigation, artesian well, waterworks, result of his work, and not as to the means by which it is
and other construction work contractors; . . . accomplished."
and other independent contractors, . . . shall -Petitioner was formed and organized primarily as a manufacturer;
pay a taxequivalent to three per that it has an aggregate plant at Montalban, Rizal, which processes
centum of their gross receipts." rock aggregates mixed by it from private lands; it operates
Contentions of the Petitioner a concrete batching plant at Longos, Quezon City.
-Its business falls under "other construction work
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岷倫洛區 筆記 SALES AND LEASE – ATTY. BUSMENTE

contractors" or "other independent contractors" (Sec


191, 1968 Tax Code)
-If the subject of sale is one which is not ready for
delivery, as it is yet to be manufactured according to the
order, the seller thereof is a contractor. However, if the
article subject of the sale is one which is ready for
delivery when the order therefore is placed, the seller is
a manufacturer.
-Its business consists of rendering service by
way of furnishing its customers with pre-
mixed concrete or asphalt – they buy the ingredients
and then mix the concrete or asphalt. Thus, it is not a
manufacturer. It insists that it would produce asphalt
or concrete mix only upon previous job orders
otherwise it would not do so. It does not and will not
carry in stock cement and asphalt mix.

1. On February 1960, People’s Homesite & Housing


Corporation (PHHC) passed a resolution, subject to WON there was a perfected sale of Lot 4, with the reduced area, to
the approval of the Court Court Council of the PHHC’s the Mendozas which they can enforce against the PHHC by an
consolidation subdivision plan, awarding Lot 4 (4 action for specific performance.
something sqm) to Rizalino and Adelaida Mendoza at
PEOPLE’S HOMESITE AND
a price of twenty-one pesos (P21.00) per square meter.
HOUSING CORP VS. CA Held:
2. CCC disapproved the consolidation subdivision plan
initially but approved its revised version where Lot 4 • SC found that there was NO perfected sale of Lot 4 because the
ARTICLE 1475 was reduced to an area of 2,608.7 square meters. said lot was conditionally or contingently awarded to the
Mendozas subject to the approval by the Court council of the
• “The contract of sale is perfected 3. Then, PHHC withdrew the tentative award of Lot 4
proposed consolidation subdivision plan and the approval of the
at the moment there is a meeting to spouses Mendoza for the latter’s failure neither
to pay its price nor to make a 20% initial deposit, award by the valuation committee and higher authorities.
of minds upon the thing which is
the object of the contract and 4. Re-awarded said lot to Miguela Sto. Domingo et al – • When the plan with the area of Lot 4 reduced to 2,608.7 square
upon the price. From that – who made the initial deposit. meters was approved, the spouses should have manifested in
moment, the parties may writing their acceptance of the award for the purchase of Lot
5. The subdivision of Lot 4 into five lots was later
reciprocally demand performance, 4 just to show that they were still interested in its purchase
approved by the Court council and the Bureau of
subject to the law governing the although the area was reduced.
Lands.
form of contracts." (Art. 1475, Civil
6. Spouses Mendoza asked for reconsideration and for • Indeed, there was a no meeting of the minds between the
Code).
the withdrawal of the said 2nd award and at the same parties on the purchase of Lot 4 with an area of 2,608.7
time filed an action for specific performance plus square meters at P21 a square meter and the PHHC board of
damages. directors acted within its rights in withdrawing the tentative
award.
7. Trial court sustained the award but CA reversed the
said decision, declared void the re-awarding, and
ordered the PHHC to sell Lot 4 with an area of
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岷倫洛區 筆記 SALES AND LEASE – ATTY. BUSMENTE

2,608.7 square meters at P21.00 per square meter to


spouses Mendoza.

