CASE DIGESTS1. San Miguel Properties Philippines Inc. vs. Huang, [G.R. No.137290] 2. Navarro vs. Sugar Producers, [G.R. No. L-12888] 3. Dizon vs. CA, [G.R. No. 122544] 4. Alcantara-Daus vs. De Leon, [G.R. No. 149750] 5. Equatorial Realty Development Inc. vs. Mayfair Theater, [G.R. No. 106063] 6. Swedish Match et al vs. CA, [G.R. No. 128120] 7. Bugatti vs. CA, [G.R. No.138113] 8. Spouses Serrano vs. Cagulat, [G.R. No. 139173] 9. Ang Yu vs. Asuncion, [G.R. No. 109125] 10. Lim vs. San and Lo, [G.R. No.15972311. Zamora vs. Office of the President, [G.R. No. 165724]

1. San Miguel vs. HuangNature of the Case:A petition for review for a decision of the Court of Appeals which reversed the decision of the RTC dismissing the complaint brought by the Huangs against San Miguel Properties for enforcement of a contract of sale.Facts: San Miguel Properties offered two parcels of land for sale and the offer was made to an agent of the respondents. An earnest-deposit of P1 million was offered by the respondents and was accepted by the petitioners authorized officer subject to certain terms.Petitioner, through its executive officer, wrote the respondents lawyer that because ethe parties failed to agree on the terms and conditions of the sale despite the extension granted by the petitioner, the latter was returning the earnest-deposit.The respondents demanded execution of a deed of sale covering the properties and attempted to return the earnest-deposit but petitioner refused on the ground that the option to purchase had already expired.A complaint for specific performance was filed against the petitioner and the latter filed a motion to dismiss the complaint because the alleged exclusive option of the respondents lacked a consideration separate and distinct from the purchase price and was thus unenforceable; the complaint did not allege a cause of action because there was no meeting of the mind between the parties and therefore the contact of sale was not perfected.The trial court granted the petitioners motion and dismissed the action. The respondents filed a motion for reconsideration but were denied by the trial court. The respondents elevated the matter to the Court of Appeals and the latter reversed the decision of the trial court and held that a valid contract of sale had been complied with.Petitioner filed a motion for reconsideration but was denied.Issue: WON there was a perfected contract of sale between the partiesRuling: The decision of the appellate court was reversed and the respondents complaint was dismissed.Ratio Decidendi: It is not the giving of earnest money , but the proof of the concurrence of all the essential elements of the contract of sale which establishes the existence of a perfected sale.TheP1 million earnest-deposit could not have been given as earnest money because at the time when petitioner accepted the terms of respondents offer, their contract had not yet been perfected. This is evident from the following conditions attached by respondents to their letter.The first condition for an option period of 30 days sufficiently shows that a sale was never perfected. As petitioner correctly points out, acceptance of this condition did not give rise to a perfected sale but merely to an option or an accepted unilateral promise on the part of respondents to buy the subject properties within 30 days from the date of acceptance of the offer. Such option giving respondents the exclusive right to buy the properties within the period agreed upon is separate and distinct from the contract of sale which the parties may enter. All that respondents had was just the option to buy the properties which privilege was not, however, exercised by them because there was a failure to agree on the terms of payment. No contract of sale may thus be enforced by respondents.Even the option secured by respondents from petitioner was fatally defective. Under the second paragraph of Art. 1479, an accepted unilateral promise to buy or sell a determinate thing for a price certain is binding upon the promisor only if the promise is supported by a distinct consideration. Consideration in an option contract may be anything of value, unlike in sale where it must be the price certain in money or its equivalent. There is no showing here of any consideration for the option. Lacking any proof of such consideration, the option is unenforceable.Equally compelling as proof of the absence of a perfected sale is the second condition that, during the option period, the parties would negotiate the terms and conditions of the purchase. The stages of a contract of sale are as follows: (1)negotiation, covering the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is perfected; (2)perfection, which takes place upon the concurrence of the essential elements of the sale which are the meeting of the minds of the parties as to the object of the contract and upon the price; and (3)consummation, which begins when the parties perform their respective undertakings under the contract of sale, culminating in the extinguishment thereof.In the present case, the parties never got past the negotiation stage. The alleged indubitable evidence of a perfected sale cited by the appellate court was nothing more than offers and counter-offers which did not amount to any final arrangement containing the essential elements of a contract of sale. While the parties already agreed on the real properties which were the objects of the sale and on the purchase price, the fact remains that they failed to arrive at mutually acceptable terms of payment, despite the 45-day extension given by petitioner.

