Parañaque Kings v.
CA were finally sold to Raymundo, should have likewise
G.R. No. 111538; February 26, 1997
Panganiban, J.
Petitioners: Parañaque Kings Enterprises, Incorporated
Respondents: Court of Appeals, Catalina L. Santos, represented by
her attorney-in-fact, Luz B. Protacio, and David A. Raymundo
Facts:
 Catalina Santos owned eight (8) parcels of land located in
Parañaque. In 1977, Frederick Chua leased the aforementioned
property.
 In 1979, Chua assigned his rights and interest and participation
in the leased property to Lee Ching Bing.
 Lee assigned all his rights and interest to Parañaque Kings
Enterprises (PKE) (note par. 9 of the lease contract1).
 In 1988, Santos sold the eight parcels of land to David
Raymundo (respondent) for P5,000,000, violating par. 9 of the
lease contract.
 In 1989, Santos wrote a letter to PKE informing them of the sale
of the properties to Raymundo.
 PKE’s representative wrote to Santos, requesting her to rectify
the error. She had it reconveyed to her for the same price
(P5,000,000).
 The property was offered for sale by Santos to PKE for
P15,000,000. PKE was given 10 days to accept the offer, but
the period expired.
 Before the period indicated in the letter expired, PKE’s counsel
wrote to Santos’ counsel, offering to buy the parcels of land for
P5,000,000.
 Before they replied to the purchase offer, another deed of sale
was executed by Santos in favor of Raymundo, for P9,000,000,
again violating par. 9 of the contract.
 Santos only replied to PKE’s letter two days after she sold her
properties. She said that the period has elapsed and that PKE is
not privy to the contract.
 PKE’s counsel informed Santos that PKE is the assignee of all the
rights and interest of the former lessor, while Santos informed
PKE that the new owner is Raymundo.
 When the property was still under Santos’ name, her brother,
David, was the collector of rentals. When it was transferred
under Raymundo’s name, David remained to be the collector
for a time.
 PKE built a two-story, six doors commercial building worth
P3,000,000.
 Trial court dismissed PKE’s complaint (annulment of deed of
sale between Santos and Raymundo) for lack of cause of action.
 CA affirmed in toto.
Issue/s:
1. W/N there was a breach of contractual right of “first option or
priority to buy”
Held:
1. Yes, Santos violated PKE’s right of first option to buy.
 In order to have full compliance with the contractual
right granting PKE the first option to purchase, the sale
of the properties for P9,000,000, the price for which they
1
‘9. That in case the properties subject of the lease agreement
are sold or encumbered, Lessors shall impose as a condition
that the buyer or mortgagee thereof shall recognize and be
bound by all the terms and conditions of this lease agreement
been first offered to PKE.
 The basis of the right of first refusal must be the current
offer to sell of the seller or offer to purchase of any
prospective buyer.
 The owner can only sell it to another when the optionee
fails to exercise its right of first priority.
 Bocaling & Co. v. Bonnevie: “…that even if the Bonnevies
could not buy it at the price quoted (P600,000.00),
nonetheless, Reynoso could not sell it to another for a
lower price and under more favorable terms and
conditions without first offering said favorable terms and
price to the Bonnevies as well.”
 Equatorial Realty v. Mayfair Theater: Court upheld the
right of first refusal of the lessee Mayfair, and rescinded
the sale of the property by the lessor Carmelo to
Equatorial Realty “considering that Mayfair, which had
substantial interest over the subject property, was
prejudiced by its sale to Equatorial without Carmelo
conferring to Mayfair every opportunity to negotiate
within the 30­day stipulated period.”
 One of such rights included in the contract of lease and,
therefore, in the assignments of rights was the lessee’s
right of first option or priority to buy the properties
subject of the lease, as provided in paragraph 9 of the
assigned lease contract.
 Raymundo, even if not a part of the contract of lease, is
privy to the contract, being the new owner of the
properties in question.
Dispositive Portion:
“WHEREFORE, the petition is GRANTED. The assailed decisions of the
trial court and Court of Appeals are hereby REVERSED and SET ASIDE.
The case is REMANDED to the Regional Trial Court of Makati for
further proceedings.”
SPS. CIFRA V. COURT OF APPEALS and MANUEL G. YU CHUA
June 3, 1991 | Gancayco, J. |
Doctrine: The literal and clear agreement of the parties shall be
upheld. The stipulations in the agreement are the law between the
parties.
Facts:
● Sps. Cifra entered into an agreement with Yu Chua through their
attorney-in-fact, Catalan. The agreement was denominated as
“EARNEST MONEY” and stated the following:
○ Received from Dr. Manuel G. Yu Chua the cash sum of
P5,000.00 Philippine currency as earnest money for the
house and lot owned by the spouses...
○ If and when the buyer purchases the property according to
the terms and conditions above specified, the herein
earnest money shall form a part of the purchase price
otherwise the same shall be forfeited in favor of the
seller.
● There was also an Addendum to the agreement which stated:
○ In the event that the buyer shall fail to purchase the
property after he is formally notified by the seller of the
surrender of the premises by the present tenant or
and shall respect this Contract of Lease as if they are the
LESSORS thereof and in case of sale, LESSEE shall have the
first option or priority to buy the properties subject of the
lease’
 occupant, in addition to the forfeiture of the earnest
money the buyer binds himself to pay the seller the sum of
P20,000.00 Philippine currency plus the attorney's fees
and other costs for any court case that may arise.
○ On the other hand, if the seller shall not make good his
promise to sell the above property even after the present
tenant, William Lim Valencia, shall have surrendered the
premises the seller binds himself to return the earnest
money and in addition pay the buyer the sum of
P20,000.00 Philippine currency plus the attorney's fees
and other costs of any court case that may arise.
● Six months after the agreement was executed, Catalan
informed Yu Chua’s attorney that the Cifras wanted to rescind
the contract as the extended negotiations for the sale, though
no one’s fault, caused them to miss the opportunity they
wanted to apply the proceeds to.
● Yu Chua insisted on going through with the sale as he had
incurred numerous opportunity costs (ex. A cheaper lot which
is no longer available, etc.) while waiting for the Cifras to make
good on the agreement.
○ He claimed the Ciftras were in bad faith as they had told
him that the tenant, although having previously waived
his right to purchase the land, had offered a better price
for it.
○ The tenant signed an agreement to vacate the premises
90 days after notice of sale and it has been many months.
○ Any undue delay was the fault of the Cifras.
● Yu Chua offered to pay the purchase price minus earnest
money.
● The Cifras refused to go through with the sale, arguing that,
according to the agreement, the balance of the purchase price
was to be paid upon removal of the present tenant and that
the tenant was still occupying the premises, refusing to comply
with his obligation to vacate.
