ROCKLAND CONSTRUCTION COMPANY, INC vs.

MID-PASIG LAND
DEVELOPMENT CORPORATION
G.R. No. 164587, February 04, 2008
FACTS:
Rockland Construction Company, Inc. in a letter dated March 1, 2000,
offered to leasefrom Mid-Pasig Land Development Corporation the latter‘s 3.1-
hectare property in Pasig City.This property is covered by Transfer Certificate of
Title Nos. 469702 and 337158 under thecontrol of the Presidential Commission
on Good Government. Upon instruction of Mid-Pasig toaddress the offer to the
PCGG, Rockland wrote the PCGG on April 15, 2000. The letter,addressed to
PCGG Chairman Magdangal Elma, included Rockland‘ proposed terms
andconditions for the lease. This letter was also received by Mid-Pasig on April
18, 2000, but MidPasig made no response.Again, in another letter dated June 8,
2000 addressed to the Chairman of Mid-Pasig, Mr.Ronaldo Salonga, Rockland
sent a Metropolitan Bank and Trust Company Check No.2930050168 for P1
million as a sign of its good faith and readiness to enter into the leaseagreement
under the certain terms and conditions stipulated in the letter. Mid-Pasig received
thisletter on July 28, 2000.
In a subsequent follow-up letter dated February 2, 2001, Rockland then
said that itpresumed that Mid-Pasig had accepted its offer because the P1 million
check it issued had beencredited to Mid-Pasig‘s account on December 5,
2000.Mid-Pasig, however, denied it accepted Rockland‘s offer and claimed that
no check wasattached to the said letter. It also vehemently denied receiving the P1
million check,much lessdepositing it in its account.In its letter dated February 6,
2001, Mid-Pasig replied to Rockland that it was only uponreceipt of the latter‘s
February 2 letter that the former came to know where the check came from and
what it was for.
Nevertheless, it categorically informed Rockland that it could not
entertainthe latter‘s lease application. Mid-Pasig reiterated its refusal of
Rockland‘s offer in a letter datedFebruary 13, 2001.Rockland then filed an action
for specific performance. Rockland sought to compel MidPasig to execute in
Rockland‘s favor, contract of lease over a 3.1-hectare portion of MidPasig‘s
property in Pasig City.
The RTC‘s decision:1. the plaintiff and the defendant have duly agreed
upon a valid and enforceable leaseagreement of subject portions of defendant‘s
properties comprising an area of 5,000square meters, 11,000 square meters and
5,000 square meters, or a total of 31,000square meters;2. the principal terms and
conditions of the aforesaid lease agreement are as stated inplaintiff‘s June 8, 2000
letter;3. defendant to execute a written lease contract in favor of the plaintiff
containing theprincipal terms and conditions mentioned in the next-preceding
paragraph, within sixty(60) days from finality of this judgment, and likewise
ordering the plaintiff to pay rent tothe defendant as specified in said terms and
conditions;4. defendant to keep and maintain the plaintiff in the peaceful
possession and enjoyment ofthe leased premises during the term of said
contract;5. defendant to pay plaintiff attorney‘s fees in the sum of One Million
Pesos(P1,000,000.00), plus P2,000.00 for every appearance made by counsel in
court;6. The temporary restraining order dated April 2, 2001 is made
PERMANENT;7. Dismissed defendant‘s counterclaim.The Court of Appeals
reversed the trial court‘s decision.
ISSUES:
1
 1. Was there a perfected contract of lease?
2. Had estoppel in pais set in?

RULING:
1. A close review of the events in this case, in the light of the parties‘
evidence, shows that there was no perfected contract of lease between
the parties. Mid-Pasig was not aware that Rockland deposited the P1
million check in its account. It only learned of Rockland‘s check when
it received Rockland‘s February 2, 2001 letter. Mid-Pasig, upon
investigation, also learned that the check was deposited at the
Philippine National Bank San Juan Branch, instead of PNB Ortigas
Branch where Mid-Pasig maintains its account. Immediately, Mid-
Pasig wrote Rockland on February 6, 2001 rejecting the offer, and
proposed that Rockland apply the P1 million to its other existing lease
instead. These circumstances clearly show that there was no
concurrence of Rockland‘s offer and Mid-Pasig‘s acceptance.
2. Mid-Pasig is also not in estoppel in pais. The doctrine of estoppel is
based on the grounds of public policy, fair dealing, good faith and
justice, and its purpose is to forbid one to speak against his own act,
representations, or commitments to the injury of one to whom they
were directed and who reasonably relied thereon. Since estoppel is
based on equity and justice, it is essential that before a person can be
barred from asserting a fact contrary to his act or conduct, it must be
shown that such act or conduct has been intended and would unjustly
cause harm to those who are misled if the principle were not applied
against him.
Hence, the petition was denied.

2
 MANILA METAL CONTAINER CORPORATION, petitioner
REYNALDO C. TOLENTINO, intervenor,
vs.
PHILIPPINE NATIONAL BANK, respondent,
DMCI-PROJECT DEVELOPERS, INC., intervenor
G.R. No. 166862 December 20, 2006
FACTS:
Petitioner was the owner of a 8,015 square meter parcel of land and to
secure a P900,000.00 loan it had obtained from respondent PNB, petitioner
executed a real estate mortgage over the lot. Respondent PNB later granted
petitioner a new credit accommodation of P1,000,000.00; and, on November 16,
1973, petitioner executed an Amendment of Real Estate Mortgage over its
property. On March 31, 1981, petitioner secured another loan of P653,000.00
from respondent PNB, payable in quarterly installments of P32,650.00, plus
interests and other charges.
PNB filed a petition for extrajudicial foreclosure of the real estate
mortgage and sought to have the property sold at public auction for P911,532.21,
petitioner's outstanding obligation to respondent PNB as of June 30, 1982, plus
interests and Attorney's fees. After due notice and publication, the property was
sold at public auction where respondent PNB was declared the winning bidder for
P1,000,000.00. The period to redeem the property was to expire on February 17,
1984. Petitioner sent a letter dated August 25, 1983 to respondent PNB,
requesting that it be granted an extension of time to redeem/repurchase the
property. Respondent PNB informed petitioner that the request had been referred
to its Pasay City Branch for appropriate action and recommendation.
Petitioner reiterated its request for a one year extension from February 17,
1984 within which to redeem/repurchase the property on installment basis. It
reiterated its request to repurchase the property on installment. Meanwhile, some
PNB Pasay City Branch personnel informed petitioner that as a matter of policy,
the bank does not accept "partial redemption‖.
Since petitioner failed to redeem the property, the Register of Deeds
cancelled TCT No. 32098 and issued a new title in favor of respondent PNB.
Petitioner's offers had not yet been acted upon by respondent PNB.
Meanwhile, the Special Assets Management Department (SAMD) had
prepared a statement of account, and as of June 25, 1984 petitioner's obligation
amounted to P1,574,560.47. This included the bid price of P1,056,924.50,
interest, advances of insurance premiums, advances on realty taxes, registration
expenses, miscellaneous expenses and publication cost. When apprised of the
statement of account, petitioner remitted P725,000.00 to respondent PNB as
"deposit to repurchase," and an Official Receipt was issued. The SAMD
recommended to the
management of respondent PNB that petitioner be allowed to repurchase the
property for P1,574,560.00. In a letter dated November 14, 1984, the PNB
management informed petitioner that it was rejecting the offer and the
recommendation of the SAMD. It was suggested that petitioner purchase the
property for P2,660,000.00, its minimum market value. Respondent PNB gave
petitioner until December 15, 1984 to act on the proposal; otherwise, its