3. Regina Dizon et al v. CAFACTS:Overland Express Lines, Inc. entered into a Contract of Lease with Option to Buy with petitioners involving a 1,755.80 square meter parcel of land situated at corner MacArthur Highway and South H Street, Diliman, Quezon City. The term of the lease was for 1 year commencing from May 16,1974 up to May 15, 1975. During this period, Overland Express Lines was granted an option to purchasefor theamount ofP3,000.00per squaremeter.Thereafter,the lease shall beon aper month basis with a monthly rental of P3,000.00.For failure of Overland Express Lines to pay the increased rental of P8,000.00 per month effectiveJune 1976, petitioners filed an action for ejectment against it. The lower court rendered judgment ordering Overland Express Lines to vacate the leased premises and to pay the sum of P624,000.00representing rentals in arrears and/or as damages in the form of reasonable compensation for the use and occupation of the premises during the period of illegal detainer from June 1976 to November1982 at the monthly rental of P8,000.00, less payments made, plus 12% interest per annum from November 18, 1976, thedate offiling ofthe complaint, until fully paid,the sumofP8,000.00a month starting December 1982, until Overland Express Lines fully vacates the premises, and to payP20,000.00 as and by way of attorneys fees.ISSUE:WONOverlandExpressLinesactuallypaidtheallegedP300,000.00toFidelaDizon,asrepresentative (agent) ofpetitioners inconsideration ofthe optionHELD:No. CA opined that the payment by Overland Express Lines of P300,000.00 as partial payment for the leased property, which petitioners accepted (through Alice A.Dizon) and for which anofficial receipt was issued, was the operative act that gave rise to a perfected contract of sale, and that for failure of petitioners to deny receipt thereof, Overland Express Lines can therefore assume that Alice A. Dizon, acting as agent of petitioners, was authorized by them to receive the money in their behalf.CA went further by stating that in fact, what was entered into was a conditional contract of sale wherein ownership over theleased property shall not pass tothe Overland Express Lines until ithas fully paid the purchase price. Since Overland Express Lines did not consign to the court the balance of the purchase price and continued to occupy thesubject premises, it had the obligation to paythe amount of P1,700.00 in monthly rentals until full payment of the purchase price.

In an attemptto resurrect the lapsed option, Overland Express Lines gave P300,000.00 to petitioners(thru Alice A. Dizon) on the erroneous presumption that the said amount tendered would constitute a perfected contract of sale pursuant to the contract of lease with option to buy. There was no valid consent by the petitioners (as co-owners of the leased premises) on the supposed sale entered into by Alice A. Dizon, as petitioners alleged agent, and Overland Express Lines. The basis for agency is representation and a person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent. As provided in Article 1868 of the New Civil Code, there was no showing that petitioners consented to the act of Alice A. Dizon nor authorized her to act on their behalfwith regard toher transaction withprivaterespondent.The mostprudent thingprivate respondent should have done was to ascertain the extent of the authority of Alice A. Dizon. Being negligent in this regard, private respondent cannot seek relief on the basis of a supposed agency.

Everyperson dealingwithanagentisputuponinquiry andmustdiscoveruponhisperilthe authority of the agent. If he does not make such inquiry, he is chargeable with knowledge of the agents authority, and his ignorance of that authority will not be anyexcuse. Persons dealing with an assumed agency, whether the assumed agency be a general or special one, are bound attheir peril, if they would hold the principal, to ascertain not only the fact of the agency but also the nature and extent of the authority, and in case either is controverted, the burden of proof is upon them to establish it.

