SALES CASES CAPACITY OF PARTIES LAO V GENATO

Sotero Dionisio Jr (heir and administrator of Rosenda Abutan) > Sotero III for P75,000 > William Go for P80,000

Sotero III and Spouses Lao entered into a Mutual Agreement of Promise to Sell Respondent Nuqui: Motion for Annulment / Revocation of the Deeds of Absolute

Sale- sale and subsequent transfer were made in violation of court order and that consideration of two sales were grossly inadequate (many are willing to buy property at P400,000)

Sotero Jr: actual consideration is P200,000 Respondent Nuqui: 2 sales were but a single transaction simultaneously hatched

and consummated in one occasion (Sotero III is without means or income and so has no capacity to buy); transaction is to defraud the estate and his co-heirs

Petitioner Lao spouses: Manifestation in Intervention of Interest to Purchase Property – respondent-admin, without revealing that the property had already been sold to Go, entered into a Mutual Agreement of Promise to sell to petitioners for the amount of P220,000; upon execution of agreement, petitioners paid the earnest money in the amount of P70,000

After hearing, respondent judge allowed all interested parties to bid. William Go appeared to be the highest bidder.

FICTITIOUS SALE BY ADMINISTRATOR – Sotero Jr is the administrator of the estate of his deceased mother. As suchm he occupies a position of the highest trust and confidence. He is required to exercise reasonable diligence and act in entire good faith in the performance of that trust. In the case at bar, the sale was made necessary “in order to settle other existing obligations of estate”. Sale is fictitious, made to his very son Sotero III and for grossly low price. FORNILDA V RTC

6 parcels of land were owned by deceased Julio Catolos Some of the legal heirs (Francisca Catolos, Agnes catolos, Alfonso Fornilda, Asuncion

Pasamba) were represented by Atty. Sergio Amonoy Jan 12, 1965: Project of Partition approved August 6, 1969: estate declared closed and terminated Jan 20, 1965: Fornilda and Pasamba executed a Contract of Mortgage in favour of

Atty. Amonoy as security for payment of attorney/s fees Pasamba and Fornilda died Mortgage indebtedness was not paid, Atty. Amonoy instituted foreclosure

proceedings; Atty. Amonoy as highest bidder INVALID PURCHASE BY A LAWYER (Art 1491(5)) – A lawyer is prohibited from acquiring either by purchase or by assignment the property or rights involved which are the object of litigation in which they intervene by virtue of their profession. At the time the mortgage was executed, the relationship of lawyer and client still existed. Mortgage was executes

only 8 days after` the approval of Project of Partition, evidencing respondent’s intention to protect his own interests and ride roughshod over that of his clients. DIRECTOR OF LANDS V ABABA

Atty. Alberto Fernandez was the counsel of Maximo Abarquez in a civil case for annulment of contract of sale and for recovery of land

During its appeal, Abarquez engaged in the services of atty. Fernandez. Unable to pay his lawyer, Abarquez, executed a document (contract of contingent fee) obliging himself to give his lawyer ½ of whatever he might recover from Lots 5600 and 5602 should the appeal prosper. The case was resolved.

Petitioner refused to comply with his obligation, instead offered to sell the whole parcels to Spouses Juan Larrazabal and Marta de Larrazabal

Atty. Fernandez filed an affidavit of adverse claim. Notwithstanding such, petitioner spouses conveyed by deed of absolute sale 2/3 of the lands to Larrazabal spouses

CONTRACT OF CONTINGENT FEE NOT PROHIBITED – Art 1491 prohibition does not apply to “cases where after completion of litigation the lawyer accepts on account of his fee, an interest in the assets realized by the litigation. A contract for a contingent fee is not covered by Art 1491 because the transfer or assignment of the property in litigation takes effect only after the finality of favourable judgment. SAROSA VDA DE BARSOBIA V CUENCO

Lot in controversy: one half portion of 2 adjoining parcels of coconut land @ Barrio Mancapagao, Sagay, Camiguin, Misamis Oriental

Leodica Balisado > Spouses Patricio Barsobia and Epifania Sarosa > Ong King Po (Chinese) > Victoriano Cuenco (naturalized Filipino)

Epifania usurped the property and sold ½ to Pacita Vallar Respondent Cuenco: forcible entry case against Epifania and complaint for recovery

and ownership of land against Epifani and Patricia SPECIAL INCAPACITY: SALE TO ALIEN - Sale to Ong King Po was void and inexistent, contrary to constitution. But the litigated property is now in the hands of a naturalized Filipino. Respondent is the rightful owner! HERRERA V LUY KIM GUAN

Natividad Herrera, legitimate daughter of Luis Herrera, now deceased Luis Herrera, owner of 3 parcels of land and their improvements Before leaving for China, executed a deed of General Power of attorney, authorizing

Luy Kim Guan to administer and sell his properties Lot 1740 was sold by Luy Kim Guan in his capacity as attorney-in-fact to Luy Chay.