● The Cifras argue that, under the circumstances, it is reasonable
and justified to rescind and that they are prepared to refund the
earnest money.
● Yu Chua filed an action for specific performance.
● RTC ruled in favor of Yu Chua, ordering the Cifras to execute a
deed of absolute sale. CA affirmed.
Issue:
W/N Yu Chua has the right to demand specific performance despite
having signed the addendum which recognized the Cifras’ right to
cancel the agreement by paying liquidated damages
Held:
NO.
● The provisions of Articles 1370 to 1375 of the Civil Code on the
interpretation of contracts are squarely applicable to this case.
● Under the addendum to the same agreement, both parties are
given the freedom to back out of the transaction provided that,
in the case of the seller, he must return the earnest money in
addition to being liable to the buyer for P20,000.00, plus
attorney's fees and other costs in case of litigation.
● This is the literal and clear agreement of the parties. From their
contemporaneous and subsequent acts it also appears that the
proceeds of the sale of the property by petitioners were
intended to apply to a proposed business venture of petitioners
abroad. As said proposed business did not prosper and the
tenants/occupants of the premises have not yet vacated the
premises, petitioners decided to rescind the contract of sale in
accordance with the agreement.
● This right which is afforded to both parties may be availed of
by them, irrespective of whether or not the occupant of the
premises had vacated the same. This stipulation is the law
between the parties.
Dispositive
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals dated December 20, 1989 and its resolution dated January
30, 1990 are hereby REVERSED and SET ASIDE. Another judgment is
hereby rendered dismissing the complaint and rescinding the subject
contract to sell dated December 27, 1985 upon the petitioners
reimbursing to private respondent the P5,000.00 earnest money and
paying them P20,000.00 as damages according to the same
agreement. No costs in this instance.
Notes
Art. 1370. If the terms of a contract are clear and leave no doubt upon
the intention of the contracting parties, the literal meaning of its
stipulations shall control.
If the words appear to be contrary to the evident intention of the
parties, the latter shall prevail over the former.
Art. 1371. In order to judge the intention of the contracting parties,
their contemporaneous and subsequent acts shall be principally
considered.
Art. 1372. However generally the terms of a contract may be, they
shall not be understood to comprehend things that are distinct and
cases that are different from those upon which the parties intended
to agree.
Art. 1373. If some stipulation of any contract should admit of several
meanings, it shall be understood as bearing that import which is most
adequate to render it effectual.
Art. 1374. The various stipulations of a contract shall be interpreted
together, attributing to the doubtful ones that sense which may result
from all of them taken jointly.
Art. 1375. Words which may have different significations shall be
understood in that which is most in keeping with the nature and
object of the contract.
Laforteza v Machuha
June 2000| GONZAGA_REYES, J |
Doctrine: Whenever earnest money is given in a contract of sale, it is
considered as part of the purchase price and proof of the perfection
of the contract
Facts:
● Roberto Laforteza and Gonzalo Laforteza, Jr., in their capacities
as attorneys-in-fact of Dennis Laforteza, entrered into a MOA
(Contract to Sell) with Alonzo Machuca over a house and lot
registered in the name of the late Francisco Laforteza for
630,000 pesos in the following terms:
(a) P30,000.00 as earnest money, to be forfeited in favor of
the defendants if the sale is not effected due to the fault
of the plaintiff;
(b) P600,000.00 upon issuance of the new certificate of title in
the name of the late Francisco Q. Laforteza and upon
execution of an extra-judicial settlement of the decedents
estate with sale in favor of the plaintiff (Par. 2, Exh. "E",
record, pp. 335- 336).
Significantly, the fourth paragraph of the Memorandum of
Agreement (Contract to Sell) dated January 20, 1989 (Exh. "E",
supra.) contained a provision as follows:
 xxx. Upon issuance by the proper Court of the new title,
the BUYER-LESSEE shall be notified in writing and said
BUYER-LESSEE shall have thirty (30) days to produce the
balance of P600,000.00 which shall be paid to the SELLER-
LESSORS upon the execution of the Extrajudicial
Settlement with sale.
● Machuca was able to pay the earnest money but however failed
to pay the balance on time. On October 18, 1989, plaintiff sent
the defendant heirs a letter requesting for an extension of the
THIRTY (30) DAYS deadline up to November 15, 1989.
Defendant Roberto Z. Laforteza signed his conformity. The
extension, however, does not appear to have been approved by
Gonzalo Z. Laforteza, the second attorney-in-fact as his
conformity does not appear to have been secured.
● On November 15, 1989, plaintiff informed the defendant heirs,
through defendant Roberto Z. Laforteza, that he already had the
balance but petitioners refused to accept the balance and told
Machuca that the subject property is no longer for sale.
● Petitioners: contend that the Memorandum of Agreement is
merely a lease agreement with “option to purchase”; hence, it
only gave the respondent a right to purchase the subject
property within a limited period without imposing upon them
any obligation to purchase it. And since the respondent’s tender
of payment was made after the lapse of the option agreement,
his tender did not give rise to the perfection of a contract of
sale.
● The lower court rendered judgment in favor of plaintiff Alonzo
Machuca. CA affirmed.
Issue:
1) WON the tender of payment after the lapse of the option
agreement gave rise to the perfection of a contract of sale. YES
2) whether the failure of the respondent to pay the balance of the
purchase price within the period allowed is fatal to his right to
enforce the agreement? No
Held:
Yes. Memorandum Agreement shows that the transaction between
the petitioners and the respondent was one of sale and lease.
 All the elements of a contract of sale were thus present.
However, the balance of the purchase price was to be paid only
upon the issuance of the new certificate of title in lieu of the
one in the name of the late Francisco Laforteza and upon the
execution of an extrajudicial settlement of his estate. Prior to
the issuance of the "reconstituted" title, the respondent was
already placed in possession of the house and lot as lessee
thereof for six months at a monthly rate P3,500.00
 The six-month period during which the respondent would be in
possession of the property as lessee, was clearly not a period
within which to exercise an option. An option is a contract
granting a privilege to buy or sell within an agreed time and at
a determined price. In the present case, the six-month period
merely delayed the demandability of the contract of sale and
did not determine its perfection for after the expiration of the
six-month period, there was an absolute obligation on the part
of the petitioners and the respondent to comply with the terms
of the sale.
 The parties made a "reasonable estimate" that the
reconstitution of the lost title of the house and lot would take
approximately six months and thus presumed that after six
months, both parties would be able to comply with what was
reciprocally incumbent upon them. The fact that after the
expiration of the six-month period, the respondent would retain
possession of the house and lot without need of paying rentals
for the use therefor, clearly indicated that the parties
contemplated that ownership over the property would already
be transferred by that time.