4. ALCANTARA-DAUS v. SPOUSES DE LEONFACTS:Spouses De Leon are the owners of a parcel of land situated in the Municipality of San Manuel, Pangasinan with an area of Four Thousand Two Hundred Twelve square meters more or less. Respondent Hermoso De Leon inherited the said lot from his father Marcelino De Leon by virtue of a Deed of Extra-Judicial Partition. Said lot is covered by Original Certificate of Title No. 22134 of the Land Records of Pangasinan.Sometime 1960s, Spouses De Leon engaged the services of the late Atty. Florencio Juan to take care of the documents of their properties.They were asked to sign voluminous documents by the latter.After the death of Atty. Juan, some documents surfaced and most revealed that their properties had been conveyed by sale or quitclaim to Hermosos brothers and sisters, to Atty. Juan and his sisters, when in truth and in fact, no such conveyances were ever intended by them. Furthermore, respondent found out thathis signature in the Deed of Extra-judicial Partition with Quitclaim made in favor of Rodolfo de Leon was forged. They discovered that the land in question was sold by Rodolfo de Leon to Aurora AlcantaraSpouses De Leon demanded the annulment of the document and re-conveyance but defendants refused. Petitioner, Aurora Alcantara-Daus averred that she bought the land in question in good faith and for value on December 1975 and that she has been in continuous, public, peaceful, open possession over the same and has been appropriating the produce thereof without objection from anyone.The RTC of Urdaneta, Pangasinanrendered its Decisionin favor of herein petitioner.It ruled that respondents claim was barred by laches, because more than 18 years had passed since the land was sold.It further ruled that since it was a notarial document, the Deed of Extrajudicial Partition in favor of Rodolfo de Leon was presumptively authentic.

ISSUES: Whether or not the Deed of Absolute executed by Rodolfo De Leon over the land in question in favor of petitioner was perfected and binding upon the parties therein?

Whether or not the evidentiary weight of the Deed of Extrajudicial Partition with Quitclaim, executed by respondent Hermoso de Leon, Perlita de Leon and Carlota de Leon in favor of Rodolfo de Leon was overcome by more than a preponderance of evidence of respondents?

HELD:First Issue:NO.It is during the delivery that the law requires the seller to have the right to transfer ownership of the thing sold.In general, a perfected contract of sale cannot be challenged on the ground of the sellers non-ownership of the thing sold at the time of the perfection of the contract.Further, even after the contract of sale has been perfected between the parties, its consummation by delivery is yet another matter.It is through tradition or delivery that the buyer acquires the real right of ownership over the thing sold.Undisputed is the fact that at the time of the sale, Rodolfo De Leon was not the owner of the land he delivered to petitioner.Thus, the consummation of the contract and the consequent transfer of ownership would depend on whether he subsequently acquired ownership of the land in accordance with Article 1434 of the Civil Code.Therefore, we need to resolve the issue of the authenticity and the due execution of the Extrajudicial Partition and Quitclaim in his favor.

Second Issue:NO. As a general rule, the due execution and authenticity of a document must be reasonably established before it may be admitted in evidence.Notarial documents, however, may be presented in evidence without further proof of their authenticity, since the certificate of acknowledgment is prima facie evidence of the execution of the instrument or document involved.To contradict facts in a notarial document and the presumption of regularity in its favor, the evidence must be clear, convincing and more than merely preponderant.The CA ruled that the signature of Hermoso De Leon on the Extrajudicial Partition and Quitclaim was forged.However, this factual finding is in conflict with that of the RTC.While normally this Court does not review factual issues,this rule does not apply when there is a conflict between the holdings of the CA and those of the trial court,as in the present case.After poring over the records, the SC finds no reason to reverse the factual finding of the appellate court.A comparison of the genuine signatures of Hermoso De Leonwith his purported signature on the Deed of Extrajudicial Partition with Quitclaimwill readily reveal that the latter is a forgery.As aptly held by the CA, such variance cannot be attributed to the age or the mechanical acts of the person signing.