To secure a loan of P2000, a deed of mortgage to Zamboanga Mutaul Building and Loan Assoc. was executed. He also executed deed of sale on favour of Lino Bangayan.

Luy Kim Guan sold to Nicomedes Salazar his one half participation in two lots Luy and Nicomedes executed a deed of mortgage in favour of BPI to secure a loan. Luy and Nicomedes sold Lot 4465 to Carlos Eijansantos and Lot 4467 Lino

Bangayan

Plaintiff Nativida filed a complaint for recovery. (all transactions mentioned are fraudulent and were executed after the death of Luis Herrera and when power of attorney was no longer operative.

LEGALITY OF TITLES ACQUIRED BY LUY CHAY AND LINO BANGAYAN – Luy Chay as citizen of Philippines. Bangayan had sufficiently established his Philippine citizenship. While Luy Kim Guan is a Chinese citizen, nevertheless, inasmuch as he acquired his one-half share in Lot 4467 in 1931, long before the Constitution was adopted. Land sold to Chinese, who later sold it to a Filipino citizen, the sale to the latter cannot be impugned. GODINEZ V PAK LUEN

Plaintiffs filed a complaint alleging that they are heirs of Jose Godinez, who was married to Martina Alvarez Godinez; during marriage of parents, said parents acquired a parcel of land (Lot No. 94) of Jolo townsite in the name of Jose Godinez; their mother dies leaving plaintiffs as sole surviving heirs

Without knowledge of plaintiffs, Jose Godinez sold the land to Fong Pak Luen, Chinese

Fong executed a power of attorney in favour of Kwan Pun Ming, also an alien, who conveyed and sold the land to Trinidad Navate, with full knowledge that Fong is a Chinese; Fong has not acquired any title

Petitioner: since ½ of the conjugal property inherited by plaintiff, Godinez could not legally convey the entire property; Godinez failed to surrender the property despite demands

W/N THE HEIRS OF A PERSON WHO SOLD A PARCEL OF LAND TO AN ALIEN MAY RECOVER THE PROPERTY IF IT HAD BEEN CONVEYED TO A FILIPINO CITIZEN – “Under the Constitution, aliens may not acquire private or agricultural lands”. Consequently, prescription may never be invoked to defend that which Constitution prohibits. However, we see no necessity from the facts to pass upon the nature of the contract of sale executed by Jose Godinez and Fong Pak Luen – whether void, illegal per se, or merely prohibited. It is enough to stress that in so far as the vendee is concerned, prescription is unavailing. But, neither can the vendor or his heirs rely on an argument based on imprescriptibility because the land sold in 1941 is now in the hands of a Filipino citizen against whom the constitutional prescriptiom was never intended to apply. From the fact that prescription may not be used to defend a contract which the Consti prohibits, it does not necessarily follow that the applicants may be allowed to recover the property sold to an alien. HULST V PR BUILDERS

Petitioner Hulst: Motion for Partial Reconsideration (Contract to sell involving a condominium unit did not violate the Constitutional proscription agaimst ownership of land by aliens; buyer will not get atransfer certificate of titile but merely a condominium certificate of title)

RA 4726 (CONDOMINIUM ACT) – foreign nationals can own Philippine real estate through the purchase of condo units or town houses. It expressly allows foreigners to acquire condo units and shares in condo corporations up to not more than 40% of the total and outstanding capital stock of a Filipino-owned or controlled corporation.

Ownership of the land is legally separated from the unit itself. DELIVERY ALCANTARA-DAUS V DE LEON

Parcel of land @ San Manuel, which Hermoso de Leon inherited from his father Marcelino de Leon *( Deed of Extrajudicial Partition)

Hermoso de Leon engaged in the services of late Atty. Florencio Juan to take care of the documents of his parents’ properties

After death of Atty. Juan, some documents revealed that their properties had been conveyed by sale or quitclaim to Hermoso’s brothers and sisters, to Atty. Juan and his sisters, when in truth no such conveyances were ever intended by them.

