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Heirs of Jesus Mascunana v. CA the deed that the title to the property remained with the vendor, or
G.R. NO. 145330 (March) that the right to unilaterally resolve the contract upon the buyer’s
failure to pay within a fixed period was given to such vendor. Patently,
FACTS OF THE CASE: Facts of the Case the contract executed by the parties is a deed of sale and not a
The spouses Gomer and Leonor Ramos own a parcel of land, consisting Masunana bought a parcel of land from the Wuthrich siblings. Part of contract to sell. As the Court ruled in a recent case:
of 1,883 square meters, of the Register of Deeds of Cagayan de Oro which Mascunana, he later sold to Sumilhig.
City. On 18 February 1980, the spouses Ramos made an agreement The contract price is 4,690 with 3,690 as down payment. Their In Dignos v. Court of Appeals (158 SCRA 375), we have said that,
with the spouses Santiago and Minda Heruela covering 306 square agreement says: although denominated a “Deed of Conditional Sale,” a sale is still
meters of the land . According to the spouses Ramos, the agreement is absolute where the contract is devoid of any proviso that title is
a contract of conditional sale. The spouses Heruela allege that the That the balance of ONE THOUSAND PESOS (P1,000.00) shall be paid by reserved or the right to unilaterally rescind is stipulated, e.g., until or
contract is a sale on installment basis. the VENDEE unto the VENDOR as soon as the above-portions of Lot unless the price is paid. Ownership will then be transferred to the
124 shall have been surveyed in the name of the VENDEE and all papers buyer upon actual or constructive delivery (e.g. by the execution of a
On 27 January 1998, the spouses Ramos filed a complaint for Recovery pertinent and necessary to the issuance of a separate Certificate of public document) of the property sold.
of Ownership with Damages against the spouses Heruela. The spouses Title in the name of the VENDEE shall have been prepared.
Ramos allege that out of the P15,300 consideration for the sale of the Where the condition is imposed upon the perfection of the contract
land, the spouses Heruela paid only P4,000. The last installment that Sumilhig later sold the same lot to Layumas. Years after, Layumas itself, the failure of the condition would prevent such perfection. If the
the spouses Heruela paid was on 18 December 1981. The spouses wrote to the heirs of Mascunana (since Mascunana died already) condition is imposed on the obligation of a party which is not fulfilled,
Ramos assert that the spouses Heruela's unjust refusal to pay the offering to pay the 1,000 balance of the purchase price of the property. the other party may either waive the condition or refuse to proceed
balance of the purchase price caused the cancellation of the Deed of The addressee, however, refused to receive the mail matter. with the sale. (Art. 1545, Civil Code).
Conditional Sale. In June 1982, the spouses Ramos discovered that the Heirs Mascunana then filed a complaint for recovery of possession
spouses Heruela were already occupying a portion of the land. Cherry against Barte ( an individual whom Layumas allowed to stay on the Thus, in one case, when the sellers declared in a “Receipt of Down
and Raymond Pallori ("spouses Pallori"), daughter and son-in-law, subject property). Payment” that they received an amount as purchase price for a house
respectively, of the spouses Heruela, erected another house on the and lot without any reservation of title until full payment of the entire
land. The spouses Heruela and the spouses Pallori refused to vacate the Issue: WON the contract of alienation of the subject lot in favor of purchase price, the implication was that they sold their property. In
land despite demand by the spouses Ramos. Sumilhig was a contract to sell or a contract of People’s Industrial and Commercial Corporation v. Court of Appeals, it
ISSUE: sale was stated:.
1.WHETHER THE OWNER-PETITIONER CAN RECOVER THEIR
OWNERSHIP OF THE PROPERTY FROM BUYER-RESPONDENTS Held: Sale A deed of sale is considered absolute in nature where there is neither a
HELD: stipulation in the deed that title to the property sold is reserved in the
No. The sale is an installment. Applying the Maceda Law or R.A. 6552, Article 1458 of the New Civil Code provides: seller until full payment of the price, nor one giving the vendor the
which involves sale on real property, in case where less than two years By the contract of sale, one of the contracting parties obligates himself right to unilaterally resolve the contract the moment the buyer fails to
of installments were paid, the vendor-respondent shall give the buyer a to transfer the ownership of and to deliver a determinate thing, and pay within a fixed period.
grace period of not less than sixty days from the date the installment the other to pay therefor a price certain in money or its equivalent. Applying these principles to this case, it cannot be gainsaid that the
became due. If the buyer fails to pay the installments due at the A contract of sale may be absolute or conditional. contract of sale between the parties is absolute, not conditional. There
expiration of the grace period, the seller may cancel the contract after is no reservation of ownership nor a stipulation providing for a
thirty days from receipt by the buyer of the notice of cancellation or Thus, there are three essential elements of sale, to wit: unilateral rescission by either party. In fact, the sale was consummated
the demand for rescission of the contract by a notarial act. The spouses a) Consent or meeting of the minds, that is, consent to transfer upon the delivery of the lot to respondent. Thus,
Heruela paid less than two years of installments. However, there was ownership in exchange for the price; Art. 1477 provides that the ownership of the thing sold shall be
neither a notice of cancellation nor demand for rescission by notarial b) Determinate subject matter; and transferred to the vendee upon the actual or constructive delivery
act to the spouses Heruela . The spouses Heruela shall pay the spouses c) Price certain in money or its equivalent. thereof.
Ramos P11,300 as balance of the purchase price plus interest at 6%.
Upon payment, the spouses Ramos shall execute a deed of absolute In this case, there was a meeting of the minds between the vendor and The condition in the deed that the balance of P1,000.00 shall be paid to
sale of the land and deliver the certificate of title in favor of the the vendee, when the vendor undertook to deliver and transfer the vendor by the vendee as soon as the property sold shall have been
spouses Heruela. In case of failure to thus pay within 60 days from ownership over the property covered by the deed of absolute sale to surveyed in the name of the vendee and all papers pertinent and
finality of this Decision, the spouses Heruela and the spouses Pallori the vendee for the price of P4,690.00 of which P3,690.00 was paid by necessary to the issuance of a separate certificate of title in the name
shall immediately vacate the premises without need of further the vendee to the vendor as down payment. The vendor undertook to of the vendee shall have been prepared is not a condition which
demand, and the down payment and installment payments of P4,000 have the property sold, surveyed and segregated and a separate title prevented the efficacy of the contract of sale. It merely provides the
paid by the spouses Heruela shall constitute rental for the land; therefor issued in the name of the vendee, upon which the latter would manner by which the total purchase price of the property is to be paid.
be obliged to pay the balance of P1,000.00. There was no stipulation in The condition did not prevent the contract from being in full force and
effect:
26. Double sale; good faith in recording of second sale, not in buying
In a case of double sale, what finds relevance and materiality is not
whether or not the second buyer was a buyer in good faith but
whether or not said second buyer registers such second sale in good
faith, that is, without knowledge of any defect in the title of the
property sold. In the present case, Mabanag could not have in good
faith registered the sale entered into on 18 February 1985 because as
early as 22 February 1985, a notice of lis pendens had been annotated
on the TCT in the names of petitioners, whereas Mabanag registered
the said sale sometime in April 1985. At the time of registration,
therefore, petitioner knew that the same property had already been
NABUS VS.PACSON Further, as found by the trial court, Joaquin Pacson’s non-signing of the
second page of a carbon copy of the Deed of Conditional
G.R. NO. 161318 Sale was through sheer inadvertence, since the original contract and
NOVEMBER 25, 2009 the other copies of the contract were all signed by Joaquin Pacson and
FACTS: the other parties to the contract.