5. Equatorial Realty Development vs Mayfair TheaterFacts:

Carmelo owned a parcel of land in Manila. He leased it to Mayfair for a term of 20 years, for use as a motion picture theater. Two years later, Carmelo leased to Mayfair another portion of his property, also for 20 years. Both contracts have the stipulation: That if the lessor should desire to sell the leased premises, the lessee shall be given 30 days exclusive option to purchase the same. In the event, however, that the leased premises is sold to someone other than the lessee, the lessor is bound and obligated, as it hereby binds and obligates itself, to stipulate in the Deed of Sale thereof that the purchaser shall recognize this lease and be bound by all the terms and conditions thereof. Mr. Pascal (of Carmelo) informed Yang (Mayfairs president) that he wanted to sell the entire property, and that a certain Araneta was offering to buy the whole property for $1.2M. Pascal asked Yang if he was willing to buy the property for P6-7M. Mayfair informed Carmelo that they wanted to purchase the entire property and reminded them of the stipulation in the lease, but Carmelo ignored the letter. Carmelo then sold its entire property to Equatorial for P11.3M. Mayfair filed an action for specific performance and annulment of the leased premises to Equatorial. Carmelo and Equatorial claimed: that it had informed Mayfair of its desire but that Mayfair had said it was only interested in buying the area under lease, which was impossible since the property was not a condominium, and that the option to purchase invoked by Mayfair is null and void for lack of consideration. RTC: Dismissed Mayfairs complaint. It reasoned that the option in the contract of lease was not supported by a separate consideration, and without a consideration, the option is not binding on Carmelo to sell the property to Mayfair. Cited Art 1479. Mayfair cannot compel Carmelo to comply with the promise unless Mayfair establishes the existence of a distinct consideration. Also, Art 1354 (Although the cause is not stated in the contract, it is presumed that it exists and is lawful unless the debtor proves the contrary), and consideration cannot be presumed, because when it comes to an option it is governed particularly by Art 1479, whereby the promissee has the burden of proving the existence of consideration. (This was the doctrine in the case of Sanchez.) CA: The stipulation is a right of first refusal and not an option contract, which was the real intention of the parties. The stipulation is certain as to the object (the sale of the leased premises) but the price for which the object is ot be sold is not stated, so it isnt an option contract. Also said that the right of first refusal was limited to the leased promises and not the entire property itself.

Issue: Is the stipulation a right of first refusal or option contract?Held: Right of first refusal.The deed of option or the option clause in a contract, in order to be valid and enforceable, must, among other things, indicate the definite price at which the person granting the option is willing to sell. Cited case of Ang Yu Asuncion: An unconditional mutual promise to buy and sell, as long as the object is made determinate and the price is fixed, can be obligatory on the parties. An accepted unlitateral promise which specifies the thing to be sold and the price to be paid, when coupled with a valuable consideration distinct and separate from the price, is what may properly be termed a perfect contract of option, and this contract is legally binding.The provision is a right of first refusal, and as such, the requirement of a separate consideration has no applicability. An option is a contract granting a privilege to buy or sell within an agreed time and at a determined price, and it is a separate and distinct contract from that which the parties may enter into, and it must be supported by consideration. However, here the right of first refusal is an integral part of the contracts of lease.There was a consideration for that right of refusal. The consideration is built into the reciprocal obligations of the parties. The consideration for the lease includes the consideration for the right of first refusal. Mayfair is in effect stating that it consents to lease the premises and to pay the price agreed upon, provided that the lessor should give it the right of first refusal.Carmelo actually acknowledged that Mayfair had the right of first refusal, because it informed Mayfair that it intended to sell the properties. The contract between Carmelo and Equatorial was entered into in bad faith. Since Mayfair has a right of first refusal, it can exercise the right only if the fraudulent sale is first set aside or rescinded. Deed of sale between Carmelo and Equatorial is rescinded. Carmelo is to return the purchase price to Equatorial, and Equatorial is ordered to return ownership of the land to Carmelo.Carmelo is ordered to allow Mayfair to buy the lots for P11.3M.