3
P725,000.00 deposit would be returned and the property would be sold to other
interested buyers.
Petitioner, however, did not agree to respondent PNB's proposal. Instead,
it wrote another letter dated December 12, 1984 requesting for a reconsideration.
Respondent PNB replied in a letter dated December 28, 1984, wherein it
reiterated its proposal that petitioner purchase the property for P2,660,000.00.
PNB again informed petitioner that it would return the depositshould petitioner
desire to withdraw its offer to purchase the property. On February 25, 1985,
petitioner, through counsel, requested that PNB reconsider its letter dated
December 28, 1984.Petitioner declared that it had already agreed to the SAMD's
offer to purchase the property forP1,574,560.47, and that was why it had paid
P725,000.00. Petitioner warned respondent PNBthat it would seek judicial
recourse should PNB insist on the position.
On June 4, 1985, respondent PNB informed petitioner that the PNB Board
of Directorshad accepted petitioner's offer to purchase the property, but for
P1,931,389.53 in cash less theP725,000.00 already deposited with it. Petitioner
did not respond, so PNB requested petitioner ina letter dated June 30, 1988 to
submit an amended offer to repurchase. Petitioner rejectedrespondent's proposal
in a letterdated July 14, 1988. It maintained that respondent PNB hadagreed to
sell the property for P1,574,560.47, and that since its P725,000.00 downpayment
hadbeen accepted, respondent PNB was proscribed from increasing the purchase
price of theproperty. Petitioner averred that it had a net balance payable in the
amount of P643,452.34.Respondent PNB, however, rejected petitioner's offer to
pay the balance of P643,452.34 in aletter dated August 1, 1989.
Petitioner filed a complaint against respondent PNB for "Annulment of
Mortgage andMortgage Foreclosure, Delivery of Title, or Specific Performance
with Damages. RespondentPNB averred, as a special and affirmative defense, that
it had acquired ownership over theproperty after the period to redeem had
elapsed. It claimed that no contract of sale was perfectedbetween it and petitioner
after the period to redeem the property had expired. The trial courtrendered
judgment dismissing the amended complaint and respondent PNB's counterclaim.
Itordered respondent PNB to refund the P725,000.00 deposit petitioner had made.
The trialcourtruled that there was no perfected contract of sale between the
parties; hence, petitioner had nocause of action for specific performance against
respondent. The Court of Appeals affirmed theRTC‘s decision.
ISSUE:
Whether or not petitioner and respondent PNB had entered into a perfected
contract forpetitioner to repurchase the property from respondent.
RULING:
The ruling of the appellate court that there was no perfected contract of sale
between theparties is correct.It appears that although respondent requested
petitioner to conform to its amendedcounter-offer, petitioner refused and instead
requested respondent to reconsider its amendedcounter-offer. Petitioner's request
was ultimately rejected and respondent offered to refund itsP725,000.00 deposit.
In sum, then, there was no perfected contract of sale between petitioner and
respondent over the subject property.

4
 MONTECILLO VS. REYNES
385 SCRA 244
FACTS:
Respondents Ignacia Reynes and spouses Abucay filed on June 20, 1984 a
complaint for Declaration of Nullity and Quieting of Title against petitioner Rico
Montecillo. Reynes asserted that she is the owner of a lot situated in Mabolo,
Cebu City. In 1981 Reynes sold 185 square meters of the Mabolo Lot to the
Abucay Spouses who built a residential house on the lot they bought.
Reynes alleged further that she signed a Deed of Sale of the Mabolo Lot in
favor of Montecillo. Reynes, being illiterate signed by affixing her thumb-mark
on the document. Montecillo promised to pay the agreed P47,000.00 purchase
price within one month from the signing of the Deed of Sale. And that Montecillo
failed to pay the purchase price after the lapse of the one-month period, prompting
Reynes to demand from Montecillo the return of the Deed of Sale. Since
Montecillo refused to return the Deed of Sale, Reynes executed a document
unilaterally revoking the sale and gave a copy of the document to Montecillo.
Subsequently, on May 23, 1984 Reynes signed a Deed of Sale transferring
to the Abucay Spouses the entire Mabolo Lot, at the same time confirming the
previous sale in 1981 of a 185 square meter portion of the lot.
Reynes and the Abucay Spouses alleged that they received information
that the Register of Deeds of Cebu City issued a Certificate of Title in the name of
Montecillo for the Mabolo lot. They argued that ―for lack for consideration there
(was no meeting of the minds) between Reynes and Montecillo. Thus, the trial
court should declare null and void ab initio Monticello‘s Deed of sale, and order
the cancellation of certificates of title No. 90805 in the name of
Montecillo.
In his Answer, Montecillo a bank executive claimed he was a buyer in
good faith and had actually paid the P47,000.00 consideration stated on his Deed
of Sale. Montecillo however admitted he still owned Reynes a balance of
P10,000.00. He also alleged that he paid P50,000.00 for the release of the chattel
mortgage which he argued constituted a lien on the Mabolo Lot. He further
alleged that he paid for the real property tax as well as the capital gains tax on the
sale of the Mabolo Lot.
In their reply, Reynes and the Abucay Spouses contended that Montecillo
did not have authority to discharge the chattel mortgage especially after Reynes
revoked Montecillo‘s Deed of Sale and gave the mortgagee a copy of the
document of revocation. Reynes and the Abucay Spouses claimed that Montecillo
secured the release of the chattel mortgage through machination. They further
asserted that Montecillo took advantage of the real property taxes paid by the
Abucay Spouses and surreptitiously caused the transfer of the title to the Mabolo
Lot in his name.
During pre-trial Montecillo claimed that the consideration for the sale of
the Mabolo Lot was the amount he paid to Cebu Iced and Cold Storage
Corporation for the mortgage debt of Bienvenido Jayag. Montecillo argued that

5
the release of the mortgage was necessary since the mortgage constituted a lien on
the Mabolo Lot. Reynes, however stated that she had nothing to do with Jayag‘s
mortgage debt except that the house mortgaged by Jayag stood on a portion of the
Mabolo Lot. Reynes further stated that the payment by Montecillo to release the
mortgage on Jayag‘s house is a matter between Montecillo and Jayag. The
mortgage on the house being a chattel mortgage could not be interpreted in any
way as an encumbrance on the Mabolo Lot. Reynes further claimed that the
mortgage debt had long prescribed since the P47,000.00 mortgage debt was due
for payment on January 30,1967.
ISSUE:
Whether or not there was a valid consent in the case at bar to have a valid
contract.
RULING:
One of the three essential requisites of a valid contract is consent of the
parties on the object and cause of the contract. In a contract of sale, the parties
must agree not only on the price, but also on the manner of payment of the price.
An agreement on the price but a disagreement on the manner of its payment will
not result in consent, thus preventing the existence of a valid contract for a lack of
consent. This lack of consent is separate and distinct for lack of consideration
where the contract states that the price has been paid when in fact it has never
been paid.
Reynes expected Montecillo to pay him directly the P47, 000.00 purchase
price within one month after the signing of the Deed of Sale. On the other hand,
Montecillo thought that his agreement with Reynes required him to pay the
P47,000.00-purchase price to Cebu Ice Storage to settle Jayag‘s mortgage debt.
Montecillo also acknowledged a balance of P10, 000.00 in favour of Reynes
although this amount is not stated in Montecillo‘s Deed of Sale. Thus, there was
no consent or meeting of the minds, between Reynes and Montecillo on the
manner of payment. This prevented the existence of a valid contract because of
lack of consent.
In summary, Montecillo‘s Deed of Sale is null and void ab initio not only
or lack of consideration, but also for lack of consent. The cancellation of TCT No.
90805 in the name of Montecillo is in order as there was no valid contract
transferring ownership of the Mabolo Lot from Reynes to Montecillo.

6
 JASMIN SOLER VS. COURT OF APPEALS
G.R. No. 123892 May 2, 2001
FACTS:
Petitioner is a professional interior designer. In November 1986, her friend
Rosario Pardo asked her to talk to Nida Lopez, who was manager of the
COMBANK Ermita Branch for they were planning to renovate the branch offices.
Even prior to November 1986, petitioner and Nida Lopez knew each other
because of Rosario Pardo, the latter‘s sister. During their meeting, petitioner was
hesitant to accept the job because of her many out of town commitments, and also
considering that Ms. Lopez was asking that the designs be submitted by
December 1986, which was such a short notice. Ms. Lopez insisted, however,
because she really wanted petitioner to do the design for renovation. Petitioner
acceded to the request. Ms. Lopez assured her that she would be compensated for
her services. Petitioner even told Ms. Lopez that her professional fee was
P10,000.00, to which Ms. Lopez acceded.
During the November 1986 meeting between petitioner and Ms. Lopez,
there were discussions as to what was to be renovated. Ms. Lopez again assured
petitioner that the bank would pay her fees. After a few days, petitioner requested
for the blueprint of the building so that the proper design, plans and specifications
could be given to Ms. Lopez in time for the board meeting in December 1986.
Petitioner then asked her draftsman Jackie Barcelon to go to the jobsite to make
the proper measurements using the blue print. Petitioner also did her research on
the designs and individual drawings of what the bank wanted. Petitioner hired
Engineer Ortanez to make the electrical layout, architects Frison Cruz and De
Mesa to do the drafting. For the services rendered by these individuals, petitioner
paid their professional fees. Petitioner also contacted the suppliers of the
wallpaper and the sash makers for their quotation. So come December 1986, the
lay out and the design were submitted to Ms. Lopez. She even told petitioner that
she liked the designs.
Subsequently, petitioner repeatedly demanded payment for her services
but Ms. Lopez just ignored the demands. In February 1987, by chance petitioner
and Ms. Lopez saw each other in a concert at the Cultural Center of the
Philippines. Petitioner inquired about the payment for her services, Ms. Lopez
curtly replied that she was not entitled to it because her designs did not conform
to the bank‘s policy of having a standard design, and that there was no agreement
between her and the bank.
Petitioner, through her lawyers, who wrote Ms. Lopez, demanding
payment for her professional fees in the amount of P10,000.00 which Ms. Lopez
ignored. The lawyers wrote Ms. Lopez once again demanding the return of the
blueprint copies petitioner submitted which Ms. Lopez refused to return. The
petitioner then filed at the trial court a complaint against COMBANK and Ms.
Lopez for collection of professional fees and damages. In its answer, COMBANK
stated that there was no contract between COMBANK and petitioner; that Ms.
Lopez merely invited petitioner to participate in a bid for the renovation of the