In 1977, the spouses Nabus executed a Deed of
Conditional Sale (DOCS) in favor of the Spouses Pacson. 2. The DOCS was a contract to sell, and because the Pacsons failed to
pay the full price, no obligation arose on the part of the Nabuses.
This deed covered 1,000sqm out of the 1,665sqm land owned by the It is not the title of the contract, but its express terms or stipulations
Nabuses. The deed states that after the Pacsons have paid the full that determine the kind of contract entered into by the parties. In this
consideration of 170k, the corresponding transfer documents shall be case, the contract entitled "Deed of Conditional Sale" is actually a
executed by the Nabuses. The Pacsons thereafter occupied the land contract to sell. The contract stipulated that "as soon as the full
and built an auto shop thereon. consideration of the sale has been paid by the vendee, the
In 1977, Bate Nabus died,leaving Julie Nabus and her daughter Michelle corresponding transfer documents shall be executed by the vendor to
to execute a Deed of Extrajudicial Settlement over the property. Anew the vendee for the portion sold."
TCT was issued in their names in 1984. Where the vendor promises to execute a deed of absolute sale upon
By 1984, the Pacsons have made 364 payments, leaving a balance the completion by the vendee of the payment of the price,the contract
of57k. is only a contract to sell." The aforecited stipulation shows that the
Sometime later, Julie Nabus approached Joaquin Pacson for the vendors reserved title to the subject property until full payment of the
remaining balance. purchase price.
While the Pacsons claimed they were ready to pay the balance, they Unfortunately for the Spouses Pacson, since the Deed of Conditional
asked Nabus to return in 4 days as they wanted to make sure of the Sale executed in their favor was merely a contract to sell, the obligation
remaining balance; wanted to see the new deeds issued in the of the seller to sell becomes demandable only upon the happening of
Nabuses’ name; wanted to see the guardianship papers of the Nabus the suspensive condition. The full payment of the purchase price is the
child. However, Julie Nabus did not return. positive suspensive condition, the failure of which is not a breach of
The Pacsons later discovered that the entire lothad been sold to a Betty contract, but simply an event that prevented the obligation of the
Tolero, and that a new title had been issued in Tolero’s name. vendor to convey title from acquiring binding force.
Aggrieved they prayed to annul Tolero’s title, as well as of the other Thus, for its non-fulfillment, there is no contract to speak of, the
documents issued to the Nabuses. obligor having failed to perform the suspensive condition which
Intheir defense, the Nabuses claimed that their DoCS was converted in enforces a juridical relation. With this circumstance, there can be no
a contract of lease, as Joaquin Pacson had misgivings about buying the rescission or fulfillment of an obligation that is still non-existent, the
land after knowing that it was in dispute. suspensive condition not having occurred as yet.
They also claimed that Pacson’s signature in apage of the contract was Emphasis should be made that the breach contemplated in Article 1191
absent. of the New Civil Code is the obligor’s failure to comply with an
The RTC and the CA both ruled in favor of the Pacsons and ordered the obligation already extant, not a failure of a condition to render binding
execution of a Deed of Absolute Sale in favor of the Pacsons, upon their that obligation.
payment of the full purchase price. Therefore, since the Pacsons failed to fulfill the suspensive condition,
The Nabuses appealed. the obligation on the part of the Nabuses to sell them the land never
arose, and the Nabuses were well within their rights when they sold
ISSUES: the land to Tolero. The Pacsons, of course, are entitled to
1.WON the DOCS was converted to a Contract of Lease? reimbursement.
NO.
2.What is the nature of the contract between the Nabuses and the
Pacsons? CONTRACT TO SELL
HELD:
1. The DOCS was not converted to a Contract of Lease.
The receipts issued to the Pacsons contained the phrase “as partial
payment to lot” evidencing the intentof sale, rather than of lease.
SECOND DIVISION covered by the first sale executed in 1954 and to have access to his their interest in the property and register the same. 16 Flores
fishpond from the provincial road. 10 The deed was signed by Eduardo suggested the preparation of a subdivision plan to be able to segregate
[G.R. No. 125585. June 8, 2005.] himself and his wife Engracia Aniceto, together with Eduardo the area purchased by Ricardo from Eduardo and have the same
Manlapat, Jr. and Patricio Manlapat. The same was also duly notarized covered by a separate title. 17
HEIRS OF EDUARDO MANLAPAT, represented by GLORIA MANLAPAT- on 18 July 1981 by Notary Public Arsenio Guevarra. 11
BANAAG and LEON M. BANAAG, JR., petitioners, vs. HON. COURT OF Thereafter, the Cruzes solicited the opinion of Ricardo Arandilla
APPEALS, RURAL BANK OF SAN PASCUAL, INC., and JOSE B. SALAZAR, In December 1981, Leon Banaag, Jr. (Banaag), as attorney-in-fact of his (Arandilla), Land Registration Officer, Director III, Legal Affairs
CONSUELO CRUZ and ROSALINA CRUZ-BAUTISTA, and the REGISTER father-in-law Eduardo, executed a mortgage with the Rural Bank of San Department, Land Registration Authority at Quezon City, who agreed
OF DEEDS of Meycauayan, Bulacan, respondents. Pascual, Obando Branch (RBSP), for P100,000.00 with the subject lot as with the advice given by Flores. 18 Relying on the suggestions of Flores
collateral. Banaag deposited the owner's duplicate certificate of OCT and Arandilla, the Cruzes hired two geodetic engineers to prepare the
(FULL TEXT) No. P-153(M) with the bank. ADCSEa corresponding subdivision plan. The subdivision plan was presented to
the Land Management Bureau, Region III, and there it was approved by
DECISION On 31 August 1986, Ricardo died without learning of the prior issuance a certain Mr. Pambid of said office on 21 July 1989.