EMILIO BUGATTI, petitioner, vs. COURT OF APPEALS and SPOUSES BEN BAGUILAT and MARIA BAGUILAT, respondents.FACTSIn the complaint, respondents alleged that they are the owners of a parcel of land situated in Lagawa, Ifugao and that sometime in December, 1987, petitioner offered to lease their land. According to respondents, they discussed the terms and conditions of the lease with petitioner. It was agreed by petitioner and respondents that the aforesaid terms and conditions should be included in a written contract of lease to be prepared by petitioner and presented to respondents for their approval. However, even before preparing the contract of lease, petitioner occupied respondents land and began construction on January 18, 1988. Immediately objecting to the construction, respondent Maria Baguilat demanded that the contract of lease should first be signed. Sometime in March, 1988, petitioner finally presented the lease contract to respondents but it did not contain the terms and conditions previously agreed upon. Then petitioner revised the same, presented to respondents, contained counter-proposals. Respondents refused to accede to such counter-proposals. Despite the fact that no contract was signed by the parties, petitioner continued to occupy respondents land.ISSUEWON a contract of lease had been perfectedRULINGThe court held that no contract of lease was perfected between the parties since the element of consent was missing. The drafting of the contract - a task entrusted to petitioner - was deemed by respondents as a condition precedent to the perfection of the lease contract and consequently, to any construction activity upon their land. Although petitioner submitted two drafts, they did not contain the terms and conditions spoken of by the parties during their negotiations and were accordingly rejected by respondents. However, despite the absence of a perfected contract and in total disregard of respondents repeated objections, petitioner occupied respondents land and commenced construction thereon, making him a builder in bad faith.

8. SPOUSES SERRANO, ET. AL. v. CAGUIATFACTS:Spouses Serrano agreed to sell in favor of respondent Caguiat a parcel of land at 1,500.00 per square meter. Caguiat partially paid petitioners 100, 000.00 as evidenced by a receipt issued by petitioners indicating therein respondents promise to pay the remaining balance. Respondent, after making known his readiness to pay the balance, requested from petitioners the preparation of the necessary Deed of Sale. When petitioners cancelled the transaction and intended to return to Caguiat his partial payment, respondent filed a complaint for specific performance and damages. The trial court relying on Article 1482 of the Civil Code ruled that the payment of 100, 000.00 being an earnest money signified the perfection of the contract of sale. The Court of Appeals denied petitioners motion for reconsideration in affirmation of the lower courts decision.ISSUE: Whether or not the partial payment constitutes an earnest money as manifested in Article 1482 of the Civil CodeHELD: No. Article 1482 applies only to earnest money given in a contract of sale. It was apparent that the earnest money in the case at bar was given in lieu of a contract to sell. Unlike in a contract of sale, the ownership of the parcel of land was retained by the Spouses Serrano and shall only be passed to Caguiat upon full payment of the purchase price as evidenced by the receipt. Relatively, no Deed of Sale has been executed as proof of the intention of the parties to immediately transfer the ownership of the parcel of land. Spouses Serrano also retained ownership of the certificate of title of the lot, thereby indicating no actual or constructive delivery of the ownership of the property. Finally, should the transaction pushed through, Caguiats payment of the remaining balance would have been a suspensive condition since the transfer of ownership was subordinated to the happening of a future and uncertain event.

9. Ang Yu Asuncion vs Court of Appeals Ang Yu Asuncion and Keh Tiong leased, for more than 50 years and religiously paying the rent, residential and commercial spaces in Binondo, owned by the Cu Unjiengs and Jose Tan. On several occasions, the lessors informed Ang Yu that they are offering to sell the premises and are giving them priority. Ang Yu asked the lessors to put their offer in writing, which they said they would but they never actually put it in writing. Ang Yu filed the case, claiming that the Cu Unjiengs failed to specify the terms and conditions of the offer to sell and that information was received that they were about to sell the property, so Ang Yu wants to compel the lessors to sell the property to them. ** RTC: The Cu Unjiengs offer to sell was never accepted by Ang Yu, for the reason that the parties didnt agree upon the terms, but nevertheless, should the Cu Unjiengs offer their property for sale at a price of P11M or lower, Ang Yu will have the right of first refusal. CA: Affirmed with modification. There will still be a right of first refusal whether the price is lower or above P11M. The Cu Unjieng spouses executed a deed of sale, selling the property to Buen Realty, for P15M. Buen Realty filed a case asking Ang Yu to vacate, but Ang Yu claimed that Buen bought the land while it was under lis pendens. RTC: Buen Realtys title is set aside as having been executed in bad faith. Cu Unjieng spouses ordered to sell the property to Ang Yu for P15M. CA: Reversed. Order to sell is without effect.