 The issuance of the new certificate of title in the name of the
late Francisco Laforteza and the execution of an extrajudicial
settlement of his estate was not a condition which determined
the perfection of the contract of sale. Considering however that
the title was eventually "reconstituted" and that the petitioners
admit their ability to execute the extrajudicial settlement of
their fathers estate, the respondent had a right to demand
fulfillment of the petitioners obligation to deliver and transfer
ownership of the house and lot.
(2) the failure of the respondent to pay the balance of the purchase
price was a breach of the contract and was a ground for rescission
thereof. The extension of 30 days was correctly found by the Court
of Appeals to be ineffective inasmuch as the signature of Gonzalo Z.
Laforteza did not appear thereon
 However, the evidence reveals that after the expiration of the
six-month period provided for in the contract, the petitioners
were not ready to comply with what was incumbent upon them,
i.e. the delivery of the reconstituted title of the house and lot.
It was only on September 18, 1989 or nearly eight months after
the execution of the Memorandum of Agreement when the
petitioners informed the respondent that they already had a
copy of the reconstituted title and demanded the payment of
the balance of the purchase price. The respondent could not
therefore be considered in delay for in reciprocal obligations,
neither party incurs in delay if the other party does not comply
or is not ready to comply in a proper manner with what was
incumbent upon him.
Dispositive
ACCORDINGLY, the decision of the Court of Appeals in CA G.R. CV No.
47457 is AFFIRMED and the instant petition is hereby DENIED.
DALION V. CA
February 28, 1990 | MEDIALDEA, J. |
Doctrine: The provision of Art. 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.
Facts:
 A land in Southern Leyte was declared in the name of Segundo
Dalion. Sabesaje sued to recover ownership this land based on
a private document of absolute sale, allegedly executed by
Segundo Dalion. 

 Dalion, however, denied the sale, saying that: 

o The document was fictitious
o His signature was a forgery, and
o That the land is
conjugal property, which he and his wife acquired in 1960
from Saturnina Sabesaje as evidenced by the "Escritura de
Venta Absoluta."
 The spouses denied the claims of Sabesaje that after executing
a deed of sale over the parcel of land, they had pleaded 
with
Sabesaje to be allowed to administer the land because Dalion
did not have livelihood. 

 Spouses Dalion admitted, however, administering 5 parcels of
land in Southern Leyte, which belonged to Leonardo 
Sabesaje,
grandfather of Sabesaje, who died in 1956. 

  The Dalions never received their agreed 10% and 15% Dispositive
commission on the sales of copra and abaca. 
 ACCORDINGLY, the petition is DENIED and the decision of the Court
 Sabesaje's suit, they say, was intended merely to harassand of Appeals upholding the ruling of the trial court is hereby AFFIRMED.
No costs.
forestall Dalion's threat to sue for these unpaid commissions. 

 TC decided in favor of Sabesaje and ordered the Dalions to Secuya v. Vda. De Selma
deliver the parcel of land in a public document. 
 G.R. No. 136021; February 22, 2000
 CA affirmed. 
 Panganiban, J.

Issue: Petitioners: Benigna Secuya, Miguel Secuya, Marcelino Secuya,

 W/N the contract of sale was valid - YES
 W/N a public document is needed for transfer of ownership -
NO
Held:
YES, the contract of sale was valid.
 Forgery was not proved by Dalion
o Merely denied that he signed document
o Did not present any witnesses or other testimony
o His signature was counterchecked with other documents,
which is proved to look the same
o People who witnessed the execution of the deed
positively testified on its authenticity
 Stated that it had been executed and signed by the
signatories. 
 Paciencia Sabellona, parted with one-third of the land in
NO, a public document is not needed for transfer of ownership.
 The provision of NCC 1358 on the necessity of a public
document is only for convenience, not for validity or
enforceability. 
 lost. This was confirmed by Ramon Sabellona, Paciencia’s
 That this be embodied in a public instrument is not a
requirement for the validity of a contract of sale of a parcel of
land 
 “Confirmation of Sale of Undivided Shares.”
 Dalion: 
 o Dalmacio took possession of the land and cultivated it.
o That the sale is invalid because it is embodied in a private
document
o That "acts and contracts which have for their object the
creation, transmission, modification or extinction of real
rights over immovable property must appear in a public
instrument." (NCC 1358 par. 1)
 A contract of sale is a consensual contract, which means that
the sale is perfected by mere consent.
o No particular form is required for its validity.
o Upon perfection of the contract, the parties may
reciprocally demand performance (NCC 1475, NCC), i.e.,
the vendee may compel transfer of ownership of the
object of the sale, and the vendor may require the vendee
to pay the thing sold (NCC 1458).
 The trial court thus rightly and legally ordered Dalion to deliver
to Sabesaje the parcel of land and to execute 
corresponding
formal deed of conveyance in a public document. 
  The trial court dismissed the petition for quieting of title, and
 Under NCC 1498, when the sale is made through a public
instrument, the execution is equivalent to the delivery of the

thing. 
 o Selma’s title can be traced to a valid TCT.
 Delivery may either be actual (real) or constructive. Thus
delivery of a parcel of land may be done by placing the vendee
in control and possession of the land (real) or by embodying the
sale in a public instrument (constructive).
Corazon Secuya, Rufina Secuya, Bernardino Secuya, Natividad Secuya,
Gliceria Secuya and Purita Secuya
Respondents: Gerarda M. Vda. De Selma
Doctrine: While a sale of a piece of land appearing in a private deed
is binding between the parties, it cannot be considered binding on
third persons, if it is not embodied in a public instrument and
recorded in the Registry of Property.
Facts:
 Benigna Secuya, et.al. filed an action for quieting of title before
the RTC, asserting ownership over the disputed parcel of land.
They alleged that:
o The property (Lot 5679) was originally sold to Maxima
Caballero Vda. De Cariño (12,750 sqm).
o Maxima entered into an agreement of partition with
favor of Paciencia. It is stipulated that this portion of the
land will be located adjoining the municipal road.
o Paciencia sold 3,000-sqm portion of the land to Dalmacio
Secuya for P1,850 through a private document that was
only heir (as evidenced by Paciencia’s last will and
testament), as per the instrument denominated
o Rufina Secuya, Dalmacio’s niece, married Edilberto
Superales. Edilberto, with the permission of Dalmacio,
constructed his house on the lot.
o Dalmacio died.
o Gerarda Selma bought a 1,000-sqm portion of Lot 5679.
Eventually, she bought the bigger bulk (9,302sqm). The
3,000-sqm land was included within the boundary of the
portion Selma bought.
o Selma filed a complaint asserting ownership over the land
inherited by the petitioners (Benigna Secuya, et.al.).