of OCT No. P-153(M) in the name of Eduardo. 12 His heirs, the Cruzes,
TINGA, J p: were not immediately aware of the consummated sale between After securing the approval of the subdivision plan, the Cruzes went
Eduardo and Ricardo. back to RBSP and again asked for the owner's duplicate certificate from
Before this Court is a Rule 45 petition assailing the Decision 1 dated 29 Salazar. The Cruzes informed him that the presentation of the owner's
September 1994 of the Court of Appeals that reversed the Decision 2 Eduardo himself died on 4 April 1987. He was survived by his heirs, duplicate certificate was necessary, per advise of the Register of Deeds,
dated 30 April 1991 of the Regional Trial Court (RTC) of Bulacan, Branch Engracia Aniceto, his spouse; and children, Patricio, Bonifacio, Eduardo, for the cancellation of the OCT and the issuance in lieu thereof of two
6, Malolos. The trial court declared Transfer Certificates of Title (TCTs) Corazon, Anselmo, Teresita and Gloria, all surnamed Manlapat. 13 separate titles in the names of Ricardo and Eduardo in accordance with
No. T-9326-P(M) and No. T-9327-P(M) as void ab initio and ordered the Neither did the heirs of Eduardo (petitioners) inform the Cruzes of the the approved subdivision plan. 19 Before giving the owner's duplicate
restoration of Original Certificate of Title (OCT) No. P-153(M) in the prior sale in favor of their predecessor-in-interest, Ricardo. Yet certificate, Salazar required the Cruzes to see Atty. Renato Santiago
name of Eduardo Manlapat (Eduardo), petitioners' predecessor-in- subsequently, the Cruzes came to learn about the sale and the issuance (Atty. Santiago), legal counsel of RBSP, to secure from the latter a
interest. of the OCT in the name of Eduardo. clearance to borrow the title. Atty. Santiago would give the clearance
on the condition that only Cruzes put up a substitute collateral, which
Upon learning of their right to the subject lot, the Cruzes immediately they did. 20 As a result, the Cruzes got hold again of the owner's
The controversy involves Lot No. 2204, a parcel of land with an area of
tried to confront petitioners on the mortgage and obtain the surrender duplicate certificate.
1,058 square meters, located at Panghulo, Obando, Bulacan. The
property had been originally in the possession of Jose Alvarez, of the OCT. The Cruzes, however, were thwarted in their bid to see the
Eduardo's grandfather, until his demise in 1916. It remained heirs. On the advice of the Bureau of Lands, NCR Office, they brought After the Cruzes presented the owner's duplicate certificate, along with
unregistered until 8 October 1976 when OCT No. P-153(M) was issued the matter to the barangay captain of Barangay Panghulo, Obando, the deeds of sale and the subdivision plan, the Register of Deeds
in the name of Eduardo pursuant to a free patent issued in Eduardo's Bulacan. During the hearing, petitioners were informed that the Cruzes cancelled the OCT and issued in lieu thereof TCT No. T-9326-P(M)
name 3 that was entered in the Registry of Deeds of Meycauayan, had a legal right to the property covered by OCT and needed the OCT covering 603 square meters of Lot No. 2204 in the name of Ricardo and
Bulacan. 4 The subject lot is adjacent to a fishpond owned by one for the purpose of securing a separate title to cover the interest of TCT No. T-9327-P(M) covering the remaining 455 square meters in the
Ricardo Cruz (Ricardo), predecessor-in-interest of respondents Ricardo. Petitioners, however, were unwilling to surrender the OCT. 14 name of Eduardo. 21
Consuelo Cruz and Rosalina Cruz-Bautista (Cruzes). 5
Having failed to physically obtain the title from petitioners, in July On 9 August 1989, the Cruzes went back to the bank and surrendered
On 19 December 1954, before the subject lot was titled, Eduardo sold a 1989, the Cruzes instead went to RBSP which had custody of the to Salazar TCT No. 9327-P(M) in the name of Eduardo and retrieved the
portion thereof with an area of 553 square meters to Ricardo. The sale owner's duplicate certificate of the OCT, earlier surrendered as a title they had earlier given as substitute collateral. After securing the
is evidenced by a deed of sale entitled "Kasulatan ng Bilihang Tuluyan consequence of the mortgage. Transacting with RBSP's manager, Jose new separate titles, the Cruzes furnished petitioners with a copy of TCT
ng Lupang Walang Titulo (Kasulatan)" 6 which was signed by Eduardo Salazar (Salazar), the Cruzes sought to borrow the owner's duplicate No. 9327-P(M) through the barangay captain and paid the real
himself as vendor and his wife Engracia Aniceto with a certain Santiago certificate for the purpose of photocopying the same and thereafter property tax for 1989. 22
Enriquez signing as witness. The deed was notarized by Notary Public showing a copy thereof to the Register of Deeds. Salazar allowed the
Manolo Cruz. 7 On 4 April 1963, the Kasulatan was registered with the Cruzes to bring the owner's duplicate certificate outside the bank The Cruzes also sent a formal letter to Guillermo Reyes, Jr., Director,
Register of Deeds of Bulacan. 8 premises when the latter showed the Kasulatan. 15 The Cruzes Supervision Sector, Department III of the Central Bank of the
returned the owner's duplicate certificate on the same day after having Philippines, inquiring whether they committed any violation of existing
On 18 March 1981, another Deed of Sale 9 conveying another portion copied the same. They then brought the copy of the OCT to Register of bank laws under the circumstances. A certain Zosimo Topacio, Jr. of the
of the subject lot consisting of 50 square meters as right of way was Deeds Jose Flores (Flores) of Meycauayan and showed the same to him Supervision Sector sent a reply letter advising the Cruzes, since the
executed by Eduardo in favor of Ricardo in order to reach the portion to secure his legal opinion as to how the Cruzes could legally protect matter is between them and the bank, to get in touch with the bank for
the final settlement of the case. 23 c) P20,000.00 as attorney's fees; and necessary consequence of its declaration that reconveyance was in
order. As to Flores, his work being ministerial as Deputy Register of the
In October of 1989, Banaag went to RBSP, intending to tender full d) the costs of the suit. Bulacan Registry of Deeds, the trial court absolved him of any liability
payment of the mortgage obligation. It was only then that he learned with a stern warning that he should deal with his future transactions
of the dealings of the Cruzes with the bank which eventually led to the 3. Dismissing the counterclaims. more carefully and in the strictest sense as a responsible government
subdivision of the subject lot and the issuance of two separate titles official. 29
thereon. In exchange for the full payment of the loan, RBSP tried to SO ORDERED." 26
persuade petitioners to accept TCT No. T-9327-P(M) in the name of Aggrieved by the decision of the trial court, RBSP, Salazar and the
Eduardo. 24 The trial court found that petitioners were entitled to the reliefs of Cruzes appealed to the Court of Appeals. The appellate court, however,
reconveyance and damages. On this matter, it ruled that petitioners reversed the decision of the RTC. The decretal text of the decision
As a result, three (3) cases were lodged, later consolidated, with the were bona fide mortgagors of an unclouded title bearing no annotation reads:
trial court, all involving the issuance of the TCTs, to wit: of any lien and/or encumbrance. This fact, according to the trial court,
was confirmed by the bank when it accepted the mortgage THE FOREGOING CONSIDERED, the appealed decision is hereby
(1) Civil Case No. 650-M-89, for reconveyance with damages filed by unconditionally on 25 November 1981. It found that petitioners were reversed and set aside, with costs against the appellees.