They discovered that land in question was sold by Rodolfo de Leon to Aurora Alcantara.

SELLER’S OWNERSHIP AT THE TIME OF DELIVERY – During perfection stage, seller’s ownership of the thing sold is not an element. The contract, however, creates an obligation on the part of the seller to transfer ownershiop and to deliver the subject matter. It is during the delivery that the law requires vthe seller to have right to transfer ownership of the thinbg sold. It is trough tradition or delivery that the buyer acquires the real right of ownership over the things sold. Rosolfo was not the owner of the land he delivered to petitioner. Thus, the consummation of contract and the consequent transfer of ownership would depend whether he subsequently acquired ownership of land (1434). SAMPAGUITA PICTURES V JALWINDOR MANUFACTURERS

Sampaguita Pictures is the owner of the Sampaguita Pictures Building, leased to Capitol 300, with the agreement that it shall be used for social purposes exclusively, and that improvements made by lessee shall belong to the lessor

Capitol purchased on credit from Jalwindor Manufacturers glass and wooden jalousies which were delivered and installed in the leased premises

Jalwindor: action for collection of sum of money for its failure to pay. Entered into a compromise agreement

Capitol also failed to pay rentals to Sampaguita Sampaguita filed complaint for ejectment and for coillection of sum of money Capitol failed to comply with compromise agreement. Sheriff made alevy on the

glass and wooden jalousies. Sampaguita filed a third part complaint alleging that it is the owner SAMPAGUITA AS THE OWNER; INVALID LEVY – When jalousies were delivered snd installed to leased premises, Capitol became the owner thereof. Ownership is transferred by delivery, actual or constructive. Having entered into lease contract with Sampaguita, latter became the owner. When levy was made on said items, Capitol was no longer the owner thereof.

NATIONAL BANK V LO Severo Eugenio Lo and Ng Khey Ling ( with JA Say Lian Ping, Ko Tiao Hun, On Yem

Ke Lam and Co Sieng Peng) fromed a commercial partnership – “Tai Sing & Co.” Partnership was to last for five years, with the purpose to do business in Iloilo for

the purchase and sale of merchandise, goods and native, as well as Chinese and Japanese products

JA Say Lian Ping was appointed general manager of partnership; executed a power of attorney in favour of AY Kelam, authorizing him to act in his stead as manager and administrator of Tai Sing & Co.

AY Kelam applied for and obtained a loan of P8000 from National Bank, renewed several times

AY Kelam as attorney-in-fact executed a chattel mortagage in fabor of NB as security for a loan

AY Kelam and Tai Sing & Co executed another chattel mortgage Yap Seng, Severo Eugenio Lo, AY Kelam and Ng Khey Ling, latter represented by M.

Pineda Tayenko, executed a power of attorney in favour of Sy Tit; Sy Tit, representing Tai Sing & Co, obtained a credit of P20,000 from NB, executing a chattel mortgage on certain personal property belonging to Tai Sing & Co.

Defendant Eugenio: Tai Sing & Co. was not a general partnership; commercial credit in current account which tai Sing & Co obtained from the NB had not been authorized by board of directors, nor was the person who subscribed said contract authorized to make the same, under articles of co-partnership.

PROPERTY NOT INCLUDED IN PARTNERSHIP ASSETS – Partnership property described in the mortgage no longer existed at the time of the filing of the complaint nor has its existence been proven, nor was it offered to the plaintiff for sale. Therefore, appellants shall be personally and solidarily liable with all their property, for the results of transactions made in the name and for the account of the partnership, under the signature of the latter, and by a person authorized to use it. NORKIS DISTRIBUTORS V CA

Norkis Distributors is the distributor of Yamaha motorcycles in Negros Occidental Alberto Nepales bought brand new Yamaha Wonderbike motorcycle (P7500),

payable by means of a Letter of Guaranty from DBO As a security of loan, Nepales executed chattel mortgage on motorcycle Branch Manager of Norkis issued Sales Invoice showing that contract of sale had

been perfected Motorcycle was registered in Land Transportation Commission in the name of

Alberto nepales Motorcycle was delivered to certain Julian Nepales, allegedly agend of Alberto but

latter denies it The motorcycle met an accident

ACTUAL INTENTION OF VENDOR TO DELIVER AND ITS ACCEPTANCE BY THE VENDEE.-The issuance of a sales invoice does not prove the transfer of ownership of the thing sold to the buyer. An invoice is nothing more than a detailed statement of the nature, quantity and cost of the thing sold and has been considered not a bill of sale.