 Selma’s version of the facts:
o She is the registered of the 9,302-sqm lot, having bought
it from Cesaria Caballero (evidenced by notarized Deed of
Sale). She has been in possession of the land since then.
o Cesaria was the widow of Silvestre Aro, the owner of the
12,750-sqm lot. Upon his death, his heirs executed an
“Extrajudicial Partition and Deed of Absolute Sale”
wherein one-half plus one-fifth of Lot 5679 was
adjudicated to Cesaria.
ruled in favor of Selma.
 The Court of Appeals affirmed the ruling of the trial court.
o Secuyas anchored their claim on an “Agreement of
Partition”, which is void for violating the Public Land Act
(prohibited the alienation or encumbrance of land
acquired under a free/homestead patent for five years
from issuance).
Issue/s:
1. W/N the ownership of Lot 5679 belongs to Selma (respondent)
Held:
1. Yes,
 The “Agreement of Partition”2 is an express trust, and not
a partition. There was no property to partition and the
parties were not co-owners; it is a trust agreement.
 Maxima held the portion of the land specified as
belonging to Paciencia when the application was
approved and a sale certificate was issued under her
name. She should have transferred the same to the latter,
but she never did. Her heirs sold the land to Silvestre Aro.
 Paciencia and her heirs did not do anything to enforce
their rights over the property. They did not even register
the Agreement with the Registry of Property.
 The property, as part of Land 5679 has been the subject
of several sales transactions.
 Petitioners insist that Paciencia sold the property to
Dalmacio Secuya, the sale being embodied in a private
document. However, this was not presented in court,
allegedly being lost.
 While a sale of a piece of land appearing in a private
deed is binding between the parties, it cannot be
considered binding on third persons, if it is not embodied
in a public instrument and recorded in the Registry of
Property.
 To prove the sale of the property to Dalmacio, the Secuyas
presented Miguel Secuya’s testimony that the deed was
lost, and the Deed confirming the sale executed by Ramon
Sabellona (Paciencia’s heir). However, these are doubtful.
 There is no proof that the Secuyas had exercised their
rights and duties as owners of the property.
 AS TO THE VALIDITY OF SELMA’S TITLE, Secuyas debunk
her title to the disputed property, alleging that she was
aware of their possession of the disputed properties,
hence, she is not a buyer in good faith.
 If Selma knew that petitioners, through Superales and his
family, were actually occupying the disputed lot, we must
stress that the vendor, Cesaria Caballero, assured her that
petitioners were just tenants on the lot. She cannot be
faulted for believing this representation, considering that
petitioners’ claim was not noted in the certificate of the
title covering Lot No. 5679.
 Also, the lot, including the disputed portion, had been the
subject of several sales transactions. The title thereto had
been transferred several times, without any protestation
or complaint from the Secuyas.
2
“AGREEMENT OF PARTITION
“I, MAXIMA CABALLERO, Filipina, of legal age, married to Rafael Cariño,
now residing and with postal address in the Municipality of Dumaguete,
Oriental Negros, depose the ‘following and say:
“1. That I am the applicant of vacant lot No. 5679 of the Talisay-Minglanilla
Estate and the said application has already been indorsed by the District Land
Officer, Talisay, Cebu, for private sale in my favor;
“2. That the said Lot 5679 was formerly registered in the name of Felix Abad
y Caballero and the sale certificate of which has already been cancelled by the
Hon. Secretary of Agriculture and Commerce;
“3. That for and in representation of my brother, Luis Caballero, who is now
the actual occupant of said lot I deem it wise to have the said lot paid by me,
as Luis Caballero has no means o[r] any way to pay the government; “4. That
 Selma’s title is amply supported by clear evidence, while
Secuyas’ claim is barren of proof.
Dispositive Portion:
“WHEREFORE, the Petition is hereby DENIED and the assailed
Decision AFFIRMED. Costs against petitioners.
SO ORDERED.”
RODOLFO SANTOS V. RONALD C. MANALILI as Heir or Representative of
Deceased Defendants NOLI BELEN C. MANALILI and REYNALDO
MANALILI & BOARD OF LIQUIDATORS
November 22, 2005 | Garcia, J. |
Doctrine: A sale of a piece of land appearing in a private deed cannot
be considered binding on third persons if it is not embodied in a public
instrument and recorded in the Registry of Deeds.
Facts:
 Involved in this case is a 4,608 square meter parcel of land which
originally formed part of the Furukawa Plantation situated in
Toril, Davao owned by a Japanese national.
 After the war, the land was turned over to the Ph government
and administered by the National Abaca and Other Fibers Corp.
and thereafter by resp Board of Liquidators (BOL).
 Aug. 6, 1970: Reynaldo Manalili, predecessor-in-interest of
Ronald Manalili, filed with the BOL an application to purchase
the property with his Occupant’s Affidavit attached. The
application was favorably acted upon.
 Manalili declared the land for taxation purposes.
 After the lapse of 9 years, Santos wrote an undated letter to the
BOL protesting Manalili’s application. As a result, a formal
investigation was conducted.
 BOL’s Alien Property Unit came out with a report that Santos was
not actually occupying the lot and that he only hired certain
Abalahin and Lumaad to plant bananas and coconut trees and
maintain a vegetable garden thereon, presumably to establish a
bona fide occupancy over the lot. The dismissal of Santos’
protest and approval of the sale to Manalili was then
recommended.
 Meanwhile, Manalili informed the barrio captain of Santos’
illegal entry into the premises.
 Following Manalili’s compliance with other requirements, the
BOL issued to him the corresponding Deed of Absolute Sale
which was duly approved by the Office of the President.
 Santos filed a complaint for Reconveyance and/or Annulment of
Title against the BOL and the Manalilis.
 TC initially dismissed the complaint. IAC reversed and remanded
the case. SC affirmed the IAC.
as soon as the application is approved by the Director of Lands, Manila, in my
favor, I hereby bind myself to transfer the one-third (1/3) portion of the above
mentioned lot in favor of my aunt, Paciencia Sabellana y Caballero, of legal
age, single, residing and with postal address in Tungkop, Minglanilla, Cebu.
Said portion of one-third (1/3) will be Subdivided after the approval of said
application and the same will be paid by her to the government [for] the
corresponding portion;
“5. That the said portion of one­third (1/3) will be located adjoining the
municipal road; “6. I, Paciencia Sabellana y Caballero, hereby accept and take
the portion herein adjudicated to me by Mrs. Maxima Caballero of Lot No.
5679 Talisay-Minglanilla Estate and will pay the corresponding portion to the
government after the subdivision of the same.