the heirs of Eduardo Manlapat against Consuelo Cruz, Rosalina Cruz- complacent and unperturbed, believing that the title to their property,
Bautista, Rural Bank of San Pascual, Jose Salazar and Jose Flores, in his while serving as security for a loan, was safely vaulted in the SO ORDERED. 30
capacity as Deputy Registrar, Meycauayan Branch of the Registry of impermeable confines of RBSP. To their surprise and prejudice, said
Deeds of Bulacan; SHcDAI title was subdivided into two portions, leaving them a portion of 455 The appellate court ruled that petitioners were not bona fide
square meters from the original total area of 1,058 square meters, all mortgagors since as early as 1954 or before the 1981 mortgage,
(2) Civil Case No. 141-M-90 for damages filed by Jose Salazar against because of the fraudulent and negligent acts of respondents and RBSP. Eduardo already sold to Ricardo a portion of the subject lot with an
Consuelo Cruz, et. [sic] al.; and The trial court ratiocinated that even assuming that a portion of the area of 553 square meters. This fact, the Court of Appeals noted, is
subject lot was sold by Eduardo to Ricardo, petitioners were still not even supported by a document of sale signed by Eduardo Jr. and
(3) Civil Case No. 644-M-89, for declaration of nullity of title with privy to the transaction between the bank and the Cruzes which Engracia Aniceto, the surviving spouse of Eduardo, and registered with
damages filed by Rural Bank of San Pascual, Inc. against the spouses eventually led to the subdivision of the OCT into TCTs No. T-9326-P(M) the Register of Deeds of Bulacan. The appellate court also found that
Ricardo Cruz and Consuelo Cruz, et al. 25 and No. T-9327-P(M), clearly to the damage and prejudice of on 18 March 1981, for the second time, Eduardo sold to Ricardo a
petitioners. 27 separate area containing 50 square meters, as a road right-of-way. 31
After trial of the consolidated cases, the RTC of Malolos rendered a Clearly, the OCT was issued only after the first sale. It also noted that
decision in favor of the heirs of Eduardo, the dispositive portion of Concerning the claims for damages, the trial court found the same to the title was given to the Cruzes by RBSP voluntarily, with knowledge
which reads: be bereft of merit. It ruled that although the act of the Cruzes could be even of the bank's counsel. 32 Hence, the imposition of damages
deemed fraudulent, still it would not constitute intrinsic fraud. Salazar, cannot be justified, the Cruzes themselves being the owners of the
WHEREFORE, premised from the foregoing, judgment is hereby nonetheless, was clearly guilty of negligence in letting the Cruzes property. Certainly, Eduardo misled the bank into accepting the entire
rendered: borrow the owner's duplicate certificate of the OCT. Neither the bank area as a collateral since the 603-square meter portion did not
nor its manager had business entrusting to strangers titles mortgaged anymore belong to him. The appellate court, however, concluded that
1. Declaring Transfer Certificates of Title Nos. T-9326-P(M) and T-9327- to it by other persons for whatever reason. It was a clear violation of there was no conspiracy between the bank and Salazar. 33
P(M) as void ab initio and ordering the Register of Deeds, Meycauayan the mortgage and banking laws, the trial court concluded.
Branch to cancel said titles and to restore Original Certificate of Title Hence, this petition for review on certiorari. cISDHE
No. P-153(M) in the name of plaintiffs' predecessor-in-interest Eduardo The trial court also ruled that although Salazar was personally
Manlapat; responsible for allowing the title to be borrowed, the bank could not Petitioners ascribe errors to the appellate court by asking the following
escape liability for it was guilty of contributory negligence. The questions, to wit: (a) can a mortgagor be compelled to receive from the
2. Ordering the defendants Rural Bank of San Pascual, Jose Salazar, evidence showed that RBSP's legal counsel was sought for advice mortgagee a smaller portion of the originally encumbered title
Consuelo Cruz and Rosalina Cruz-Bautista, to pay the plaintiffs Heirs of regarding respondents' request. This could only mean that RBSP partitioned during the subsistence of the mortgage, without the
Eduardo Manlapat, jointly and severally, the following: through its lawyer if not through its manager had known in advance of knowledge of, or authority derived from, the registered owner; (b) can
the Cruzes' intention and still it did nothing to prevent the eventuality. the mortgagee question the veracity of the registered title of the
a) P200,000.00 as moral damages; Salazar was not even summarily dismissed by the bank if he was indeed mortgagor, as noted in the owner's duplicate certificate, and thus,
the sole person to blame. Hence, the bank's claim for damages must deliver the certificate to such third persons, invoking an adverse, prior,
necessarily fail. 28 and unregistered claim against the registered title of the mortgagor; (c)
can an adverse prior claim against a registered title be noted,
The trial court granted the prayer for the annulment of the TCTs as a registered and entered without a competent court order; and (d) can
b) P50,000.00 as exemplary damages;
belief of ownership justify the taking of property without due process thereof. 38 Not only are petitioners the heirs of Eduardo, some of them Petitioners submit as an issue whether a mortgagor may be compelled
of law? 34 were actually parties to the Kasulatan executed in favor of Ricardo. to receive from the mortgagee a smaller portion of the lot covered by
Thus, the annotation of the adverse claim of the Cruzes on the OCT is the originally encumbered title, which lot was partitioned during the
The kernel of the controversy boils down to the issue of whether the no longer required to bind the heirs of Eduardo, petitioners herein. subsistence of the mortgage without the knowledge or authority of the
cancellation of the OCT in the name of the petitioners' predecessor-in- mortgagor as registered owner. This formulation is disingenuous,
interest and its splitting into two separate titles, one for the petitioners Petitioners had no right to constitute baselessly assuming, as it does, as an admitted fact that the mortgagor
and the other for the Cruzes, may be accorded legal recognition given mortgage over disputed portion is the owner of the mortgaged property in its entirety. Indeed, it has
the peculiar factual backdrop of the case. We rule in the affirmative. not become a salient issue in this case since the mortgagor was not the
The requirements of a valid mortgage are clearly laid down in Article owner of the entire mortgaged property in the first place.