1. Luna L. Sosa wanted to purchase a Toyota Lite


Ace. ISSUE: WON THE STANDARD VSP WAS THE TRUE AND
2. Contacted Toyota Shaw and was told that there was DOCUMENTED UNDERSTANDING OF THE PARTIES WHICH
an available unit. So, Sosa and son, Gilbert, went to the WOULD HAVE LED TO THE ULTIMATE CONTRACT OF SALE
Toyota office  Popong Bernardo, a sales
representative of Toyota. HELD: No. The said VSP is not a contract of sale.
3. Sosa emphasized to Bernardo that he needed the
Lite Ace (Marinduque trip with balikbayan) It is not a contract of sale. No obligation on the part of Toyota
TOYOTA SHAW INC VS CA 4. Birthday etc. and if he does not arrive in his to transfer ownership of a determinate thing to Sosa and no
1458 hometown with the new car, he would become a correlative obligation on the part of the latter to pay therefor a
"laughing stock." price certain appears therein. The provision on the
Article 1458 of the Civil Code Bernardo assured Sosa that a unit would be ready downpayment of P100,000.00 made no specific reference to a
defines a contract of sale where for pick up at 10:00 a.m. on 17 June 1989. sale of a vehicle. If it was intended for a contract of sale, it
one of the contracting parties could only refer to a sale on installment basis, as the VSP
obligates himself to transfer the 5. Bernardo then signed the Agreements. It was also executed the following day confirmed. But nothing was
ownership of and to deliver a agreed upon by the parties that the balance of the mentioned about the full purchase price and the manner the
determinate thing, and the other purchase price would be paid by credit financing installments were to be paid.
to pay therefor a price certain in through B.A. Finance, and for this Gilbert, on behalf
money or its equivalent. of his father, signed the documents of Toyota and A definite agreement on the manner of payment of the price is
B.A. Finance pertaining to the application for an essential element in the formation of a binding and
A contract of sale may be absolute financing. enforceable contract of sale. This is so because the
or conditional, and Article 1475 6. The next day, Sosa and Gilbert went to Toyota to agreement as to the manner of payment goes into the price
specifically provides when it is deliver the downpayment of P100,000.00. They met such that a disagreement on the manner of payment is
deemed perfected at the moment Bernardo who then accomplished a printed Vehicle tantamount to a failure to agree on the price. Definiteness as
there is a meeting of minds upon Sales Proposal (VSP) No. 928,2 on which Gilbert to the price is an essential element of a binding agreement to
the thing which is the object of signed under the subheading CONFORME. sell personal property.
the contract and upon the price.
From that moment, the parties may CONDITIONS OF SALE
There is no meeting of minds between Toyota and Sosa. For one
reciprocally demand performance, thing, Sosa did not even sign it. For another, Sosa was well aware
subject to the provisions of the law 1. This sale is subject to availability of unit. from its title, written in bold letters, “AGREEMENTS BETWEEN
governing the form of contracts. 2. Stated Price is subject to change without prior notice, MR. SOSA & POPONG BERNARDO OF TOYOTA SHAW, INC” --
Price prevailing and in effect at time of selling will apply. - that he was not dealing with Toyota but with Popong
--Such was approved and checked by VSP Bernardo and that the latter did not misrepresent that he had
the authority to sell any Toyota vehicle. He knew that Bernardo
7. On 17 June 1989, Bernardo called Gilbert: vehicle was only a sales representative of Toyota and hence a mere agent
would not be ready for pick up at 10:00 a.m. but at of the latter. It was incumbent upon Sosa to act with ordinary
2:00 p.m. that same day. At 2:00 p.m., Sosa and prudence and reasonable diligence to know the extent of
Gilbert met Bernardo at the latter's office Bernardo's authority as an agent in respect of contracts to sell
-Lite Ace was being readied for delivery. After Toyota's vehicles.
waiting for about an hour, Bernardo told them that the
9
岷倫洛區 筆記 SALES AND LEASE – ATTY. BUSMENTE