“IN WITNESS WHEREOF, we have hereunto set our hands 12 this 5th day of
January, 1938, at Talisay, Cebu
  After the remand, TC ruled in favor of the Manalilis and the IAC
affirmed.
Issue:
1. W/N the IAC erred in upholding that Manalili has the better right
of possession over the lot in question
2. W/N the IAC erred in declaring that the sale of the lot to Manalili
was not fraudulent and that the petitioner’s protest was duly
investigated.
Held:
1. NO. Preponderant evidence of respondent have sufficiently
established that as early as 1970, Reynaldo Manalili had already
filed an Affidavit of Occupancy with the BOL, the government
agency tasked to administer it.
 Santos: the land in dispute was originally occupied by Col.
Agsalud (given preference because he was a guerilla
veteran) in 1956 up to 1959. Later, Col. Agsalud
transferred his rights in favor of one Ernesto Abalahin who
continuously occupied the land and from whom Santos
acquired the property sometime in Feb. 1969, after which
he himself introduced various improvements thereon and
continuously occupied the land up to the present.
 SC: the Manalilis administered the land before they left for
Manila in 1970. After they moved to Manila they
appointed an administrator to oversee the land and the
improvement and crops they have planted thereon. The
Manalilis have been paying the real estate taxes for the
land even before the sale thereof to them.
o The fact that after the sale, the Manalilis resided in
Manila and Pangasinan is of no moment. It is not
necessary that the owner of the thing exercise
personally the rights of possession. Rights of
possession may be exercised through agents.
o Santos’ claim of buying the land from Abalahin who
bought the same from Col. Agsalud is without basis.
No proof has been presented as to the alleged title
of Col. Agsalud or the transfer of any rights from the
Agsalud to Abalahin.
o The supposed Deed of Absolute Sale between Santos
and Abalahin does not even sufficiently identify the
lot which was the subject of the sale and the same
deed is not authorized and is unregistered. A sale of
a piece of land appearing in a private deed cannot be
considered binding on third persons if it is not
embodied in a public instrument and recorded in the
Registry of Deeds.
2. NO. Mere assertion of an alleged fact is not enough.
 It behooves petitioner to substantiate his claim by credible
evidence, of which there is none, more so, because the law
presumes BOL to have acted regularly in recommending
the sale of the land to Manalili and the Office of the
President, in approving its sale.
 Santos’ protest, filed 9 years after Reynaldo Manalili filed
his application and after the OL had already issued a
Certification of Final Payment in Manalili’s favor was duly
investigated by the BOL.
 Fraud must be established by clear and convincing
evidence.
3.
Dispositive
WHEREFORE, the petition is DENIED and the assailed Decision of the
Court of Appeals AFFIRMED.
Paredes v Espino
Date: March 13, 1968
Ponente: Reyes, JBL
Facts:
 Paredes filed an action to compel (i.e. specific performance and
damages) Espino to execute a deed of sale and to pay damages.
The complaint alleged that Espino had entered into the sale to
Paredes of Lot. 67 of the Puerto Princesa Cadastre at P4.00 a
square meter. According to Paredes, said deal had been closed
by letter and telegram but the actual execution of the deed of
sale and payment of the price were deferred to the arrival of
Espino at Puerto Prinsesa. However, upon Espino’s arrival, he
refused and to execute the deed of sale. As a result, Paredes lost
expected profits from a resale of the property.
o Exhibit A: Letter from Espino accepting Paredes’ offer re:
purchase price of P4.00 a square meter
o Exhbit B: Telegram from Espino advising Paredes of his
arrival by boat
 Espino filed a MD on the ground that the complaint stated no
cause of action and was unenforceable under the Statute of
Frauds.
 CFI: Dismissed complaint there being no written contract (CC
1403).
Issue: WON enforcement pleaded in the complaint is barred by the
Statute of Frauds; therefore, unenforceable
Held: No.
Ratio:
 Article 1403 (2) – “…unless the same, or some note of
memorandum thereof, be in writing, and subscribed by the
party charged, or by his agent; evidence, therefore, of the
agreement cannot be received without the writing, or a
secondary evidence of its contents.”
 Exhibits A and B constitute an adequate memorandum of the
transaction. All essential terms of the contract are present;
hence, they satisfy the requirements of the Statue of Frauds
o Signed by Espino
o Refered to property sold as Lot. 67 covered by TCT No. 62
o Stipulated its area as 1826 square meters
o Purchase price payable in cash
 Berg v Magdalena Estate: “a sufficient memorandum may be
contained in two or more documents.”
 Shaffer v Palma: “whether the agreement is in writing or not, is
a question of evidence; and the authenticity of the writing need
not be established until the trial is held.” Paredes having alleged
that the contract is backed by letter and telegram, and the same
being a sufficient memorandum, his cause of action is thereby
established, especially since Espino has not denied the letters in
question. At any rate, if the Court below entertained any doubts
about the existence of the written memorandum, it should have
called for a preliminary hearing on that point, and not dismissed
the complaint.
Dispositive: Appealed order is set aside and the case remanded to the
Court of origin for trial and decision.
Barretto v. Manila Railroad Co.
Ostrand; 29 March 1924
Petitioner: ESTEBAN BARRETTO
Respondent: THE MANILA RAILROAD Co.
DOCTRINE:
The delivery of the deed to the agent of the vendee, with no intention
to part with the title, does not take the case out of the Statute of
Frauds.
FACTS:
 February 2, 1922 - the general manager of Manila Railroad Co.
addressed a communication to Miller, the right-of-way agent of
MRC, asking for full information about two houses of strong
material on Calle Dagupan, on land MRC owns, and inquiring if
the purchase of the houses would be advantageous.
 February 7 - Miller replied that, “the property in question has
cost MRC P20,801 and is situated on Calle Dagupan forming a
part of our main terminal property and has an area of 1,437.10
square meters. The building located at 1210 Calle Dagupan is
now rented out for P70 a month, and is the building assessed at
P3,700; the other building numbered 1200 is a similar structure
and could be rented at about the same figure as the other. If
these houses were not rented out, they could be used
advantageously for Company purpose.”
 February 9 – the general manager of MRC, through a letter,
authorized the purchase of the 2 houses.
 February 11 – MRC offered to purchase from Barretto his house
built on the land of MRC in Calle Dagupan for P3,700.
 Barretto went to Miller's office and there executed the deed for
the house. He was told to come back to the office in the
afternoon of the same day to receive the purchase price.
 He left the deed with Miller. Upon return to Miller’s office, he
was told that the general manager was absent and that the
money could not be paid until his return.
 Plaintiff made several other unsuccessful attempts to collect
the purchase money and finally Miller handed him the deed to
keep until arrangements could be made for the payment.