Private respondents (Cruzes) own 2085 of the New Civil Code, viz:
the portion titled in their names Issuance of OCT No. P-153(M), improper
ART. 2085. The following requisites are essential to the contracts of
Consonant with law and justice, the ultimate denouement of the pledge and mortgage: It is a glaring fact that OCT No. P-153(M) covering the property
property dispute lies in the determination of the respective bases of mortgaged was in the name of Eduardo, without any annotation of any
the warring claims. Here, as in other legal disputes, what is written (1) That they be constituted to secure the fulfillment of a principal prior disposition or encumbrance. However, the property was
generally deserves credence. obligation; aIcTCS sufficiently shown to be not entirely owned by Eduardo as evidenced
by the Kasulatan. Readily apparent upon perusal of the records is that
A careful perusal of the evidence on record reveals that the Cruzes (2) That the pledgor or mortgagor be the absolute owner of the thing the OCT was issued in 1976, long after the Kasulatan was executed way
have sufficiently proven their claim of ownership over the portion of pledged or mortgaged; back in 1954. Thus, a portion of the property registered in Eduardo's
Lot No. 2204 with an area of 553 square meters. The duly notarized name arising from the grant of free patent did not actually belong to
instrument of conveyance was executed in 1954 to which no less than (3) That the persons constituting the pledge or mortgage have the free him. The utilization of the Torrens system to perpetrate fraud cannot
Eduardo was a signatory. The execution of the deed of sale was disposal of their property, and in the absence thereof, that they be be accorded judicial sanction.
rendered beyond doubt by Eduardo's admission in his Sinumpaang legally authorized for the purpose.
Salaysay dated 24 April 1963. 35 These documents make the Time and again, this Court has ruled that the principle of indefeasibility
affirmance of the right of the Cruzes ineluctable. The apparent Third persons who are not parties to the principal obligation may of a Torrens title does not apply where fraud attended the issuance of
irregularity, however, in the obtention of the owner's duplicate secure the latter by pledging or mortgaging their own property. the title, as was conclusively established in this case. The Torrens title
certificate from the bank, later to be presented to the Register of (emphasis supplied) does not furnish a shied for fraud. 47 Registration does not vest title. It
Deeds to secure the issuance of two new TCTs in place of the OCT, is is not a mode of acquiring ownership but is merely evidence of such
another matter. title over a particular property. It does not give the holder any better
For a person to validly constitute a valid mortgage on real estate, he
right than what he actually has, especially if the registration was done
must be the absolute owner thereof as required by Article 2085 of the
Petitioners argue that the 1954 deed of sale was not annotated on the in bad faith. The effect is that it is as if no registration was made at all.
New Civil Code. 39 The mortgagor must be the owner, otherwise the
OCT which was issued in 1976 in favor of Eduardo; thus, the Cruzes' 48 In fact, this Court has ruled that a decree of registration cut off or
mortgage is void. 40 In a contract of mortgage, the mortgagor remains
claim of ownership based on the sale would not hold water. The Court extinguished a right acquired by a person when such right refers to a
to be the owner of the property although the property is subjected to a
is not persuaded. lien or encumbrance on the land — not to the right of ownership
lien. 41 A mortgage is regarded as nothing more than a mere lien,
thereof — which was not annotated on the certificate of title issued
encumbrance, or security for a debt, and passes no title or estate to
Registration is not a requirement for validity of the contract as thereon. 49
the mortgagee and gives him no right or claim to the possession of the
between the parties, for the effect of registration serves chiefly to bind property. 42 In this kind of contract, the property mortgaged is merely
third persons. 36 The principal purpose of registration is merely to delivered to the mortgagee to secure the fulfillment of the principal Issuance of TCT Nos. T-9326-P(M)
notify other persons not parties to a contract that a transaction obligation. 43 Such delivery does not empower the mortgagee to and T-9327-P(M), Valid
involving the property had been entered into. Where the party has convey any portion thereof in favor of another person as the right to
knowledge of a prior existing interest which is unregistered at the time dispose is an attribute of ownership. 44 The right to dispose includes The validity of the issuance of two TCTs, one for the portion sold to the
he acquired a right to the same land, his knowledge of that prior the right to donate, to sell, to pledge or mortgage. Thus, the predecessor-in-interest of the Cruzes and the other for the portion
unregistered interest has the effect of registration as to him. 37 mortgagee, not being the owner of the property, cannot dispose of the retained by petitioners, is readily apparent from Section 53 of the
whole or part thereof nor cause the impairment of the security in any Presidential Decree (P.D.) No. 1529 or the Property Registration Decree.
Further, the heirs of Eduardo cannot be considered third persons for manner without violating the foregoing rule. 45 The mortgagee only It provides:
purposes of applying the rule. The conveyance shall not be valid against owns the mortgage credit, not the property itself. 46
any person unless registered, except (1) the grantor, (2) his heirs and SEC 53. Presentation of owner's duplicate upon entry of new certificate.
devisees, and (3) third persons having actual notice or knowledge — No voluntary instrument shall be registered by the Register of
Deeds, unless the owner's duplicate certificate is presented with such Further, the law on the matter, specifically P.D. No. 1529, has no A mortgagee can rely on what appears on the certificate of title
instrument, except in cases expressly provided for in this Decree or explicit requirement as to the manner of acquiring the owner's presented by the mortgagor and an innocent mortgagee is not
upon order of the court, for cause shown. IDCcEa duplicate for purposes of issuing a TCT. This led the Register of Deeds expected to conduct an exhaustive investigation on the history of the
of Meycauayan as well as the Central Bank officer, in rendering an mortgagor's title. This rule is strictly applied to banking institutions. A
The production of the owner's duplicate certificate, whenever any opinion on the legal feasibility of the process resorted to by the Cruzes. mortgagee-bank must exercise due diligence before entering into said
voluntary instrument is presented for registration, shall be conclusive Section 53 of P.D. No. 1529 simply requires the production of the contract. Judicial notice is taken of the standard practice for banks,
authority from the registered owner to the Register of Deeds to enter a owner's duplicate certificate, whenever any voluntary instrument is before approving a loan, to send representatives to the premises of the
new certificate or to make a memorandum of registration in presented for registration, and the same shall be conclusive authority land offered as collateral and to investigate who the real owners
accordance with such instrument, and the new certificate or from the registered owner to the Register of Deeds to enter a new thereof are. 52
memorandum shall be binding upon the registered owner and upon all certificate or to make a memorandum of registration in accordance
persons claiming under him, in favor of every purchaser for value and with such instrument, and the new certificate or memorandum shall be Banks, indeed, should exercise more care and prudence in dealing even
in good faith. binding upon the registered owner and upon all persons claiming under with registered lands, than private individuals, as their business is one
him, in favor of every purchaser for value and in good faith. affected with public interest. Banks keep in trust money belonging to
In all cases of registration procured by fraud, the owner may pursue all their depositors, which they should guard against loss by not
his legal and equitable remedies against the parties to such fraud Quite interesting, however, is the contention of the heirs of Eduardo committing any act of negligence that amounts to lack of good faith.