car could not be delivered because "nasulot ang unit ng


ibang malakas." At the most, the contract may be considered as part of the initial
8. Toyota: Lite Ace was not delivered because of phase of the generation or negotiation stage of a contract of
the disapproval by B.A. Finance of the credit sale. The second phase of the generation or negotiation stage
financing application of Sosa. in this case was the execution of the VSP. It must be
-A particular unit had already been reserved for emphasized that thereunder, the downpayment of the purchase
Sosa but could not be released due to the price was P53,148.00 while the balance to be paid on installment
uncertainty of payment of the balance of the should be financed by B.A. Finance Corporation. It is, of course, to
purchase price. Toyota then gave Sosa the option to be assumed that B.A. Finance Corp. was acceptable to Toyota,
purchase the unit by paying the full purchase price in otherwise it should not have mentioned B.A. Finance in the VSP.
cash but Sosa refused.
The VSP was a mere proposal which was aborted in lieu of
9. After it became clear that the Lite Ace would not subsequent events. It follows that the VSP created no demandable
be delivered to him, Sosa asked that his right in favor of Sosa for the delivery of the vehicle to him, and its
downpayment be refunded. Toyota did so on the very non-delivery did not cause any legally indemnifiable injury.
same day by issuing a Far East Bank check for the full
amount of P100,000.00,

SAMPAGUITA PICTURES VS. 1. Sampaguita- owner of Sampaguita Pictures Issue: WON Sampaguita is the owner of the glass and wooden
JALWINDOR MANUFACTURERS Building. The roofdeck of the building and all jalousies and WON said items were illegally levied upon
INC existing improvements thereon were leased by
Sampaguita to Capitol "300" Inc. and it was agreed,
-When the glass and wooden Held: YES, YES
among other things, that the premises shall be used by
jalousies in question were delivered  Capitol entered into a lease contract with Sampaguita in
said club for social purposes exclusively for its
and installed in the leased 1964, and the latter became the owner of the items in
members and guests; that all permanent improvements
premises, Capitol became the question by virtue of the agreement in said contract .
made by the lessee on the leased premises shall
owner thereof. Ownership is not When levy or said items was made on July 31, 1965,
belong to the lessor without any obligation on the part
transferred by perfection of the Capitol, the judgment debtor, was no longer the owner
contract but by delivery, either of the lessor to reimburse the lessee for the sum spent
for said improvements. thereof.
actual or constructive. This is true
2. Capitol "300" purchased on credit from defendant-  The items in question were illegally levied upon since they
even if the purchase has been
appellee Jalwindor Manufacturers, Inc. glass and do not belong to the judgment debtor. The power of the
made on credit, as in the case at
wooden jalousies which were delivered and installed Court in execution of judgment extends only to
bar. Payment of the purchase
in the leased premises . properties unquestionably belonging to the judgment
price is not essential to the
debtor. The fact that Capitol failed to pay Jalwindor
transfer of ownership as long as 3. Jalwindor filed with CFI an action for collection of a the purchase price of the items levied upon did not
the property sold has been sum of money against Capitol for its failure to pay prevent the transfer of ownership to Capitol.
delivered. Ownership is acquired its purchases.  The complaint of Sampaguita to nullify the Sheriff's sale is
from the moment the thing sold
4. The parties submitted to the trial court a well-founded, and should prosper. Execution sales affect
was delivered to vendee, as when Compromise Agreement wherein Capitol the rights of judgment debtor only, and the purchaser in
it is placed in his control and
acknowledged its indebtedness to Jalwindor in the the auction sale acquires only the right as the debtor has
possession. (Arts. 1477, 1496 and
amount of P9,531.09 at the time of sale. Since the items already belong to
1497, Civil Code of the Phil.)
5. Capitol "300" was not able to pay rentals to Sampaguita and not to Capitol, the judgment debtor, the
Sampaguita levy and auction sale are, accordingly, null and void.
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岷倫洛區 筆記 SALES AND LEASE – ATTY. BUSMENTE

6. Sampaguita filed a complaint for ejectment and


for collection of a sum of money against Capitol
which the CFI granted. Capitol likewise failed to honor
the terms of the Compromise Agreement, and on July
31, 1965, the Sheriff of Quezon City made levy on the
glass and wooden jalousies in question.
6. Sampaguita filed a third-party claim alleging that it
is the owner of said materials and not Capitol.
Jalwindor, however, filed an indemnity bond in favor
of the Sheriff and the items were sold at public auction
on August 30, 1965 with Jalwindor as the highest
bidder for P6,000.00.
7. Sampaguita filed a case against Jalwindor in
order to invalidate the execution sale but was
denied, a motion for reconsideration which was
likewise denied, hence, the instant appeal

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