CFI: there had been a sufficient part performance on the plaintiff's
part to take the contract out of the Statute of Frauds and rendered
judgment in favor of the plaintiff for the amount demanded in the
complaint.
 MRC: denies the allegations of the complaint. According to
MRC, the agreement referred to by the plaintiff was not in
writing and therefore is not enforceable under the Statute of
Frauds.
ISSUES/HELD:
1.WON the case falls under the Statute of Frauds. YES!
 Though the failure of MRC to accept the deed after having
offered to buy the house and having subjected the plaintiff to
much trouble and annoyance may be subject to criticism, SC
held that as a matter of law, Barretto has established no cause
of action.
 MRC, during the trial, made timely objections to the
introduction of parol evidence to prove the contract of sale and
took due exceptions to the adverse rulings of the court and that,
therefore, articles 1278 and 1279 of the Civil Code do not
apply.
 It is well settled that the delivery of the deed to the agent of
the vendee, with no intention to part with the title, does not
take the case out of the Statute of Frauds. It is therefore
unenforceable.
 There was no delivery of the deed with the intention to part
with the title until the purchase price was paid. There was also
no final acceptance of the deed.
 The fact that the deed was returned to Barretto and retained by
him is conclusive that there was no final acceptance of the deed.
DISPOSITIVE:
The judgment appealed from is reversed without costs in either
instance. So ordered.
IÑIGO V. ESTATE OF MALOTO
September 28, 1967 | Sanchez, J. |
Doctrine: Statute of Frauds applies only to executory contracts-not to
contracts either totally or partially performed
Facts:
● March 29, 1963: Based on a previous verbal agreement,
Margarita Iñigo paid P10,000 to Adriana Maloto for a house and
lot located in Iloilo City
○ Deed of sale was to be executed later on
○ Iñigo did not press Maloto for a receipt for the money
considering the “almost filial relationship” between the
two of them, Iñigo being a niece of Maloto’s deceased
husband
○ Maloto also told Iñigo that the receipt and deed of sale
was to be handled by her lawyer, Atty. Sulpicio Palma
● In the meantime, Iñigo began to exercise ownership and
dominion over the property, making improvements and
constructing a retail store in front thereof
● September & October 1963: Upon Maloto’s instructions, Iñigo
went to see Atty Palma for the preparation of the deed of sale
but failed to so as Palma was on the campaign trail as candidate
for councilor of Iloilo City
● October 20, 1963: Maloto died
○ Torrens title to the property was transferred in the name
of the nephews and niece of Maloto
○ Iñigo formally demanded from them the execution of the
deed of sale but the heirs refused
● Iñigo filed a case to compel heirs to execute the deed of sale
over to her
● City Court of Iloilo: Suit is UNENFORCEABLE under the Statute
of Frauds
○ No written document was executed to record the deed of
sale or the payment of the purchase price
○ 1403(2)(e): A verbal contract for the sale of real property
is unenforceable unless ratified
■ Such contract offends the Statute of Frauds
● Heirs also argue for the dismissal of the present case because in
a separate suit they filed for ejectment against Iñigo wherein
they alleged that she was merely a lessee of the property, the
court ruled in their favor and ordered Iñigo to vacate the
premises.
Issue:
(1) W/N the suit is unenforceable under the Statute of Frauds – NO
(2) W/N the decision in the ejectment case matters in the present
case - NO
Held:
(1) NO. SoF applies only to executory contracts-not to
contracts either totally or partially performed
  Iñigo paid consideration for sale of house and lot and performed
acts of ownership
o Possession
o Improvements
o Retail store
 Consummated contract
o Receipt for consideration nor the sale itself need to be in
writing: Because oral evidence of the alleged
consummated sale of the land is not forbidden by the
Statute of Frauds and may not be excluded in court
(2) NO. An Action of ejectment is no bar to another contesting
ownership
 City Court of Iloilo declared that “it is of the opinion that Iñigo
is only a lessee of the properties described in this complaint”
o “Implicit in this is that the question of ownership was in
reality seriously presented before the city court. So that,
possession, the problem before the city court, could not
have been properly resolved there without first settling
that of ownership. Since the issue of ownership became
apparent in the course of the trial of the ejectment case
aforesaid, the city court lost jurisdiction to proceed
further with the trial thereof and the judgment thereon.
Dispositive
WHEREFORE, For the reasons given, the order of the Court of First
Instance of Iloilo of January 18, 1965 dismissing plaintiff’s complaint
is hereby set aside, and the case remanded to the court of origin for
further proceedings. Costs against defendants. So ordered.
Notes
Annotation re: the Statute of Frauds
Notes from Oblicon & Case:
 Law which required certain contracts/ transactions to be put in
writing and signed by party to be enforceable in Court
o Contracts whose only defect is that they are not in the
form required by the SoF are valid, the only consequence
being that no action can be proved unless requirement is
complied with
 This is to prevent fraud and perjury arising from evidence of
memory
 CAN be ratified by:
o Failure to object to presentation of oral evidence
o The acceptance of the benefits arising from agreement
 GR: BEST EVIDENCE RULE: When an agreement has been
reduced in writing, only documentary evidence may be used to
prove the same. Any other evidence (parol evidence) is not
allowed.
✓ E: There was partial performance
✓ E: Right was waived by failing to object to use of parol
evidence
✓ E: Right was waived by engaging in cross-examination
SoF applies to the following:
1. Actions for damages due to breach of contract OR specific
performance (exclusive)
2. ONLY to executory contracts
a. w/o total or partial performance because this serves as
reliable evidence of parties’ intent. Parties already
enforced it.
b. GR: SoF cannot be applied to contracts where there has
been partial performance
i. In order that a contract not to be performed w/in
1 year may be taken out of operation of the
statute, it must appear clearly that performance
has been made by 1 party, and if anything remains
to be done after the exp. Of the year besides the
mere payment of money, the statute would apply
ii. Contract is vague in its terms and as to subject
matter
iii. Partial Performance examples:
1. Possession
2. Making improvements
3. Rendition of Services
4. Payment of Taxes
5. Relinquishment of rights
iv. Sufficiency of partial performance is to be
determined on a case to case basis bearing in
mind that the doctrine of partial performance was
established to prevent fraud and can be proved by
parol evidence as long as its clear
3. ONLY enumerated
o GR: These are unenforceable unless there’s a note or
memo by party or agent that proves its existence
 By agreement’s own terms, it is not to be performed
on both sides within 1 year (DOES NOT APPLY WHEN
SILENT ON TIME)
 Promise to answer for debt, default, miscarriage of
another (GUARANTOR of 3rd party)
 Agreement made in consideration of marriage,
other than mutual promise to marry
 Sale of goods, chattel or things subject to action
with a price no less than P500.00
• E: No writing required when the buyer accepts
and receives the object
• E: No writing required when the buyer pays
(equivalent to partial perf.)