without prejudice, however, to the rights of any innocent holder of the that the surreptitious lending of the owner's duplicate certificate Absent good faith, banks would be denied the protective mantle of the
decree of registration on the original petition or application, any constitutes fraud within the ambit of the third paragraph of Section 53 land registration statute, Act 496, which extends only to purchasers for
subsequent registration procured by the presentation of a forged which could nullify the eventual issuance of the TCTs. Yet we cannot value and good faith, as well as to mortgagees of the same character
duplicate certificate of title, or a forged deed or instrument, shall be subscribe to their position. and description. 53 Thus, this Court clarified that the rule that persons
null and void. (emphasis supplied) dealing with registered lands can rely solely on the certificate of title
Impelled by the inaction of the heirs of Eduardo as to their claim, the does not apply to banks. 54
Petitioners argue that the issuance of the TCTs violated the third Cruzes went to the bank where the property was mortgaged. Through
paragraph of Section 53 of P.D. No. 1529. The argument is baseless. It its manager and legal officer, they were assured of recovery of the Bank Liable for Nominal Damages
must be noted that the provision speaks of forged duplicate certificate claimed parcel of land since they are the successors-in-interest of the
of title and forged deed or instrument. Neither instance obtains in this real owner thereof. Relying on the bank officers' opinion as to the Of deep concern to this Court, however, is the fact that the bank lent
case. What the Cruzes presented before the Register of Deeds was the legality of the means sought to be employed by them and the the owner's duplicate of the OCT to the Cruzes when the latter
very genuine owner's duplicate certificate earlier deposited by Banaag, suggestion of the Central Bank officer that the matter could be best presented the instruments of conveyance as basis of their claim of
Eduardo's attorney-in-fact, with RBSP. Likewise, the instruments of settled between them and the bank, the Cruzes pursued the titling of ownership over a portion of land covered by the title. Simple
conveyance are authentic, not forged. Section 53 has never been the claimed portion in the name of Ricardo. The Register of Deeds rationalization would dictate that a mortgagee-bank has no right to
clearer on the point that as long as the owner's duplicate certificate is eventually issued the disputed TCTs. deliver to any stranger any property entrusted to it other than to those
presented to the Register of Deeds together with the instrument of contractually and legally entitled to its possession. Although we cannot
conveyance, such presentation serves as conclusive authority to the The Cruzes resorted to such means to protect their interest in the dismiss the bank's acknowledgment of the Cruzes' claim as legitimized
Register of Deeds to issue a transfer certificate or make a property that rightfully belongs to them only because of the bank by instruments of conveyance in their possession, we nonetheless
memorandum of registration in accordance with the instrument. officers' acquiescence thereto. The Cruzes could not have secured a cannot sanction how the bank was inveigled to do the bidding of virtual
separate TCT in the name of Ricardo without the bank's approval. strangers. Undoubtedly, the bank's cooperative stance facilitated the
The records of the case show that despite the efforts made by the Banks, their business being impressed with public interest, are issuance of the TCTs. To make matters worse, the bank did not even
Cruzes in persuading the heirs of Eduardo to allow them to secure a expected to exercise more care and prudence than private individuals notify the heirs of Eduardo. The conduct of the bank is as dangerous as
separate TCT on the claimed portion, their ownership being amply in their dealings, even those involving registered lands. 50 The highest it is unthinkably negligent. However, the aspect does not impair the
evidenced by the Kasulatan and Sinumpaang Salaysay where Eduardo degree of diligence is expected, and high standards of integrity and right of the Cruzes to be recognized as legitimate owners of their
himself acknowledged the sales in favor of Ricardo, the heirs adamantly performance are even required of it. 51 portion of the property.
rejected the notion of separate titling. This prompted the Cruzes to
approach the bank manager of RBSP for the purpose of protecting their Indeed, petitioners contend that the mortgagee cannot question the
property right. They succeeded in persuading the latter to lend the veracity of the registered title of the mortgagor as noted in the owner's
owner's duplicate certificate. Despite the apparent irregularity in duplicate certificate, and, thus, he cannot deliver the certificate to such Undoubtedly, in the absence of the bank's participation, the Register of
allowing the Cruzes to get hold of the owner's duplicate certificate, the third persons invoking an adverse, prior, and unregistered claim against Deeds could not have issued the disputed TCTs. We cannot find fault
bank officers consented to the Cruzes' plan to register the deeds of sale the registered title of the mortgagor. The strength of this argument is on the part of the Register of Deeds in issuing the TCTs as his authority
and secure two new separate titles, without notifying the heirs of diluted by the peculiar factual milieu of the case. HcSaTI to issue the same is clearly sanctioned by law. It is thus ministerial on
Eduardo about it. the part of the Register of Deeds to issue TCT if the deed of conveyance
and the original owner's duplicate are presented to him as there should have been considered. 2204, as depicted in the approved plan covering the lot, marked as
appears on the face of the instruments no badge of irregularity or Exhibit "A", and to issue a new title covering the said portion in the
nullity. 55 If there is someone to blame for the shortcut resorted to by The deed of sale covering the fifty (50)-square meter right of way name of the petitioners at the expense of the petitioners. No costs.
the Cruzes, it would be the bank itself whose manager and legal officer executed by Eduardo on 18 March 1981 is obviously covered by the IcDCaS
helped the Cruzes to facilitate the issuance of the TCTs. proscription, the free patent having been issued on 8 October 1976.
However, petitioners may recover the portion sold since the SO ORDERED.