Issue: Are the Cu Unjiengs bound to sell the property to Ang Yu and co.?Held: NO. The stages of a contract of sale are negotiation, perfection, and consummation. Until the contract is perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation.A negotiation is formally initiated by an offer. An imperfect promise (politacion) is merely an offer. Thus, at any time prior to the perfection of the contract, either negotiating party may stop the negotiation, and the offer may be withdrawn.If a period is given to the offeree within which to accept the offer, the following rules govern:1. If the period is not founded upon or supported by a consideration, the offeror is still free and has the right to withdraw the offer before its acceptance.2. If the period has a separate consideration, a contract of option is deemed perfected and it would be a breach of that contract to withdraw the offer during the agreed period. However, that option is an independent contract by itself, and it is to be distinguished from the projected main agreement (subject matter of the option) which is obviously yet to be concluded. If the optioner-offeror withdraws the offer before its acceptance (exercise of the option) by the optionee-offeree, the latter may not sue for specific performance on the proposed contract (object of the option) since it has failed to reach its own stage of perfection. The optioner-offeror, however, renders himself liable for damages for breach of the option.Here, the first decisions (**) only granted a right of first refusal. In a right of first refusal, while the object might be made determinate, the exercise of the right, however, would be dependent not only on the grantors eventual intention to enter into a binding juridical relation with another, but also on terms, including the price, that obviously are yet to be firmed up. Prior thereto, it can at best be so described as merely belonging to a class of preparatory juridical relations governed not by contracts. The breach of right of first refusal cannot justify corresponding an issuance of a writ of execution under a judgment, nor would it sanction an action for specific performance without negating the indispensable element of consensuality.If Ang Yu is aggrieved by the failure to honor the right of first refusal, the remedy is not a writ of execution on the judgment, but an action for damages.(2)Ang Yu Asuncion vs. CA (1994)FACTS: Ang Yu Asuncion, et al., (plaintiffs) are tenants/lessees of residential and commercial spaces owned by the Cu Unjieng. The Cu Unjiengs informed the plaintiffs that they are offering to sell the said premises and are giving them priority. During the negotiations, the Cu Unjiengs offered a price of P6M, but the plaintiffs counter offered P5M. Plaintiffs then asked the Cu Unjiengs to put their offer in writing, which the latter agreed. Plaintiffs then asked that the terms and conditions of the offer to sell be specified, but the Cu Unjiengs did not reply. Thus, plaintiffs filed a complaint to compel the Cu Unjiengs to sell the property to them. RTC: offer to sell was never accepted, bec. parties never agreed on the terms and conditions of the proposed sale. However, the court held that the plaintiffs had a right of first refusal in case the property was to be sold at a price lower than P11M. CA: affirmed the decision of RTC, with modications on that, due to the economy today, right of first refusal should also be made available to plaintiffs if the price is in excess of P11M. Later, the Cu Unjiengs executed a Deed of Sale in favor of Buen Realty and Development Corporation (defendant), transferring the property to the latter for P15M. Plaintiffs filed a Motion of Execution praying that the CA ruling be implemented. RTC: granted the said motion, ordered defendant to execute the Deed of Sale in favor of plaintiffs, in recognition of their right of first refusal. CA: set aside the said order of the lower court.

ISSUE: I. W/N plaintiffs right of first refusal be recognized and the property should be sold in their favor.

HELD: I. NO1. Until the contract is perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation.2. A contract is perfected when a person (seller), obligates himself, for a price certain, to deliver and to transfer ownership of a thing or right to another (buyer).3. In the law on sales, the so-called right of first refusal is an innovative juridical relation.4. It cannot be deemed a perfected contract of sale under the NCC.5. An option or an offer would require, among other things, a clear certainty on both the object and the cause or consideration of the envisioned contract.6. In a right of first refusal, while the object might be made determinate, the exercise of right, however, would be dependent not only on the grantors eventual intention to enter into a binding juridical relation with another but also on terms, including the price, that obviously are yet to be later firmed up.7. It can be best so described as merely not by contracts buy by, among other laws of general application, the pertinent scattered provisions of the NCC on human conduct.8. The remedy of plaintiffs is not a writ of execution on the judgment, since there is none to execute, but an action for damages in a proper forum for the purpose.