7
COMBANK Ermita Branch; that any proposal was still subject to the approval of
the COMBANK‘s head office. The trial court rendered judgment in favor of
plaintiff. On appeal, the Court of Appeals reversed the decision. Hence, this
petition.
ISSUE:
Whether or not the Court of Appeals erred in ruling that there was no
contract between petitioner and respondents, in the absence of the element of
consent.
RULING:
A contract is a meeting of the minds between two persons whereby one
binds himself togive something or to render some service to bind himself to give
something to render someservice to another for consideration. There is no contract
unless the following requisites concur:1. Consent of the contracting parties; 2.
Object certain which is the subject matter of the contract;and 3. Cause of the
obligation which is established.
In the case at bar, there was a perfected oral contract. When Ms. Lopez
and petitioner metin November 1986, and discussed the details of the work, the
first stage of the contractcommenced. When they agreed to the payment of the
P10,000.00 as professional fees ofpetitioner and that she should give the designs
before the December 1986 board meeting of thebank, the second stage of the
contract proceeded, and when finally petitioner gave the designs toMs. Lopez,
thecontract was consummated. Petitioner believed that once she submitted
thedesigns she would be paid her professional fees. Ms. Lopez assured petitioner
that she would bepaid.It is familiar doctrine that if a corporation knowingly
permits one of its officers, or anyother agent, to act within the scope of an
apparent authority, it holds him out to the public aspossessing the power to do
those acts; and thus, the corporation will, as against anyone who hasin good faith
dealt with it through such agent, be estopped from denying the agent‘s authority.
Also, petitioner may be paid on the basis of quantum meruit. "It is
essential for the properoperation of the principle that there is an acceptance of the
benefits by one sought to be chargedfor the services rendered under circumstances
as reasonably to notify him that the lawyerperforming the task was expecting to
be paid compensation therefor. The doctrine of quantummeruit is a device to
prevent undue enrichment based on the equitable postulate that it is unjustfor a
person to retain benefit without paying for it."
The designs petitioner submitted to Ms. Lopez were not returned. Ms.
Lopez, an officerof the bank as branch manager used such designs for
presentation to the board of the bank. Thus,the designs were in fact useful to Ms.
Lopez for she did not appear to the board without anydesigns at the time of the
deadline set by the board.
Decision reversed and set aside. Decision of the trial court affirmed.

8
ABS-CBN BROADCASTING CORPORATION VS. COURT OF APPEALS
301 SCRA 573
G.R. No. 128690 January 21, 1999
FACTS:
In 1990, ABS-CBN and VIVA executed a Film Exhibition Agreement
whereby Viva gave ABS-CBN an exclusive right to exhibit some Viva films.
Viva, through defendant Del Rosario, offered ABS-CBN, through its vice-
president Charo Santos-Concio, a list of three film packages (36 title) from which
ABS-CBN may exercise its right of first refusal under the aforesaid agreement.
ABS-CBN, however through Mrs. Concio, "can tick off only ten titles" (from the
list) "we can purchase" and therefore did not accept said list. The titles ticked off
by Mrs. Concio are not the subject of the case at bar except the film "Maging Sino
Ka Man."
On February 27, 1992, defendant Del Rosario approached ABS-CBN‘s
Ms. Concio, with a list consisting of 52 original movie titles (i.e., not yet aired on
television) including the 14 titles subject of the present case, as well as 104 re-
runs (previously aired on television) from which ABS-CBN may choose another
52 titles, as a total of 156 titles, proposing to sell to ABS-CBN airing rights over
this package of 52 originals and 52 re-runs for P60,000,000.00 of which
P30,000,000.00 will be in cash and P30,000,000.00 worth of television spots.
On April 2, 1992, defendant Del Rosario and ABS-CBN‘s general
manager, Eugenio Lopez III discussed the package proposal of VIVA. Mr. Lopez
testified that he and Mr. Del Rosario allegedly agreed that ABS-CBN was granted
exclusive film rights to fourteen (14) films for a total consideration of P36
million; that he allegedly put this agreement as to the price and number of films in
a "napkin" and signed it and gave it to Mr. Del Rosario.
On the other hand, Del Rosario denied having made any agreement with
Lopez regarding the 14 Viva films; denied the existence of a napkin in which
Lopez wrote something; and insisted that what he and Lopez discussed at the
lunch meeting was Viva‘s film package offer of 104 films (52 originals and 52 re-
runs) for a total price of P60 million.
Del Rosario and Mr. Graciano Gozon of RBS Senior vice-president for
Finance discussed the terms and conditions of Viva‘s offer to sell the 104 films,
after the rejection of the same package by ABS-CBN. On the following day, Del
Rosario received a draft contract from Ms. Concio which contains a counter-
roposal of ABS-CBN on the offer made by VIVA including the right of first
refusal to 1992 Viva Films. However, the proposal was rejected by the Board of
Directors of VIVA and such was relayed to Ms. Concio.
On April 29, 1992, after the rejection of ABS-CBN and following several
negotiations and meetings defendant Del Rosario and Viva‘s President Teresita
Cruz, in consideration of P60 million, signed a letter of agreement dated April 24,
1992, granting RBS the exclusive right to air 104 Viva-produced and/or acquired
films including the fourteen films subject of he present case.

9
 On 27 May 1992, ABS-CBN filed before the RTC a complaint for specific
performance with a prayer for a writ of preliminary injunction and/or temporary
restraining order against private respondents Republic Broadcasting System (now
GMA Network Inc.) On 28 May 1992, the RTC issued a temporary restraining
order.
The RTC then rendered decision in favor of RBS and against ABS-CBN.
On appeal, the same decision was affirmed. Hence, this decision.
ISSUE:
Whether or not there exists a perfected contract between ABS-CBN and
VIVA.
RULING:
A contract is a meeting of minds between two persons whereby one binds
himself to givesomething or render some service to another [Art. 1305, Civil
Code.] for a consideration. Thereis no contract unless the following requisites
concur:
(1) consent of the contracting parties;
(2) object certain which is the subject of the contract; and
(3) cause of the obligation, which is established. [Art. 1318, Civil Code.]A
contract undergoes three stages:
(a) preparation, conception, or generation, which is the period of
negotiation andbargaining rending at the moment of agreement of
the parties;
(b) perfection or birth of the contract, which is the moment when
the parties come toagree on the terms of the contract; and
(c) consummation or death, which is the fulfillment or performance
of the termsagreed upon in the contract.
In the present case, when Mr. Del Rosario of Viva met Mr. Lopez of ABS-
CBN on 2April 1992 to discuss the package of films, said package of 104
VIVAfilms was VIVA‘s offer toABS-CBN to enter into a new Film Exhibition
Agreement. But ABS-CBN, sent through Ms.Concio, counter-proposal in the
form a draft contract proposing exhibition of 53 films for aconsideration of P35
million. This counter-proposal could be nothing less than the counter-offerof Mr.
Lopez during his conference with Del Rosario at Tamarind Grill Restaurant.
Clearly,there was no acceptance of VIVA‘s offer, for it was met by a counter-
offer which substantiallyvaried the terms of the offer.
Furthermore, ABS-CBN made no acceptance of VIVA‘s offer hence, they
underwentperiod of bargaining. ABS-CBN then formalized its counter-proposals
or counter-offer in a draftcontract. VIVA through its Board of Directors, rejected
such counter-offer. Even if it beconceded arguendo that Del Rosario had accepted
the counter-offer, the acceptance did not bindVIVA, as there was no proof
whatsoever that Del Rosario had the specific authority to do so.
The instant petition was GRANTED.