Act of delivery whether actual or constructive must be coupled with intention of delivering the thing. When the motorcycle was registered by Norkis in the name of private respondent, Norkis did not intend yet to transfer the title of ownership to Nepales, but only to facilitate the execution of a chattel mortgage in favour of DBP for the release of buyer’s motorcycle loan. PHIL SUBURBAN DEV CORP V THE AUDITOR GENERAL

President of Phils approved the acquisition by the People’s Homesite and Housing Corporation of the unoccupied portion of Sapang Palay Estate in Sta. Naria, Bulacan for relocating the squatters who desire to settle north of Manila and of another area in Las Pnas or Paranaque, Rizal or Bacoor, Cavite. The project was to be financed through the floatation of bonds under the character of PHHC in the amount of P4.5M

Board of Directors of PHHC passed Reso No 700 aouthorizing the purchase of the unoccupied portion of the Spang Palay at P0.45 per square meter

Phil Suburban as the owner of the unoccupied portion of Sapang` Palay and PHHC entyered into a contract embodied in a public instrument “Deed of Absolute Sale” whereby the former conveyed to latter two parcels of land. Not registered in The Office of the Register of deeds. Auditor General expressed objection.

Prior to the signing of deed by the parties, PHHC acquired possession of the property with the consent of petitioner

Provincial Treasurer of Bulacan requested PHHC to withhold the amount of P30,099.79 from purchase price to be paid by it to PHHC, represented real tax from 1961

Petitioner: paid under protest, claiming that it ceased to be the owner of the land in question upon the execution of the Deed of Absolute Sale

Respondent: Presumptive delivery of the property under Art 1498 does not apply because of the requirement in the contract that the sale shall be first approved by Auditor General. Until deed of absolute sale has been actually registered, the vendor remains as the owner of said property.

EXECUTION EQUIVALENT TO DELIVERY; REGISTRATION NOT REQUIRED – When tha sale of real property is made in a public instrument, the execution thereof is equivalent to the delivery of the thing object of the contract. Vendor has actually placed the vendee in possession and control over the thing sold, even before the date of the sale. Registration is not necessary to make it valid and effective, for actual notice is equivalent to registration. The registration is intended to protect the buyer against clains of third persons arising from subsequeny alienations by the vendor, not necessary to give effect to the deed of sale, as between the parties to the contract. ADDISON V FELIX AND TIOCO

Addison sold to Marciana Felix, with consent of her husband, 4 parcels of land. Felix paid at the time of execution of the deed P3000 and bound herself to pay the remainder in installment within ten years from the date of certificate of title, P10 each for each coconut tree in bearing and P5 for each tree not bearing

Stipulated that` the purchaser was to deliver to the vendor 25% of the value of products she might obtain form the parcels “from the moment she takes possession until the Torrens cert of title be issued in her favour”

Addison filed suit to compel Felix to make payment of the first instalment. Defendant answered that the plaintiff failed to deliver the lands notwithstanding the demands

After execution of deed of sale, Addison went to Lucena for the purpose of designating and delivering the lands sold. Able to designate only 2 out of 4 parcels and more than 2/3 of these were found in the possession of one Juan Villafuerte

TC: in favour of Felix, rescinded the contract IN EXECUTION = DELIVERY, NECESSARY THAT VENDOR HAS SUCH CONTROL OVER THE THING SOLD AT THE MOMENT OF SALE – Mere execution was not a fulfilment of the vendee’s obligation to deliver, and that from such non-fulfillment arises the purchasers right to demand, and as she demanded, the rescission of the sale and the return of the price. TEN FORTY REALTY AND DEVT CORP V CRUZ

Complaint for ejectment filed by Ten Forty against Marina Cruz Ten Forty is the true and absolute owner of a parcel of lot and residential house @

Olongapo City, having acquired the same from Barbara Galino by virtue of Deed of Sale

Petitioner came to know that Galino sold the same property to Cruz, who immediately occupied the said property, which was tolerated by petitioner

Ten Forty filed a case for unlawful detainer against Cruz PRESUMPTION OF TRANSFER OF OWNERSHIP UPON EXUCUTION DESTROYED BY NON-DELIVERY – Execution of public instrument gives rise only to a prima facie presumption of delivery. Such presumption is destroyed when delivery is not affected because of legal impediment. Petitioner did not occupy the property from the time it was allegedly sold to in on December 5, 1996 or at any time thereafter. RTC and Ca disagreed to petitioner’s claim that Galino’s continued stay in the premises from the time of sale up to the time respondent’s occupation of the same on April 24, 1998, was possession held on its behalf and had the effect of delivery under the law. Petitioner should have likewise been put on guard by respondent’s declaration of property for purposes of tax on April 23, 1998, which represented adverse claim over the unregistered property. HEIRS OF ARTURO REYES V SOCCO-BELTRAN

Parcel of land (Lot No 6-B) @ Zamora St., Dinalupihan, allocated to Spuses Laquian (marcelo and Constancia), who paid for the same with Japanese money.