ANTONIO S. LIM, JR., represented by his attorney-in-fact, PAZ S. LIM, petitioner, vs. VICTOR K. SAN and ELINDO LO, respondents.FACTSPetitioner alleged the following: That plaintiff is an owner of a parcel of land situated at Bajada, Davao City a fourteen (14) doors commercial building was constructed thereon, and that defendant is paying an annual lease of ONE HUNDRED THOUSAND (P100,000.00) PESOS to the plaintiff. On May 29, 1991, the defendant taking undue advantage of the depressed mental state of plaintiffs Attorney-in-Fact, brought about by the demise of her late husband, Dr. Antonio A. Lim Sr., caused some papers for her to sign, which later turn out to be an Absolute Deed of Sale The same was obtained through fraud and trickery employed by the defendant and that she never appeared before the Notary Public, who notarized the said deed That no consideration was ever paid, much less received by the plaintiff or by his Attorney-in-Fact. Simply put, the Deed of Absolute Sale was void ab initio for "lack of consideration" and for "lack of a valid consent"; After the signing of the afore cited Deed of Sale with its attendant legal flaws and infirmities, plaintiffs Title was transferred in the name of the defendant, Victor K. San

ISSUEWON a Deed of Sale was validRULINGYES. Court of Appeals affirmed the judgment of the trial court in toto. Contrary to the allegations of the petitioner that the consent of his attorney-in-fact to the deed of sale was vitiated, a perusal of the records of this case showed that the petitioner failed to establish that violence, intimidation and undue influence vitiated the consent of Paz S. Lim to the deed of sale pertaining to the subject property. While it is true that upon the death of her husband, Dr. Antonio T. Lim, Sr., on May 18, 1990, Paz S. Lim returned to the Philippines and subsequently stayed at the house of the respondent, such fact per se is not sufficient to establish that the latter employed intimidation, violence or undue influence upon the former. Defect or lack of valid consent, in order to make the contract voidable, must be established by full, clear and convincing evidence, and not merely by a preponderance thereof.ZAMORA REALTY and DEVELOPMENT CORPORATION and/or ERNESTO ZAMORA, Petitioners, vs. OFFICE OF THE PRESIDENT OF THE PHILIPPINES and EDILBERTO C. GALLARDO, Respondents.FACTSOn October 8, 1985, respondent Edilberto C. Gallardo entered into a contract to sell with Amlac Development Corporation (Amlac). The property subject of the contract is Lot 1, Block 3 of Amlac-Ville Subdivision. Under the contract, Gallardo was to pay a downpayment of P26,058.00, upon execution, the balance to be paid in installments of P1,987.50 until full settlement of the purchase price of P130,290.00. Gallardo delivered the downpayment upon the signing of the contract, and several months later, on March 11, 1987, the initial installment. Gallardo later informed the owner/developer of his intention to stop further payments due to the latters non-compliance with its obligation to complete the development of the subdivision project. The owner/developer nevertheless made several demands for him to pay the monthly amortizations, which the latter ignored, insisting that he would suspend payment until the completion of the subdivision project.ISSUEWhether respondent violated the contract to sell by his failure to pay the monthly amortizations

RULINGNo. The contract entered into between petitioner and respondent is a contract to sell a subdivision lot. It bears stressing that a contract to sell is a bilateral contract, whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price. In a contract to sell, the payment of the purchase price is a positive suspensive condition, the failure of which is not a breach, casual or serious, but a situation that prevents the obligation of the vendor to convey title from acquiring an obligatory force. Thus, for its non-fulfillment, there will be no contract to speak of, the obligor having failed to perform the suspensive condition which enforces a juridical relation. On May 31, 2004, the CA sustained the validity of respondent Gallardos suspension of payments, and ruled that it was in accordance with Sections 20 and 23 of Presidential Decree (P.D.) No. 957. The CA stated that the development of the subdivision was still ongoing as of 1992, way beyond 1985 when it was first registered, and that such delay justified the buyers act of suspending payment. The CA, likewise, gave weight to Gallardos letter to Amlac-Ville Subdivision, dated November 5, 1991, where he stated that after March 11, 1987, he was stopping payment of his amortization due to non- development of the project. Thus, respondent justly withheld the payment of amortization of the subject lot, and petitioners unilateral cancellation of the contract to sell cannot be sustained. Consequently, the contract to sell between it and respondent subsists.