10
 LOURDES ONG LIMSON VS. COURT of APPEALS, et al
357 SCRA 209
G. R. No. 135929 April 20, 2001
FACTS:
In July 1978, respondent spouses Lorenzo de Vera and Asuncion Santos-
de Vera, through their agent Marcosa Sanchez, offered to sell to petitioner
Lourdes Ong Limson a parcel of land. The respondent spouses were the owners of
the subject property.
On July 31, 1978, she agreed to but the property at the price of P34. 00 per
square meter and gave P20, 000.00 as ―earnest money‖. The respondent spouses
signed a receipt thereafter and gave her a 10-day option period to purchase the
property. Respondent spouses informed petitioner that the subject property was
mortgaged to Emilio Ramos and Isidro Ramos. Petitioner was asked to pay the
balance of the purchase price to enable the respondent spouses to settle their
obligation with the Ramoses. Petitioner agreed to meet respondent spouses and
the Ramoses on August 5, 1978, to consummate the transaction; however, the
respondent spouses and the Ramoses did not appear, same with their second
meeting.
On August 23, 1978, petitioner allegedly gave respondent spouses three
checks for the settlement the back taxes of property. On September 5, 1978, the
agent of the respondent spouses informed petitioner that the property was the
subject of a negotiation for the sale to respondent Sunvar Realty Development
Corporation. Petitioner alleged that it was only on September 15, 1978, that TCT
No. S-72946 covering the property was issued to respondent spouses. On the
same day, petitioner filed and Affidavit of Adverse Claim with the Office of the
Registry of Deeds of Makati, Metro Manila.
The Deed of Sale between respondent spouses and respondent Sunvar was
executed on September 15, 1978 and TCT No. S-72377 was issued in favor of
Sunvar on September 26, 1978 with the Adverse Claim of petitioner annotated
thereon. Respondent spouses and Sunvar filed their Answers and Answers to
Cross-Claim, respectively. On appeal, the Court of Appeals completely reversed
the decision of the trial court and ordered the Register of Deeds of Makati City to
lift the Adverse Claim and ordered petitioner to pay respondent Sunvar and
respondent spouses exemplary and nominal damages and attorney‘s fees. Hence,
this petition.
ISSUE:
Whether or not the agreement between petitioner and respondent spouses
was a mere option or a contract to sell.
RULING:
The Supreme Court held that the agreement between the parties was a
contract of option and not a contract to sell. An option is continuing offer or
contract by which the owner stipulates with another that the latter shall have the

11
right to buy the property at a fixed price within a time certain, or under, or in
compliance with, certain terms and conditions, or which gives the owner of the
property the right to sell or demand a sale. It is also sometimes called an
―unaccepted offer‖. An option is not of itself a purchase, but merely secures the
privilege to buy. It is not a sale of property but a sale of the right to purchase. Its
distinguishing characteristic is that it imposes no binding obligation on the person
holding the option, aside from the consideration for the offer.
REYNALDO VILLANUEVA vs. PHILIPPINE NATIONAL BANK
G.R. NO. 154493 December 6, 2006
FACTS:
The Special Assets Management Department (SAMD) of PNB issued an
advertisementfor the sale thru bidding of certain PNB properties including Lot
No. 17, covered by TCT No. T-15042, with an advertised floor price of
P1,409,000.00, and Lot No. 19, covered by TCT No. T-15036, with an advertised
floor price of P2,268,000.00. Bidding was subject to the followingconditions: 1)
that cash bids be submitted not later than April 27, 1989; 2) that said bids
beaccompanied by a 10% deposit in manager‘s or cashier‘s check; and 3) that all
acceptable bids besubject to approval by PNB authorities.
In a June 28, 1990 letter to the Manager, Reynaldo Villanueva offered to
purchase LotNos. 17 and 19 for P3,677,000.00. He also manifested that he
wasdepositing P400,000.00 toshow his good faith but with the understanding that
said amount may be treated as part of thepayment of the purchase price only when
his offer is accepted by PNB. At the bottom of saidletter there appears an
unsigned marginal note stating that P400,000.00 was deposited intoVillanueva‘s
account (Savings Account No. 43612) with PNB-General Santos Branch.
Guevara, the vice-president informed Villanueva that only Lot No. 19 is
available andthat the asking price therefor is P2,883,300.00. PNB also stated that
if quoted price is acceptableto Villanueva, then the latter must submit a revised
offer to purchase. And Sale shall be subjectto its Board of Director’s approval
and to other terms and conditions imposed by the Bank onsale of acquired
assets.
Instead of submitting a revised offer, Villanueva merely inserted at the
bottom ofGuevara‘s letter a July 11, 1990 marginal note, which reads:
C O N F O R M E:
PRICE OF P2,883,300.00 (downpayment of P600,000.00 and the balance
payable intwo (2) years at quarterly amortizations.)
Villanueva paid P200,000.00 to PNB which issued O.R. No. 16997 to
acknowledgereceipt of the ―partial payment deposit on offer to purchase. On the
dorsal portion of OfficialReceipt No. 16997, Villanueva signed a typewritten
note, stating:
This is a deposit made to show the sincerity of my purchase offer with the
understandingthat it shall be returned without interest if my offer is not favorably
considered or be forfeited ifmy offer is approved but I fail/refuse to push through
the purchase.
Also, on July 24, 1990, P380,000.00 was debited from Villanueva‘s
Savings Account No.43612 and credited to SAMD.

12
 On October 11, 1990, however,Guevara wrote Villanueva that upon orders
of the PNBBoard of Directors to conduct another appraisal and public bidding of
Lot No. 19, SAMD isdeferring negotiations with him over said property and
returning his deposit of P580,000.00.Undaunted, Villanueva attempted to deliver
postdated checks covering the balance of thepurchase price but PNB refused the
same.
Hence, Villanueva filed with the RTC a Complaint for specific
performance and damagesagainst PNB. The RTC rendered judgment in favor of
the plaintiff and against the defendantdirecting it to execute a deed of sale in favor
of the plaintiff over Lot 19 comprising afterpayment of the balance in cash in the
amount of P2,303,300.00 and to pay the plaintiffP1,000,000.00 as moral damages;
P500,000.00 as attorney‘s fees, plus litigation expenses andcosts of the suit.
PNB appealed to the CA which reversed and set aside the RTC decision.
ISSUE:
Whether or not a perfected contract of sale exists between petitioner and
respondentPNB.
RULING:
The Court sustained the CA. The CA held that the case at bench, consent,
in respect tothe price and manner of its payment, is lacking. The record shows that
appellant, thru Guevara‘sJuly 6, 1990 letter, made a qualified acceptance of
appellee‘s letter-offer dated June 28, 1990 byimposing an asking price of
P2,883,300.00 in cash for Lot 19. The letter dated July 6, 1990constituted a
counter-offer (Art. 1319, Civil Code), to which appellee made a new proposal,
i.e.,to pay the amount of P2,883,300.00 in staggered amounts, that is,
P600,000.00 as downpaymentand the balance within two years in quarterly
amortizations.
A qualified acceptance, or one that involves a new proposal, constitutes a
counter-offerand a rejection of the original offer (Art. 1319, id.). Consequently,
when something is desiredwhich is not exactly what is proposed in the offer, such
acceptance is not sufficient to generate, consent because any modification or
variation from the terms of the offer annuls the offer.
Appellee‘s new proposal, which constitutes a counter-offer, was not
accepted by appellant, itsboard having decided to have Lot 19 reappraised and
sold thru public bidding.