When Marcelo died, left the land to Constancia; upon Constancia’s death, left with her heirs (siblings: Filomena, Isabel, Miguel Socco, Elena); parcel was partitioned

Elena filed an application for purchase of Lot No 6-B Petitioners, heirs of Arturo, filed protest on the ground that subject property was

sold (contract to sell) by respondent’s brother, Miguel Socco in favour of their father, Arturo; they took physical possession of property in 194 and had been uninterrupted in their possession.

VENDOR’S OWNERSHIP AT THE TIME OF DELIVERY (FUTURE INHERITANCE) – Miguel Socco was not yet the owner of the subject property and was merely expecting to inherit the same as his share as co-heir of Constancia’s estate. It was a conditional sale –sale of property in favour of Arturo was conditioned upon the event that Miguel Socco would actually inherit and become the owner. No valid sale. RUDOLF LIETZ, INC V CA

Agapito Buriol previously owned a parcel of unregistered lsnd @ Capsalay Island, Port Barton, San Vicente, Palawan

Buriol enetered into alease agreement with Flavia Turatello and respondent Turatello and Sani (Italian), involving 1 hectare of Buriol’s property for period of 25 years, renewable for another 25 years

Buriol sold to Rudolf Lietz, Inc the same parcel of land for P30,000 Petitioner discovered that Buriol owned only 4 hectares and with one more hectare

covered by lease, only three hectares were actually delivered to petitioner. Petitioner sought for annulment of lease with recovery of possession with injuction

and damages – evident bad faith and malice DELIVERY OF VENDOR LESS THAN THE AREA AGREED – vendee may oblige the vendor to deliver all that may be stated in the contract or demand for the proportionate reduction of the purchase price if the delivery is not possible. If the vendor delivers more than the area stated in the contract, the vendee hsd the option to accept only the amount agreed upon or to accept the whole area, provided he pays for the additional area. SALINAS V FAUSTINO

Bienvinido Faustino, by Deed of Sale, purchased from his co-heirs their respective shares to a parcel of land coverd by Tax Declaration No. 14687, with superficial area of 300.375 sqm more or less

Faustino joined by his wife filed a complaint for recovery of possession alleging that the parcel of land he bought via Deed of Sale from his co-heirs consisted of 1381 sqm; they allowed petitioner and co-heirs to occupy and build a house on a 627 sqm portion of land on the condition that they would voluntarily and immediately remove the house and vacate the land should they need the land

Petitioner: owner of 628 sqm CONTRACT OF SALE OF LAND IN A MASS – The specific boundaries sated in the contract with respect to the area contained within the boundaries. Thus, it is the boundaries indicated in a deed of sale, not the area in sqm mentioned therein that control in the determination of which portion of the land the vendee acquires. DE LEON V ONG

Raymond De Leon sold 3 parcels of land with improvements @ Antipolo Rizal to Benita Ong

As these properties were mortgaged to Real Savings and Loan Association, Inc. (RSLAI), De Leon and Ong executed a notarized deed of absolute sale with assumption of maortgage

Ong gave De Leon P415,500 as partial payment; de leon handed the keys and wrote a letter to RSLAI of the sale and authorizing it to accept payment from Ong and release certificates of title

Ong undertook repairs and made improvements on the properties Ong learned that de Leon again sold the same properties to Leona Viloria and

changed the locks; informed by RSLAi that De Leon already paid the amount due and had taken back the certificates of title

Ong filed complaint for specific performance and declaration of nullity SELLER’S OBLIGATION TOTRANSFER TITLE AND DELIVER – Art 1498 provides that execution of notarized deed of sale is equivalent to delivery. Totality of petitioner’s acts (execution, turn over of keys, authorization to RSLAI) indicates that he had unqualifiedly delivered and transferred ownership of the properties to respondent. It was a contract of sale. ASSET PRIVATIZATION TRUST V TJ ENTERPRISES

Asset Privatization Trust (government entity created for the purpose to conserve, to provisionally manage and to dispose assets of the government institutions) acquired from DBP assets consisting of machinery and refrigeration equipment, stored at Golden City compound, Pasay City (which was leased to and in the physical possession of Creative Lines, Inc. Assets were being sold on an as-is where-is basis.