• E: IN an auction, there’s an entry made by the
auctioneer in a sales book
 Sale of goods, chattel or things subject to action
with a price no less than P500.00
 Contract of lease for a period longer than 1 year
 Sale of real property with interest therein
 Sale of land through agent must be in writing,
otherwise it is void
 Representation as to credit of a 3rd person
REQUIREMENTS for NOTE or MEMO:
 Names of parties and signed by them
 Terms and Conditions of Contract
o Description of property sufficient to render it identifiable
 o Consideration not required because presumed until the
contrary is proved
 Does not have to be a single document, it can be multiple
documents that if put together will satisfy the requirements of
the statute
4. ONLY when writing expresses true intent
5. DOES NOT apply when contract is admitted expressly or
impliedly by failure to deny its existence. In such cases no
further evidence is required
6. Statute may be invoked only by a party to the oral contract
Heirs of Cecilio Claudel (Children) v. CA, Heirs of Macario,
Esperidiona, Raymunda, and Celestina Claudel (Siblings of Cecilio)
July 12, 1991
Sarmiento, J.
Doctrine
The purpose of the Statute of Frauds is to prevent fraud and perjury
in the enforcement of obligations depending on unassisted memory
or witnesses by requiring certain contracts to be in writing.
Facts
- Dec 28 1922: Basilio (Cecilio) Claudel acquired Lot 1230 of the
Muntinlupa Estate Subd. with an area of 10,107 sqm. He
secured a TCT in his name. He died in 1937.
- 1972: 39 years after his death, the lot was partitioned among
the Heirs of Cecilio.
- 1976: The Siblings of Cecilio filed a complaint to cancel the titles
and prayed for reconveyance of the lot, alleging that 46 years
earlier in 1930, their parents had bought the lot from Cecilio for
Php 30. It was a verbal transaction.
o Proof: a subdivision plan dated Mar 25 1930.
- CFI dismissed the complaint disregarding the evidence (statute
of frauds; sale of real property in the absence of any document
evincing the sale).
- CA reversed and ordered the cancellation of the titles.
o Statute of Frauds only applies to executory contracts and
not to consummated sales.
o The action was not for the recovery of possession of real
property but for the cancellation of titles issued to the
HEIRS OF CECILIO in 1973. Since the SIBLINGS OF CECILIO
commenced their complaint for cancellation of titles and
reconveyance with damages on December 7, 1976, only
four years after the HEIRS OF CECILIO partitioned this lot
among themselves and obtained the corresponding
Transfer Certificates of Titles, then there is no prescription
of action yet.
Issues
1. WON the contract of sale of land may be proven orally. NO
2. WON the prescriptive period for the action for cancellation
should be counted from the alleged sale (1930) or from date of
issuance of titles in favor of the Heirs of Cecilio (1976). 1930
Held
- Art. 1403 (Civil Code). The following contracts are
unenforceable, unless they are ratified:
o xxx xxx xxx
o 2) Those that do not comply with the Statute of
Frauds as set forth in this number. In the following cases,
an agreement hereafter made shall be unenforceable by
action unless the same, or some note or memorandum
thereof, be in writing, and subscribed by the party
charged, or by his agent; evidence, therefore, of the
agreement cannot be received without the writing, or a
secondary evidence of its contents:
o xxx xxx xxx
o e) An agreement for the leasing for a longer period
than one year, or for the sale of real property or of an
interest therein;
o xxx xxx xxx
- The purpose of the Statute of Frauds is to prevent fraud and
perjury in the enforcement of obligations depending on
unassisted memory or witnesses by requiring certain contracts
to be in writing.
- In this case therefore, the existence of the contract of sale
cannot be proved.
- On the issue of prescription
o 1145 CC states that the actions upon an oral contract must
be commenced within 6 years.
o If the parties SIBLINGS OF CECILIO had allegedly derived
their right of action from the oral purchase made by their
parents in 1930, then the action filed in 1976 would have
clearly prescribed. More than six years had lapsed.
- Above all, the torrens title in the possession of the HEIRS OF
CECILIO carries more weight as proof of ownership than the
survey or subdivision plan of a parcel of land in the name of
SIBLINGS OF CECILIO.
o A torrens title, once registered, cannot be defeated, even
by adverse, open and notorious possession. A registered
title under the torrens system cannot be defeated by
prescription. The title, once registered, is notice to the
world. All persons must take notice. No one can plead
ignorance of the registration.
o xxx xxx xxx
o Furthermore, a private individual may not bring an action
for reversion or any action which would have the effect of
cancelling a free patent and the corresponding certificate
of title issued on the basis thereof, with the result that the
land covered thereby will again form part of the public
domain, as only the Solicitor General or the officer acting
in his stead may do so.
- Mere registration of the sale is not good enough, good faith
must concur with registration. Otherwise registration becomes
an exercise in futility.
- Even when the Siblings lived on the contested premises, they
paid a sum designated as “taxes” to Cecilio’s widow and heirs.
- The Siblings also had to ask permission to stay on the land from
Jose, one of the Heirs.
Dispositive
WHEREFORE, the petition is GRANTED We REVERSE and SET ASIDE the
decision rendered in CA-G.R. CV No. 04429, and we hereby REINSTATE
the decision of the then Court of First Instance of Rizal (Branch 28,
Pasay City) in Civil Case No. M-5276-P which ruled for the dismissal of
the Complaint for Cancellation of Titles and Reconveyance with
Damages filed by the Heirs of Macario, Esperidiona Raymunda, and
Celestina, all surnamed CLAUDEL. Costs against the private
respondents.
MARTA C. ORTEGA, plaintiff and appellant, vs. DANIEL LEONARDO,
defendant and appellee.
May 28, 1958 | BENGZON, J.
DOCTRINE:
Possession by the purchaser under a parol contract for the purchase
of real property, together with his making valuable and permanent
improvements on the property which are referable exclusively to the
contract, in reliance on the contract, in the honest belief that he has
a right to make them, and with the knowledge and consent or
acquiescence of the vendor, is deemed a part performance of the
contract.
FACTS:
Alleging partial performance, plaintiff sought to compel defendant to
comply with their oral contract of sale of a parcel of land.