13
 CATALAN vs. BASA
JULY 31, 2007
FACTS:
On October 20, 1948, FELICIANO CATALAN Feliciano was discharged
from active military service. The Board of Medical Officers of the Department of
Veteran Affairs found that he was unfit to render military service due to his
―schizophrenic reaction, catatonic type, which incapacitates him because of
flattening of mood and affect, preoccupation with worries, withdrawal, and
sparse and pointless speech.
On September 28, 1949, Feliciano married Corazon Cerezo. On June 16,
1951, a document was executed, titled ―Absolute Deed of Donation,
wherein Feliciano allegedly donated to his sister MERCEDES CATALAN one-
half of the real property described, viz:
A parcel of land located at Barangay Basing, Binmaley, Pangasinan.
Bounded on the North by heirs of Felipe Basa; on the South by Barrio Road; On
the East by heirs of Segundo Catalan; and on the West by Roman Basa.
Containing an area of Eight Hundred One (801) square meters, more or less. The
donation was registered with the Register of Deeds. On December 11, 1953,
People‘s Bank and Trust Company filed a Special Proceedings before the Court of
First Instance to declare Feliciano incompetent. On December 22, 1953, the trial
court issued its Order for Adjudication of Incompetency for Appointing Guardian
for the Estate and Fixing Allowance of Feliciano. The following day, the trial
court appointed People‘s Bank and Trust Company as Feliciano‘s guardian.
People‘s Bank and Trust Company has been subsequently renamed, and is
presently known as the Bank of the Philippine Islands (BPI). On November 22,
1978, Feliciano and Corazon Cerezo donated Lots 1 and 3 of their property,
registered under Original Certificate of Title (OCT) No. 18920, to their son
Eulogio Catalan. Mercedes sold the property in issue in favor of her children
Delia and Jesus Basa.
The Deed of Absolute Sale was registered with the Register of Deeds and
a Tax Declaration was issued in the name of respondents. Feliciano and Corazon
Cerezo donated Lot 2 of the aforementioned property registered under OCT No.
18920 to their children Alex Catalan, Librada Catalan and Zenaida Catalan. On
February 14, 1983, Feliciano and Corazon Cerezo donated Lot 4 (Plan Psu-
215956) of the same OCT No. 18920 to Eulogio and Florida Catalan.
BPI, acting as Feliciano‘s guardian, filed a case for Declaration of Nullity
of Documents, Recovery of Possession and Ownership, as well as damages
against the herein respondents. BPI alleged that the Deed of Absolute Donation to
Mercedes was void ab initio, as Feliciano never donated the property to
Mercedes.
In addition, BPI averred that even if Feliciano had truly intended to give
the property to her, the donation would still be void, as he was not of sound
mind and was therefore incapable of giving valid consent. Thus, it claimed that if
the Deed of Absolute Donation was void ab initio, the subsequent Deed of
Absolute Sale to Delia and Jesus Basa should likewise be nullified, for Mercedes
Catalan had no right to sell the property to anyone. BPI raised doubts about the
authenticity of the deed of sale, saying that its registration long after the death of

14
Mercedes Catalan indicated fraud. Thus, BPI sought remuneration for incurred
damages and litigation expenses.
On August 14, 1997, Feliciano passed away. The original complaint was
amended to substitute his heirs in lieu of BPI as complainants in Civil Case No.
17666. The trial court found that the evidence presented by the complainants was
insufficient to overcome the presumption that Feliciano was sane and competent
at the time he executed the deed of donation in favor of Mercedes Catalan. Thus,
the court declared, the presumption of sanity or competency not having been duly
impugned, the presumption of due execution of the donation in question must be
upheld. The Court of Appeals upheld the trial court‘s decision.
ISSUE:
Whether said decision of the lower courts is correct.
RULING:
Petitioners questioned Feliciano‘s capacity at the time he donated the
property, yet did not see fit to question his mental competence when he entered
into a contract of marriage with Corazon Cerezo or when he executed deeds of
donation of his other properties in their favor.
The presumption that Feliciano remained competent to execute contracts,
despite his illness, is bolstered by the existence of these other contracts.
Competency and freedom from undue influence, shown to have existed in the
other acts done or contracts executed, are presumed to continue until the contrary
is shown.
Needless to state, since the donation was valid, Mercedes had the right to
sell the property to whomever she chose. Not a shred of evidence has been
presented to prove the claim that Mercedes‘ sale of the property to her children
was tainted with fraud or falsehood. It is of little bearing that the Deed of Sale
was registered only after the death of Mercedes. What is material is that the sale
of the property to Delia and Jesus Basa was legal and binding at the time of its
execution. Thus, the property in question belongs to Delia and Jesus Basa.
Petitioners raised the issue of prescription and laches for the first time on
appeal beforethis Court. It is sufficient for this Court to note that even if the
present appeal had prospered, theDeed of Donation was still a voidable, not a
void, contract. As such, it remained binding as itwas not annulled in a proper
action in court within four years.IN VIEW WHEREOF, there being no merit in
the arguments of the petitioners, thepetition is DENIED. The CA decision was
affirmed in toto.

15
 DOMINGO VS COURT OF APPEALS
G.R. NO. 104818, SEPTEMBER 17, 1993

FACTS:
Roberto Domingo married Delia Soledad in 1976 while being married
with Emerlina dela Paz.
He has been unemployed and completely dependent upon Delia, who has
been working in Saudi Arabia, for support and subsistence.
Delia only found out about the prior marriage when Emerlina sued them
for bigamy in 1983.
In 1989, she found out that Roberto was cohabiting with another woman
and he was disposing of some of her properties without her knowledge and
consent.
In May 1991, Delia filed a petition for judicial declaration of nullity of her
marriage to Roberto and separation of property.

ISSUE:
Whether or not a petition for judicial declaration of a void marriage is necessary.
If in affirmative, whether the same should be filed only for purpose of remarriage.

RULING:
Yes. A declaration of the absolute nullity of marriage is now explicitly
required either as a cause of action or a ground for defense. Where the absolute
nullity of a previous marriage is sought to be invoked for purpose of contracting a
second marriage, the sole basis acceptable in law for the said projected marriage
be free from legal infirmity is a final judgment declaring the previous marriage
void.
The requirement for a declaration of absolute nullity of a marriage is also
for the protection of the spouse who, believing that his or her marriage is illegal
and void, marries again. With the judicial declaration of the nullity of his or her
first marriage, the person who marries again cannot be charged with bigamy.
Article 40 as finally formulated included the significant clause denotes
that final judgment declaring the previous marriage void need not be obtained
only for purposes of remarriage. A person can conceive of other instances other
than remarriage, such as in case of an action for liquidation, partition, distribution
and separation of property between the spouses, as well as an action for the
custody and support of their common children and the delivery of the latters'
presumptive legitimes. In such cases, however, one is required by law to show
proof that the previous one was an absolute nullity.
Marriage is an “inviolable social institution, is the foundation of the
family;” as such, it “shall be protected by the State. As a matter of policy, there
should be a final judgment declaring the marriage void and a party should not
declare for himself or herself whether or not the marriage is void.

16
 MENDOZANA, ET AL. V. OZAMIZ ET AL.
G.R. No. 143370, February 6, 2002
FACTS:
Petitioner spouses Mario J. Mendezona and Teresita M. Mendezona, petitioner
spouses Luis J. Mendezona and Maricar L. Mendezona, and petitioner Teresita
Adad Vda. de Mendezona own a parcel of land each with almost similar areas of
3,462 square meters, 3,466 square meters and 3,468 square meters. The
petitioners ultimately traced their titles of ownership over their respective
properties from a notarized Deed of Absolute Sale executed in their favor by
Carmen Ozamiz.
The petitioners initiated the suit to remove a cloud on their said respective
titles caused by the inscription thereon. The respondents opposed the petitioners‘
claim of ownership of the said parcels of land alleging that the titles issued in the
petitioners‘ names are defective and illegal, and the ownership of the said
property was acquired in bad faith and without value inasmuch as the
consideration for the sale is grossly inadequate and unconscionable.
Respondents further alleged that at the time of the sale as alleged, Carmen
Ozamiz was already ailing and not in full possession of her mental faculties; and
that her properties having been placed in administration, she was in effect
incapacitated to contract with petitioners. They argue that the Deed of Absolute
sale is a simulated contract.
ISSUE:
Whether or not the Deed of Absolute Sale in the case at bar was simulated.
RULING:
The Court ruled that the Deed in the case at bar is not a simulated contract.
Simulation is defined as ―the declaration of a fictitious will, deliberately made
by agreement of the parties, in order to produce, for the purposes of deception, the
appearances of a juridical act which does not exist or is different from what that
which was really executed.‖ The requisites of simulation are:
(a) an outward declaration of will different from the will of the parties;
(b) the false appearance must have been intended by mutual agreement;
and
(c) the purpose is to deceive third persons.
None of these were clearly shown to exist in the case at bar. The Deed of
Absolute Sale is a notarized document duly acknowledged before a notary public.
As such, it has in its favor the presumption of regularity, and it carries the
evidentiary weight conferred upon it with respect to its due execution. It is
admissible in evidence without further proof of its authenticity and is entitled to
full faith and credit upon its face. The burden fell upon the respondents to prove
their allegations attacking the validity and due execution of the said Deed of
Absolute Sale.