The bank should not have allowed complete strangers to take prohibition was imposed in favor of the free patent holder. In
possession of the owner's duplicate certificate even if the purpose is Philippine National Bank v. De los Reyes, 59 this Court ruled squarely on ||| (Heirs of Manlapat v. Court of Appeals, G.R. No. 125585, [June 8,
merely for photocopying for a danger of losing the same is more than the point, thus: 2005], 498 PHIL 453-478)
imminent. They should be aware of the conclusive presumption in
Section 53. Such act constitutes manifest negligence on the part of the While the law bars recovery in a case where the object of the contract
bank which would necessarily hold it liable for damages under Article is contrary to law and one or both parties acted in bad faith, we cannot
1170 and other relevant provisions of the Civil Code. 56 here apply the doctrine of in pari delicto which admits of an exception,
namely, that when the contract is merely prohibited by law, not illegal
In the absence of evidence, the damages that may be awarded may be per se, and the prohibition is designed for the protection of the party
in the form of nominal damages. Nominal damages are adjudicated in seeking to recover, he is entitled to the relief prayed for whenever
order that a right of the plaintiff, which has been violated or invaded by public policy is enhanced thereby. Under the Public Land Act, the
the defendant, may be vindicated or recognized, and not for the prohibition to alienate is predicated on the fundamental policy of the
purpose of indemnifying the plaintiff for any loss suffered by him. 57 State to preserve and keep in the family of the homesteader that
This award rests on the mortgagor's right to rely on the bank's portion of public land which the State has gratuitously given to him,
observance of the highest diligence in the conduct of its business. The and recovery is allowed even where the land acquired under the Public
act of RBSP of entrusting to respondents the owner's duplicate Land Act was sold and not merely encumbered, within the prohibited
certificate entrusted to it by the mortgagor without even notifying the period. 60
mortgagor and absent any prior investigation on the veracity of
respondents' claim and character is a patent failure to foresee the risk The sale of the 553 square meter portion is a different story. It was
created by the act in view of the provisions of Section 53 of P.D. No. executed in 1954, twenty-two (22) years before the issuance of the
1529. This act runs afoul of every bank's mandate to observe the patent in 1976. Apparently, Eduardo disposed of the portion even
highest degree of diligence in dealing with its clients. Moreover, a before he thought of applying for a free patent. Where the sale or
mortgagor has also the right to be afforded due process before transfer took place before the filing of the free patent application,
deprivation or diminution of his property is effected as the OCT was whether by the vendor or the vendee, the prohibition should not be
still in the name of Eduardo. Notice and hearing are indispensable applied. In such situation, neither the prohibition nor the rationale
elements of this right which the bank miserably ignored. IcESDA therefor which is to keep in the family of the patentee that portion of
the public land which the government has gratuitously given him, by
Under the circumstances, the Court believes the award of P50,000.00 shielding him from the temptation to dispose of his landholding, could
as nominal damages is appropriate. be relevant. Precisely, he had disposed of his rights to the lot even
before the government could give the title to him.
Five-Year Prohibition against alienation
or encumbrance under the Public Land Act The mortgage executed in favor of RBSP is also beyond the pale of the
prohibition, as it was forged in December 1981 a few months past the
One vital point. Apparently glossed over by the courts below and the period of prohibition.
parties is an aspect which is essential, spread as it is all over the record
and intertwined with the crux of the controversy, relating as it does to WHEREFORE, the Decision of the Court of Appeals is AFFIRMED, subject
the validity of the dispositions of the subject property and the to the modifications herein. Respondent Rural Bank of San Pascual is
mortgage thereon. Eduardo was issued a title in 1976 on the basis of hereby ORDERED to PAY petitioners Fifty Thousand Pesos (P50,000.00)
his free patent application. Such application implies the recognition of by way of nominal damages. Respondents Consuelo Cruz and Rosalina
the public dominion character of the land and, hence, the five (5)-year Cruz-Bautista are hereby DIVESTED of title to, and respondent Register
prohibition imposed by the Public Land Act against alienation or of Deeds of Meycauayan, Bulacan is accordingly ORDERED to
encumbrance of the land covered by a free patent or homestead 58 segregate, the portion of fifty (50) square meters of the subject Lot No.
Vagilidad vs. Vagalidad An action for reconveyance based on an implied or constructive trust delivered and paid. He filed a complaint for specific performance.
G.R. No. 161136 must perforce prescribe in ten years and not otherwise. A long line of Petitioners contend that the delivery was merely made for the purpose
Facts: decisions of this Court, and of very recent vintage at that, illustrates of offering it for sale because until the grains were rebagged, classified
this rule. Undoubtedly, it is now well-settled that an action for and weighed, they are not considered sold.
A parcel of land was bought by Gabino and later on without the reconveyance based on an implied or constructive trust prescribes in Issue:
consent of the wife of Gabino was transferred to Wilfredo without any ten years from the issuance of the Torrens title over the property. The Whether there was a perfected sale
payment in conformity that Wilfredo can use the lot to as a collateral only discordant note, it seems, is Balbin v. Medalla, which states that Held:
to obtain loan. And when the loan was paid and the mortgaged was the prescriptive period for a reconveyance action is four years. Soriano initially offered to sell palay grains produced in his farmland to
cancelled. Spouses GABINO and Ma. Dorothy Vagilidad (hereafter However, this variance can be explained by the erroneous reliance on NFA. When the latter accepted the offer by noting in Soriano's Farmer's
DOROTHY), as plaintiffs, filed a Complaint for Annulment of Document, Gerona v. de Guzman. But in Gerona, the fraud was discovered on June Information Sheet a quota of 2,640 cavans, there was already a
Reconveyance and Damages. But Wilfredo claimed that they are the 25, 1948, hence Section 43(3) of Act No. 190 was applied, the New Civil meeting of the minds between the parties. The object of the contract,
owner the land because they already bought it to from the former Code not coming into effect until August 30, 1950 xxx. It must be being the palay grains produced in Soriano's farmland and the NFA was
owner who sold the same to Gabino. Then Gabino claimed that stressed, at this juncture, that Article 1144 and Article 1456 are new to pay the same depending upon its quality. The fact that the exact
Wilfredo resort to fraud to obtain ownership of the said property. provisions. They have no counterparts in the old Civil Code or in the old number of cavans of palay to be delivered has not been determined
Code of Civil Procedure, the latter being then resorted to as legal basis does not affect the perfection of the contract. Article 1349 of the New
Issue: Who is the rightful owner of the property? of the four-year prescriptive period for an action for reconveyance of Civil Code provides: ". . .. The fact that the quantity is not determinate
title of real property acquired under false pretenses. shall not be an obstacle to the existence of the contract, provided it is
Ruling: possible to determine the same, without the need of a new contract
[Thus,] under the present Civil Code, xxx just as an implied or between the parties." In this case, there was no need for NFA and
The contract of sale between LORETO and GABINO, JR. on May 12, constructive trust is an offspring of xxx Art. 1456, xxx so is the Soriano to enter into a new contract to determine the exact number of
1986 could be legally recognized. At the time of sale, LORETO had an corresponding obligation to reconvey the property and the title thereto cavans of palay to be sold. Soriano can deliver so much of his produce
aliquot share of one-third of the 4,280-square meter property or some in favor of the true owner. In this context, and vis-á-vis prescription, as long as it does not exceed 2,640 cavans. From the moment the
1,426 square meters but sold some 1,604 square meters to GABINO, JR. Article 1144 of the Civil Code is applicable[, viz.:] contract of sale is perfected, it is incumbent upon the parties to comply
We have ruled that if a co-owner sells more than his aliquot share in with their mutual obligations or "the parties may reciprocally demand
the property, the sale will affect only his share but not those of the performance" thereof.