- The complaint averred that long before and until her house had
been completely destroyed during the liberation of the City of
Manila, plaintiff ORTEGA occupied a parcel of land in San
Andres St., Malate, Manila (LOT I)
- After the liberation of Manila, the administration and
disposition of the said Lot I (together with other lots in the Ana
Sarmiento Estate) were assigned by the Government to the
Rural Progress Administration plaintiff asserted her right
thereto (as occupant) for purposes of purchase; (meaning she
wanted to purchase it first as she was the present occupant)
- Defendant LEONARDO also asserted the same right claiming
occupancy of a portion of the land subsequent to petitioner.
- Defendant asked the pet to desist from pressing her claim and
promised that if and when he succeeded in getting title to Lot
I (note that this is an oral agreement):
o he would sell to her a portion of it 55.60 sqm (particularly
described) at the rate of P25.00 per square meter,
provided she paid for the surveying and subdivision of
the Lot.
o She could continue holding the lot as tenant by paying
monthly rent of P10.00 until the purchase price has been
fully paid.
- Plaintiff accepted the offer and desisted her claim.
- When def finally acquired the title, pet relying on their
agreement, caused the survey and segregation of the portion
which was promised to her at her own account. This portion
now designated as Lot I-B
- Her son owned the adjoining lot beside Lot I. When they had
her son’s house remodeled, she extended the construction
over Lot I-B.
- She also regularly paid the agree upon monthly rental of
P10.000.
- After approval by the Bureau of Lands, plaintiff tendered to
defendant the purchase price which Leonardo refused to
accept.
PET: the contract in question, although verbal, was partially
performed because plaintiff desisted from claiming the portion of
Lot I in question due to the promise of defendant to transfer said
portion to her after the issuance of title to defendant.
CFI: Dismissed based on the general rule in the Statute of Frauds
precluding enforcement of oral contracts for the sale of land.
- The desistance to the claim is not part of the contract of sale.
Only the performance of an essential part of the executory
contract will make the it enforceable (e.g. payment of the price)
ISSUE: WON the verbal contract has been partially executed and
therefore enforceable against the seller Leonardo. YES
HELD:
- American Jurisprudence under “Statute of Frauds” lists other
acts of partial performance, such as possession, the making of
improvements, rendition of services, payment of taxes,
relinquishment of rights, etc.
- Continued possession under an oral contract of sale, by one
already in possession as a tenant, has been held a sufficient
part performance, where accompanied by other acts which
characterize the continued possession
- “The making of valuable permanent improvements on the
land by the purchaser, in pursuance of the agreement and with
the knowledge of the vendor, has been said to be the strongest
and most unequivocal act of part performance by which a
verbal contract to sell land is taken out of the statute of frauds
- It would appear that the complaint in this case described
several circumstance indicating partial performance:
o relinquishment of rights continued possession,
o building of improvements,
o tender of payment plus the
o surveying of the lot at plaintiff's expense and
o the payment of rentals.
- It would be a fraud upon the plaintiff if the defendant were
permitted to oppose performance of his part after he has
allowed or induced the former to perform in reliance upon the
agreement.
DEF: "relinquishment" is not part performance, and that neither
"surveying the land" nor tender of payment is sufficient
SC: granting that none of the three circumstances indicated by him,
(relinquishment, survey, tender) would separately suffice, still the
combination of the three with the others already mentioned,
amounts to more than enough.
The judgment will accordingly be reversed and the record remanded
for further proceedings. With costs against appellee.
CITY-LITE REALTY CORP V. COURT OF APPEALS and F.P. HOLDINGS &
REALTY, METRO DRUG INC., MELDIN AL G. ROY, VIEWMASTER
CONSTRUCTION CORP., and the REGISTER OF DEEDS OF QUEZON
CITY
February 10, 2000 | BELLOSILLO, J. |
Doctrine: Art. 1874. When the sale of a piece of land or any interest
therein is through an agent, the authority of the latter shall be in
writing; otherwise, the sale shall be void.
Facts:
● FP Holdings (FPH) was the registered owner of a parcel of land
along E. Rodriguez Ave, Quezon City known as the “Violago
Property.”
● The property was offered for sale to the general public through
the circulation of a sales brochure.
○ The sales brochure indicated Meldin Al G. Roy of Metro
Drug Inc. as the contact person.
● Roy sent a sales brochure along with copies of the TCT to Atty.
Mamaril, a lawyer and licensed real estate broker, who then
sent it to Teng and Atty. Villanueva, the EVP and Legal Counsel
of City-Lite, respectively. They conveyed their interest in buying
the front part of the property to Roy.
● Negotiations ensued between Roy and the representatives of
City-Lite until the parties reached an agreement and Roy agreed
to sell the property to City-Lite provided only that City-Lite
 submit its acceptance to the terms and conditions in writing.
Teng and Villanueva did so.
● For some reason and despite demand, FPH refused to execute
the corresponding deed of sale in favor of City-Lite.
● City-Lite filed an adverse claim to the title of the property which
FPH tried to amicably settle but City-Lite refused. The RTC
upheld City-Lite’s adverse claim.
● During the pendency of the suit, FPH had the property
resurveyed and separate titles issued for the different portions.
It then sold the portion under litigation to Viewmaster
Construction Corp.
● City-Lite institued a complaint against FPH for specific
performance and damages. It later included Viewmaster and
the Register of Deeds, praying that the latter cancel the title of
the former.
● RTC decided in favor of City-Lite, ordering FPH to execute a deed
of sale and for the Register of Deeds to cancel Viewmaster’s
certificate of title.
● Court of Appeals reversed and set aside the RTC judgment,
declaring that no contract of sale was perfected because of lack
of a definite agreement on the manner of paying the purchase
price and that Metro Drug and Roy were not authorized to sell
the property to City-Lite, their authority limited to that of a
mere liaison or contact person.
● City-Lite appealed, arguing that Metro Drug and Roy had
authority based on witness testimonies, the sales brochure and
that it was common knowledge among brokers that he was the
authorized agent for FPH.

Issue:
W/N a contract of sale was perfected between City-Lite and FPH
through their agent Roy

Held:
NO.
● Art. 1874 states that “When the sale of a piece of land or any
interest therein is through an agent, the authority of the latter
shall be in writing; otherwise, the sale shall be void.”
● The written memo of FPH’s President requesting Metro Drug’s
assistance in finding buyers indicated that Metro Drug/Roy was
only to look for prospective buyers and conduct preliminary
negotiations and endorse formal offers to FPH for final
acceptance
● Roy was only a contact person with no authority to conclude a
sale of the property. His only job was to bring the parties
together for a possible transaction.
● For lack of a written authority, the sale should be declared null
and void; the sale could not produce any legal effect to transfer
the property from FPH to City-Lite.

Dispositive
WHEREFORE, the appealed Decision of the Court of Appeals being in
accord with the law and the evidence is AFFIRMED. Costs against
petitioner.