17
 Respondents failed to discharge that burden; hence, the presumption in
favor of the said deed stands.

ROSA LIM vs. CA

G.R. No. 102784. February 28, 1996

FACTS:
Lim, who arrived from Cebu, received from Suarez 2 pieces of jewelry: a
diamond ring and a bracelet to be sold on commission basis. Lim returned the
bracelet to Suarez, but failed to return the diamond ring or to turn over the
proceeds thereof if sold. Suarez wrote a demand letter asking for the return of the
ring or the proceeds of the sale thereof. Lim, however, alleges that she had
returned both the ring and the bracelet, hence she no longer has any liability.
Lim has a different version of the facts. She denies the transaction was for
her to sell the 2 pieces of jewelry on commission basis. She told Suarez that she
would consider buying the pieces of jewelry for her own use. Lim took the pieces
of jewelry and asked Suarez to prepare the necessary papers for her to sign
because she was not yet prepared to buy it. The document was prepared, and Lim
signed it, but she claims that she didn’t agree to the terms of the receipt regarding
the sale on commission basis. Her ‘proof’ is that she signed the document on the
upper portion and not at the bottom where a space is provided for the signature of
the persons receiving the jewelry.

ISSUE:
Was the real transaction between Lim & Suarez a real contract of agency
to sell on commission basis as set out in the receipt or a sale on credit?

HELD:
The transaction between them was a contract of agency to sell on
commission basis. Lim’s signature indeed appears on the upper portion of the
receipt below, but this fact doesn’t have the effect of altering the terms of the
transaction form a contract of agency to sell on commission basis to a contract of
sale. The moment she affixed her signature thereon, Lim became bound by all the
terms stipulated in the receipt.
Contracts shall be obligatory in whatever form they may have been
entered into, provided all the essential requisites for their validity are present.
However there are some provisions in law w/c require certain formalities for
particular contracts. The 1st is when the form is required for the validity of the
contract; the 2nd is when it is required to make the contract effective as against
3rd parties; and the 3rd is for the purpose of proving the existence of the contract,
e.g. those included in the Statute of Frauds. A contract of agency to sell on
commission basis doesn’t belong to any of these 3 categories, hence it is valid and
enforceable in whatever form they may be entered into.

18
 There is only 1 type of legal instrument where the law strictly prescribes
the location of the signature of the parties thereto. This is in case of notarial wills.
But in the case at bar, the parties didn’t execute a notarial will but a simple
contract of agency to sell on commission basis, thus making the position of Lim’s
signature immaterial.

RUIZ VS. COURT OF APPEALS

G.R. NO. 146942 APRIL 22, 2003

FACTS:
Petitioner Corazon Ruiz is engaged in the business of buying and selling
jewelry. Sheobtained loans from private respondent Consuelo Torres on different
occasions and in differentamounts. Prior to their maturity, the loans were
consolidated under 1 promissory note worthP750 000 secured by real estate
mortgage of a land registered to petitioner.
Petitioner obtained 3 more loans from private respondent worth P100 000
each. Thesecombined loans of P300 000 were secured by jewelry pledged by
petitioner to private respondentworth P571 000.Petitioner paid the stipulated 3%
monthly interest on the P750 000 loan, amounting toP270 000. After March 1996,
petitioner was unable to make interest payments as she haddifficulties collecting
from her clients in her jewelry business.Because of petitioner‘s failure to pay the
principal loan of P750 000, as well as theinterest payment, private respondent
demanded payment not only of the P750 000 loan but alsoof the P300 000 loan.
When petitioner failed to pay, private respondent sought the extrajudicial
foreclosure of the aforementioned real estate mortgage.
ISSUE:
Whether or not there is undue influence in the signing of the promissory
note.
RULING:
The fact that petitioner and private respondent had entered into not only
one but severalloan transactions shows that petitioner was not in any way
compelled toaccept the termsallegedly imposed by private respondent.
The promissory notes in question did not contain any fine print provision
which couldhave escaped the attention of the petitioner. Petitioner had all the time
to go over and study thestipulations embodied in the promissory notes. These
promissory notes contain similar terms andconditions, with a little variance in the
terms of interests and surcharges. Moreover, petitioner,in her complaint never
claimed that she was forced to sign the subject note.

19
 DELA CRUZ V. SISON
G.R. No. 163770 February 17, 2005

FACTS:
Epifania Dela Cruz alleged that in 1992, she discovered that her rice land in has
been transferred and registered in the name of her nephew, Eduardo C. Sison,
without her knowledge and consent, purportedly on the strength of a Deed of Sale
she executed. Epifania then filed a complaint praying to declare the deed of sale
null and void. She alleged that Eduardo tricked her into signing the Deed of Sale,
by inserting the deed among the documents she signed pertaining to the transfer
of her residential land, house and camarin, in favor of Demetrio, her foster child
and the brother of Eduardo.
Respondents, spouses Eduardo and Eufemia Sison denied that they employed
fraud or trickery in the execution of the Deed of Sale. They claimed that they
purchased the property from Epifania for P20 000 and that the deed was duly
notarized, complied with all requisites for its registration, as evidenced by the
Investigation Report by the Department of Agrarian Reform, Affidavit of
Seller/Transferor, Affidavit of Buyer/Transferee, Certification issued by the
Provincial Agrarian Reform Officer, Letter for the Secretary of Agrarian Reform,
Certificate Authorizing Payment of Capital Gains Tax, and the payment of the
registration fees. Some of these documents even bore the signature of Epifania
which only proves that she agreed to the transfer of the property.
ISSUE:
1.) Whether fraud attended the execution of a contract
2.) Whether the deed of absolute sale is valid.
RULING:
1.) A comparison of the deed of sale in favor of Demetrio and the deed of
sale in favor Eduardo, draws out the conclusion that there was no trickery
employed. One can readily see that the first deed of sale is in all significant
respects different from the second deed of sale. A casual perusal, even by
someone as old as Epifania, would enable one to easily spot the differences.
Epifania could not have failed to miss them. The Court is bound by the appellate
court‘s findings, unless they are contrary to those of the trial court, in which case
we may wade into the factual dispute to settle it with finality.
2.) After a careful perusal of the records, we sustain the Court of Appeals‘
ruling that the Deed of Absolute Sale dated November 24, 1989 is valid.
There being no evidence adduced to support her bare allegations, thus, Epifania
failed to satisfactorily establish her inability to read and understand the English
language. Although Epifania was 79 years old at the time of the execution of the
assailed contract, her age did not impair her mental faculties as to prevent her

20
from properly and intelligently protecting her rights. Even at 83 years, she
exhibited mental astuteness when she testified in court. It is, therefore,
inconceivable for her to sign the assailed documents without ascertaining their
contents, especially if, as she alleges, she did not direct Eduardo to prepare the
same.

RURAL BANK OF ST. MARIA, PANGASINAN V. COURT OF APPEALS

G.R. No. 110672. September 14, 1999

FACTS:
Real Estate Mortgage as a security for loans obtained amounting to P156
270 was executed by Manuel Behis on a land in favor of Rural Bank of St. Maria,
Pangasinan. But Manuel, being a delinquent, sold the land, evidenced by a Deed
of Absolute Sale with Assumption of Mortgage to Rayandayan and Arceño for the
sum of P250 000. On the same day, Rayandayan and Arceño, together with
Manual Behis executed another Agreement embodying the consideration of the
sale of the land in the sum of P2.4 million. The land, however, remained in the
name of Behis because the former did not present to the Register of Deeds the
contracts.
Rayandaran and Arceño presented the Deed of Absolute Sale to the bank and
negotiated with the principal stockholder of the bank for the assumption of the
indebtedness of Manuel Behis and the subsequent release of the mortgage on the
property by the bank. Rayandaran and Arceño did not show to the bank the
agreement with Manuel Behis providing for the real consideration of P2.4 million.
Subsequently, the bank consented to the substitution of plaintiffs as mortgage
debtors in place of Manuel Behis in a Memorandum of Agreement between
private respondents and the bank with restricted and liberalized terms for the
payment of the mortgage debt including the initial payment of P143 782.22.
Due to the appearance of Christina Behis, Manuel‘s wife and a co-
signatory in themortgaged land alleging that her signature in the deed of sale was
forged, the bank discontinuedto comply with the Memorandum of Agreement
considering it to be void.
In a letter, plaintiffs demanded that the bank comply with its obligation
under theMemorandum of Agreement to which the latter denied. Petitioner bank
argued that theMemorandum of Agreement is voidable on the ground that its
consent to enter said agreementwas vitiated by fraud because private respondents
withheld from petitioner bank the materialinformation that the real consideration
for the sale with assumption of mortgage of the propertyby Manuel Behis to
Rayandayan and Arceño is P2,400,000.00, and not P250,000.00 asrepresented to
petitioner bank.
According to petitioner bank, had it known for the realconsideration for
the sale, i.e. P2.4 million, it would not have consented into entering
theMemorandum of Agreement with Rayandayan and Arceño as it was put in the
dark as to the realcapacity and financial standing of private respondents to assume
the mortgage from ManuelBehis.
ISSUE:

21
 Whether or not there existed a fraud in the case at bar.
RULING:
The Court ruled that there was no fraud in the case at bar. It is believed
that the nondisclosure to the bank of the purchase price of the sale of the land
between private respondentsand Manuel Behis cannot be the ―fraud
contemplated by Article 1338 of the Civil Code.The kind of fraud that will vitiate
a contract refers to those insidious words ormachinations resorted to by one of the
contracting parties to induce to the other to enter into acontract which without
them he would not have agreed to. Simply stated, the fraud must bedetermining
cause of the contract, or must have caused the consent to be given.
Pursuant to Art. 1339 of the Code, silence or concealment, by itself, does
not constitutefraud unless there is a special duty to disclose certain facts. In the
case at bar, privaterespondents had no duty to do such.
From the sole reason submitted by the petitioner bank that it was kept in
the dark as to thefinancial capacity of private respondents, the Court cannot see
how the omission or concealmentof the real purchase price could have induced
the bank into giving its consent to the agreement;or that the bank would not have
otherwise given its consent had it known of the real purchaseprice.

22
 CARABEO VS DINGCO
G.R. No. 190823, April 04, 2011

FACTS:
On July 10, 1990, Domingo Carabeo (petitioner) entered into a contract
denominated as "Kasunduan sa Bilihan ng Karapatan sa Lupa" with Spouses
Norberto and Susan Dingco (respondents) whereby petitioner agreed to sell his
rights over a 648 square meter parcel of unregistered land situated in Purok III,
Tugatog, Orani, Bataan to respondents for P38,000.
Respondents tendered their initial payment of P10,000 upon signing of the
contract, the remaining balance to be paid on September 1990. Respondents were
later to claim that when they were about to hand in the balance of the purchase
price, petitioner requested them to keep it first as he was yet to settle an on-going
"squabble" over the land.
Sometime in 1994, respondents learned that the alleged problem over the
land had been settled and that petitioner had caused its registration in his name on
December 21, 1993 under Transfer Certificate of Title No. 161806. They
thereupon offered to pay the balance but petitioner declined, drawing them to file
a complaint before the Katarungan Pambarangay. No settlement was reached,
however, hence, respondent filed a complaint for specific performance before the
Regional Trial Court (RTC) of Balanga, Bataan.
The trial court ruled in favor of respondents. CA affirmed RTC. Hence
this petition.
ISSUE:
Whether or not the CA erred in their decision by favoring respondents.
RULING:
The Supreme Court denied the petition. The court contends that the
KASUNDUAN which pertinent portion reads ― “Na ako ay may isang partial na
lupa na matatagpuan sa Purok 111, Tugatog, Orani Bataan, na may sukat na 27 x
24 metro kuwadrado, ang nasabing lupa ay may sakop na dalawang punong
santol at isang punong mangga, kaya't ako ay nakipagkasundosa mag-asawang
Norby Dingco at Susan Dingco na ipagbili sa kanila ang karapatan ng
nasabinglupa sa halagang P38,000.00”, That the kasunduan did not specify the
technical boundaries of theproperty did not render the sale a nullity. The
requirement that a sale must have for its object adeterminate thing is satisfied as
long as, at the time the contract is entered into, the object of thesale is capable of
being made determinate without the necessity of a new or further
agreementbetween the parties.

23
 As the above-quoted portion of the kasunduan shows, there is no doubt
thatthe object of the sale is determinate. In the present case, respondents are
pursuing a propertyright arising from the kasunduan, whereas petitioner is
invoking nullity of the kasunduan toprotect his proprietary interest. Assuming
arguendo, however, that the kasunduan is deemedvoid, there is a corollary
obligation of petitioner to return the money paid by respondents, andsince the
action involves property rights. The death of a client immediately divests the
counsel ofauthority. Thus, in filing a Notice of Appeal, petitioner's counsel of
record had no personality toact on behalf of the already deceased client who, it
bears reiteration, had not been substituted as aparty after his death.
CHAVEZ VS. PUBLIC ESTATES AUTHORITY
G.R. No. 133250, 9 July 2002

FACTS:
The Senate Blue Ribbon Committee and Committee on Accountability of
Public Officers conducted public hearings to determine the actual market value of
the public lands along Roxas Boulevard under controversy. The investigation
found out that the sale of such was lands grossly undervalued based on official
documents submitted by the proper government agencies during the
investigations. It was found out that the Public Estates Authority, under the Joint
Venture Agreement, sold it to Amari Coastal Bay Development Corporation
157.84 hectares of eclaimed public lands totaling to P 1.89 B or P 1,200 per
square meter.
However during the investigation process, the BIR pitted the value at
P7,800 per square meter, while the Municipal Assessor of Parañaque at P 6,000
per square meter and by the Commission on Audit (COA) at P21,333 per square
meter. Based on the official appraisal of the COA, the actual loss on the part of
the government is a gargantuan value of P 31.78 B. However, PEA justified the
purchase price based from the various appraisals of private real estate
corporations, amounting from P 500 – 1,000 per square meter. Further, it was also
found out that there were various offers from different private entities to buy the
reclaimed public land at a rate higher than the offer of Amari, but still, PEA
finalized the JVA with Amari. During the process of investigation, Amari did not
hide the fact that they agreed to pay huge commissions and bonuses to various
persons for professional efforts and services in successfully negotiating and
securing for Amari the JVA.
The amount constituting the commissions and bonuses totaled to a huge
P1.76 B; an indicia of great bribery.
ISSUE:
Whether or not the sale of public lands between PEA and Amari is
constitutional.
RULING:
The Court found that the sale is unconstitutional, because what was sold or
alienated are lands of the public domain. Taking the fact the sold parcel of land is
submerged land is inalienable. As unequivocally stated in Article XII, Section 2
of the Constitution, all lands of the public domain, waters, minerals, coals,
petroleum, forces which are potential energies, fisheries, forests or timber,
wildlife, flora and fauna, and other natural resources, with the exception of

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agricultural lands, are inalienable. Submerged lands fall within the scope of such
provision. Ergo, the submerged lands, being inalienable and outside the
commerce of man, could not be the subject of the commercial transactions
specified in the Amended JVA. Hence, the contract between Amari and the PEA
is void.

MELLIZA VS. CITY OF ILOILO

G.R No. L-24732, April 30, 1968

FACTS:
Juliana Melliza owned three parcels of residential land. She sold to the
Municipality of Iloilo a certain lot to serve as site for the municipal hall. The
donation was however revoked by the parties for the reason that area was found
inadequate to meet the requirements of the development plan. Subsequently the
said lot was divided into several divisions. She then sold her remaining interest on
the said lot to Remedios San Villanueva. Remedios in turn transferred the rights
to said portion of land to Pio Sian Melliza. The transfer Certificate of title in
Melliza‘s name bears on annotation stating that a portion of said lot belongs to the
Municipality of Iloilo.
Later the City of Iloilo donated the city hall site to the University of the
Philippines, Iloilo which fenced the same with iron wires. Pio Sian Melliza then
filed action against Iloilo City and the University of the Philippines for recovery
of the parcel of land or of its value. Petitioner contends that the claimed lot was
not included in those lots which were sold by Juliana Melliza to Iloilo City and
further asserts that the Deed of Sale invalid because the law requires as an
essential element of sale, determinate object, which was blur in the case at bar.
ISSUE:
Whether or not the Deed of Sale should be declared invalid because the
object is not determinate as required by law.
RULING:
Article 1460 of the Civil Code states that the sale must have for its object
a determinate thing, is fulfilled as long as, at the time the contract is entered into,
the object of the sale is cable of being determinate without the necessity of a new
or further agreement between the parties. The specific mention of some of the lots
plus the statement that the lots object of the sale are the ones needed for city hall
site sufficient provides a basis, as of the time, of the execution of the contract, for
rendering determinate said lots without the need of a new further agreement of the
parties.