other co-owners who did not consent to the sale.Be that as it may, the
co-heirs of LORETO waived all their rights and interests over Lot No. Art. 1144. The following actions must be brought within ten
1253 in favor of LORETO in an Extrajudicial Settlement of Estate dated years from the time the right of action accrues: National Grains Authority v. IAC (1989)
January 20, 1987. They declared that they have previously received
their respective shares from the other estate of their parents ZOILO 1) Upon a written contract; Petitioners: Nat’l Grains Authority and William Cabal
and PURIFICACION. The rights of GABINO, JR. as owner over Lot No. Respondents: IAC and Leon Soriano
1253-B are thus preserved. These rights were not effectively 2) Upon an obligation created by law; Ponente: Medialdea, J.
transferred by LORETO to WILFREDO in the Deed of Absolute Sale of
Portion of Land. Nor were these rights alienated from GABINO, JR. 3) Upon a judgment. Doctrine: The fact that the exact number of objects to be delivered has
upon the issuance of the title to the subject property in the name of not been determined does not affect the perfection of the contract.
WILFREDO. Registration of property is not a means of acquiring
ownership. Its alleged incontrovertibility cannot be successfully National Grains Authority v. IAC Short version: Seller offers to sell palay to buyer. Buyer gives seller a
invoked by WILFREDO because certificates of title cannot be used to quota of 2640 palays. Seller delivers 630 palays. Seller demands
protect a usurper from the true owner or be used as a shield for the Facts: payment. Buyer tells seller to withdraw the palay he delivered because
commission of fraud. On August 23, 1979, private respondent Leon Soriano offered to sell Seller was allegedly not a bonafide farmer. Also, since the palay were
palay grains to NFA through William Cabal, the provincial manager in not rebagged, as is the practice of palay procurement process which
On the issue of prescription, petitioners contend that the appellate Tuguegarao. The documents submitted were processed, and he was signifies acceptance, there was no acceptance. SC says there was
court failed to apply the rule that an action for reconveyance based on given a quota of 2,640 cavans, which is the maximum number of cavans acceptance and a perfected contract of sale. When buyer accepted the
fraud prescribes after the lapse of four years. They cite Article 1391 of he may sell to NFA. On the same day and on the following day, Soriano offer by noting a quota of 2,640 cavans, there was already a meeting of
the Civil Code and the case of Gerona v. De Guzman. delivered 630 cavans, which were no rebagged, classified and weighed. the minds.
When he demanded payment, he was told that payment will be held in
We disagree. This Court explained in Salvatierra v. Court of Appeals, abeyance since Mr. Cabal was still investigating on an information The seller (Leon Soriano), offered to sell palay grains to the buyer (NGA
viz.: received that Soriano was not a bona fide farmer. Instead of which is now the NFA) through William Cabal,
withdrawing the palay, Soriano insisted that the palay grains be the provincial manager of the NFA.
o The fact that the exact number of cavans of palay to be
Seller Soriano submitted the documents required by the buyer NFA for delivered has not been determined does not affect the
pre-qualifying as a seller. His documents were processed and he was perfection of the contract. NCC 1349 of the New Civil Code
given a quota of 2640 cavans of palay. provides: "The fact that the quantity is not determinate shall
not be an obstacle to the existence of the contract, provided
Seller Soriano then delivered 630 cavans of palay. it is possible to determine the same, without the need of a
The palay were not rebagged, classified, and weighed. new contract between the parties."
When Seller Soriano demanded payment, he was informed that it will o In this case, there was no need for NFA and Soriano to
be held in abeyance because: enter into a new contract to determine the exact number of
o Cabal was still investigating an information he received that cavans of palay to be sold. Soriano can deliver so much of his
Seller Soriano was not a bona fide farmer; and produce as long as it does not exceed 2,640
o The palay delivered was not produced from Seller Soriano’s cavans.
farmland but was taken from a warehouse of a rice trader.
Re: Contention that there was no acceptance, therefore consent is
Buyer NFA then wrote Seller Soriano advising to withdraw the cavans absent
because it was found that Seller Soriano is not a bona fide farmer. Contention is incorrect. Sale is a consensual contract, there is
Instead of withdrawing the cavans, Seller Soriano insisted for the perfection when there is consent upon the subject matterand price,
payment. even if neither is delivered. This is provided by NCC 1475.
The acceptance referred to by NCC 1475 which determines consent is
Seller Soriano then filed a complaint for specific performance and/or the acceptance of the one party by the other and not of the goods
collection of money with damages. delivered as contended by petitioners.
And, from the moment the contract of sale is perfected, it is incumbent
Meanwhile, upon agreement, the cavans of palay were withdrawn upon the parties to comply with their mutual
from the warehouse of Buyer NFA. obligations or “the parties may reciprocally demand performance.” (2nd
CFI and CA ruled in favor of Seller Soriano. par, NCC 1475)
NFA contends: The CFI and the CA also found that the seller was a bona fide farmer,
o The cavans of palay delivered by Seller Soriano was made thus qualified to sell palay grains to NFA.
for the purpose of having it offered for sale Decision affirmed.
o Under the procedure prevailing in matters of palay
procurement, rebagging is the initial operative act signifying
acceptance, and acceptance will be considered complete only
after the preparation of the Warehouse Stock Receipt.
Since the delivered cavans did not undergo such procedure, there was
not acceptance of the offer. There was, therefore, no consent.
In this case, Seller Soriano initially offered to sell palay produced in his
farmland to NFA. When buyer NFA accepted the
offer by noting in Soriano's Farmer's Information Sheet a quota of
2,640 cavans, there was already a meeting of the minds
between the parties.
FACTS:
Lazaro Tañedo executed a deed of absolute sale in favor of Ricardo
Tañedo and Teresita Barrera in which he conveyed a parcel of land
which he will inherit. Upon the death of his father he executed an
affidavit of conformity to reaffirm the said sale. He also executed
another deed of sale in favor of the spouses covering the parcel of land
he already inherited. Ricardo registered the last deed of sale in the
registry of deeds in their favor.
Ricardo later learned that Lazaro sold the same property to his children
through a deed of sale.
ISSUE:
WON the Tañedo spouses have a better right over the property against
the children of Lazaro Tañedo.
HELD:
Since a future inheritance generally cannot be a subject of a contract,
the deed of sale and the affidavit of conformity made by Lazaro has no
effect. The subject of dispute therefore is the deed of sale made by him
in favor of spouses Tañedo and another to his children after he already
legally acquired the property.
Under Article 1459 of the Civil Code on contracts of sale, ―The thing
must be licit and the vendor must have a right to transfer ownership
thereof at the time it is delivered.‖ The law specifically requires that
the vendor must have ownership of the property at the time it is
delivered.