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 CATINDIG VS. VDA. DE MENESES
G.R. No. 165851 : February 02, 201
FACTS:
The property subject of this controversy pertains to a parcel of land
situated in Malolos, Bulacan, with an area of 49,139 square meters, titled in the
name of the late Rosendo Meneses, Sr., under Transfer Certificate of Title (TCT)
No. T-1749. Respondent Aurora Irene C. Vda. De Meneses is the surviving
spouse of the registered owner, Rosendo Meneses, Sr.. She was issued Letters of
Administration over the estate of her late husband. On May 17, 1995, respondent,
in her capacity as administratrix of her husband's estate, filed a Complaint for
Recovery of Possession, Sum of Money and Damages against petitioners Manuel
Catindig and Silvino Roxas, Sr. before the Regional Trial Court of Malolos,
Bulacan, to recover possession over the Masusuwi Fishpond.
Respondent alleged that in September 1975, petitioner Catindig, the first
cousin of her husband, deprived her of the possession over the Masusuwi
Fishpond, through fraud, undue influence and intimidation.
Petitioner Catindig maintained that he bought the Masusuwi Fishpond
from respondent and her children in January 1978, as evidenced by a Deed of
Absolute Sale. Catindig further argued that even assuming that respondent was
indeed divested of her possession of the Masusuwi Fishpond by fraud, her cause
of action had already prescribed considering the lapse of about 20 years from
1975, which was allegedly the year when she was fraudulently deprived of her
possession over the property.
After trial, the trial court ruled in favor of respondent. The CA dismissed
both the petitioners' appeals and affirmed the RTC.
ISSUE: Whether the Court of Appeals seriously and gravely erred in disregarding
the genuineness and due execution of the deed of absolute sale.
RULING: The Supreme Court denied the petition. The Supreme Court is
convinced that the Deed of Absolute Sale relied upon by the defendants,
petitioners herein is simulated and fictitious and has no consideration. On its face,
the Deed of Absolute sale is not complete and is not in due form. It is a 3-page
document but with several items left unfilled or left blank, like the day the
document was supposed to be entered into, the tax account numbers of the
persons appearing as signatories to the document and the names of the witnesses.

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In other words, it was not witnessed by any one. More importantly, it was not
notarized.
The Court also finds no compelling reason to depart from the court a quo's
finding that respondent never received the consideration stipulated in the
simulated deed of sale. Defendant [petitioner herein] Catindig declared that
plaintiff and her children signed the instrument freely and voluntarily and that the
consideration of P150,000.00 as so stated in the document was paid by him to
plaintiff . However, it is not denied that the title to this property is still in the
name of Rosendo Meneses, Sr., and the owner's duplicate copy of the title is still
in the possession of the plaintiff.
Since it was well established that the Deed of Sale is simulated and,
therefore void, petitioners' claim that respondent's cause of action is one for
annulment of contract, which already prescribed, is unavailing, because only
voidable contracts may be annulled. On the other hand, respondent's defense for
the declaration of the inexistence of the contract does not prescribe.
ORDUA VS. FUENTEBELLA et. Al
G.R. No. 176841 : June 29, 2010

FACTS:
This case involves a residential lot with an area of 74 square meters
located at FairviewSubdivision, Baguio City, originally registered in the name of
Armando Gabriel,Sr. underTransfer Certificate of Title (TCT) No. 67181 of the
Registry of Deeds of Baguio City.
Sometime in 1996 or thereabouts, Gabriel Sr. sold the subject lot to
petitioner AntonitaOrdua, but no formal deed was executed to document the sale.
The contract price was apparentlypayable in installments as Antonita remitted
from time to time and Gabriel Sr. accepted partialpayments. One of the Orduas
would later testify that Gabriel Sr. agreed to execute a final deed ofsale upon full
payment of the purchase price.
In 1979, Antonita and her sons, Dennis and Anthony Ordua, were already
occupying thesubject lot on the basis of some arrangement undisclosed in the
records and even constructedtheir house thereon. They also paid real property
taxes for the house and declared it for taxpurposes, as evidenced by Tax
Declaration in which they place the assessed value of thestructure at PhP 20,090.
After the death of Gabriel Sr., his son and namesake, respondent Gabriel
Jr.,secured TCTNo. T-71499 over the subject lot and continued accepting
payments from the petitioners. OnDecember 12, 1996, Gabriel Jr. wrote Antonita
authorizing her to fence off the said lot and toconstruct a road in the adjacent lot.
On December 13, 1996, Gabriel Jr. acknowledged receipt ofa PhP 40,000
payment from petitioners. Through a letter dated May 1, 1997, Gabriel
Jr.acknowledged that petitioner had so far made an aggregate payment of PhP
65,000, leaving anoutstanding balance of PhP 60,000. A receipt Gabriel Jr. issued
dated November 24, 1997reflected a PhP 10,000 payment. Despite all those
payments made for the subject lot, Gabriel Jr.would later sell it to Bernard Banta
(Bernard) obviously without the knowledge of petitioners.
On July 3, 2001, petitioners, joined by Teresita, filed a Complaint for
Annulment of Title,Reconveyance with Damages against the respondents before

27
the RTC.The RTC ruled for the respondents. The CA dismissed the appeal,
hencethis petition.
ISSUE:
a. Whether or not the sale of the subject lot by Gabriel Sr. to Antonita is
unenforceableunder the Statute of Frauds;
b. Whether or not such sale has adequate consideration;
c. Whether the instant action has already prescribed; and whether or not
respondents arepurchasers in good faith.
RULING:
On the first issue, the court notices that Gabriel Sr., during his lifetime,
sold the subjectproperty to Antonita, the purchase price payable on installment
basis. Gabriel Sr. appeared tohave been a recipient of some partial payments.
After his death, his son duly recognized the saleby accepting payments and
issuing what may be considered as receipts therefor. Gabriel Jr., in agesture
virtually acknowledging the petitioners' dominion of the property, authorized
them toconstruct a fence around it. And no less than his wife, Teresita, testified as
to the fact of sale andof payments received. Eduardo's assertion in his Answer that
"persons appeared in the property"only after "he initiated ejectment proceedings"
is clearly baseless.
On the second issue, the trial court's posture, with which the CA
effectively concurred, ispatently flawed. For starters, they equated incomplete
payment of the purchase price withinadequacy of price or what passes as lesion,
when both are different civil law concepts withdiffering legal consequences, the
first being a ground to rescind an otherwise valid andenforceable contract.
Perceived inadequacy of price, on the other hand, is not a sufficient groundfor
setting aside a sale freely entered into, save perhaps when the inadequacy is
shocking to theconscience. The Court to be sure takes stock of the fact that the
contracting parties to the 1995 or1996 sale agreed to a purchase price of PhP
125,000 payable on installments. But the original lotowner, Gabriel Sr., died
before full payment can be effected. Nevertheless, petitioners continuedremitting
payments to Gabriel, Jr., who sold the subject lot to Bernard on June 30, 1999.
Gabriel,Jr., as may be noted, parted with the property only for PhP 50,000. On the
other hand, Bernardsold it for PhP 80,000 to Marcos and Benjamin. From the
foregoing price figures, what isabundantly clear is that what Antonita agreed to
pay Gabriel, Sr., albeit in installment, was verymuch more than what his son, for
the same lot, received from his buyer and the latter's buyerlater. The Court,
therefore, cannot see its way clear as to how the RTC arrived at its
simplisticconclusion about the transaction between Gabriel Sr. and Antonita being
without "adequateconsideration."
On the third issue, the court finds no quibbling about the fraudulent nature
of theconveyance of the subject lot effected by Gabriel Jr. in favor of Bernard. It
is understandable thatafter his father's death, Gabriel Jr. inherited subject lot and
or which he was issued TCT No. T-71499. Since the Gabriel Sr. - Antonita sales
transaction called for payment of the contract pricein installments, it is also
understandable why the title to the property remained with the Gabriels.And after
the demise of his father, Gabriel Jr. received payments from the Orduas and
evenauthorized them to enclose the subject lot with a fence. In sum, Gabriel Jr.
knew fully well aboutthe sale and is bound by the contract as predecessor-in-

28
interest of Gabriel Sr. over the propertythus sold. The prescriptive period for the
reconveyance of fraudulently registered real property is10 years, reckoned from
the date of the issuance of the certificate of title, if the plaintiff is not
inpossession, but imprescriptible if he is in possession of the property. Thus, one
who is in actualpossession of a piece of land claiming to be the owner thereof
may wait until his possession isdisturbed or his title is attacked before taking steps
to vindicate his right. As it is, petitioners'action for reconveyance is
imprescriptible.
In view of this case, the court ruled that petitioner Antonita Ordua is
recognized to havethe right of ownership over subject lot covered by TCT No. T-
3276 of the Baguio Registryregistered in the name of Eduardo J. Fuentebella and
therefore granted the petition and set asidethe decision of the lower court.

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