Asset Privatization and TJ Enterprises entered into absolute deed of sale over certain machinery and refrigeration equipment (Lot Nos. 2, 3, 5), paid in full P84000

After 2 days, demanded delivery; petitioner issued Gate Pass 4955 Respondent was able to pull out from the compound properties (Lots 3 and 5).

During hauling of Lot 2, consisting 16 items, only 9 items were pulled out Responded filed a complaint for specific performance

NO CONSTRUCTIVE DELIVERY – Presumption that execution of deed of sale is equivalent to delivery is destroyed when the delivery is not effected because of a legal impediment. It is necessary that the vendor shall have control over the thing sold that, at the moment of sale, its material delivery could have been made. Thsu, aperson who does not have actual possession of the thing sold cannot transfer constructive possessionby execution and delivery of public instrument. AS-IS WHERE-IS BASIS – Pertains solely to the physical condition of the thing sold, not its legal situation. It is merely descriptive of the state of the thing sold. The depiction does not alter petitioner’s liability to deliver the property to respondent. BOARD OF LIQUIDATORS V FLORO, ET.AL

Melencio Malabanan entered into an agreement with the Board of Liquidators for the salvage of surplus properties sunk in territorial water off the provinces of Mindoro, La Union and Batangas

Malabanan was to commence operations within 30 days from execution of said contract, which was to be effective for a period of one year from the start of operations, extendible for a total period of not more than 6 months

Malabanan requested for an extension of one year for salvage in waters of Mindoro and batangas, Board extended the contract

Malabanan requested second extension of one more year for the waters of Occidental Mindoro, Board extended the contract

4 moths previously, Malabanan entered into an agreement with Exequiel Floro that Floro would advance to Malabanan certain sums of money, not to exceed P25000, repayment being secured by quantities of steel mattings which Malabanan would consign to Floro. Upon default, Floro was authorized to sell whatever steel mattings in his possession in an amount sufficient to satisfy the advances

Malabanan unable to pay; Floro sold 11, 047 pieces of steel mattings to Eulalio Legaspi

17 days later, Malabanan filed a petition for voluntary insolvency Board claiming to be the owner of steel mattings, filed a petition to exclude them

from the inventory RESERVATION OF TITLE – The contract between Malabanan and the Board had the effect of vesting Malabanan with title to, or ownershipof, the steel mattings in question as soon as they were brought up from the bottom of the sea. While there can be reservation of title in the seller until full payment of price (1478), or until fulfilment of condition (1505), and while the execution of public instrument amounts to delivery only when from the deed the contrary does not appear or cannot clearly be inferred, there is nothing in the said contract which may be deemed a reservation of title, or from which it may clearly be inferred that delivery was not intended. TRADITIO LONGA MANU (1499) – There was no physical tradition. There was one by agreement. SAN LORENZO DEVT CORP V CA Miguel Lu and`Pacita Zavalla (Spouse Lu) owned 2 parcels of land @ Sta. Rosa,

Laguna Spouses Lu sold to Pablo Babasanta for P15 per sqm. Babasanta made a

downpayment of P50000. Several other payments (totalling P200,000) were made by Babasanta

Babasanta wrote to Pacita Lu demanding the execution of a final deed of sale so that he could effect full payment. Notified spouses Lu about having knowledge of second sale to another and such be cancelled

Lu: reminded Babasanta that when balance of purchase price became due, he required for a reduction of price and when she refused, Babasanta backed out the sale. She returned P50,000 to Babasanta through Eugenia Oya

Babasanta filed before RTC a complaint for specific performance Spouses Lu: Pacita obtained loans from Babasanta and when total advances of Pacita

reached P50,000, the latter and Babasanta had verbally agreed to transform the transaction to contract to sell the 2 parcels to Babasanta with downpayment of P50,000

SLDC filed motion for intervention: owner of the parcels by Deed of Absolute Sale with Mortgage; purchaser in good faith

WHO HAS BETTER RIGHT BETWEEN SLDC AND BABASANTA? – Babasanta did not acquire ownership by the mere execution of the receipt by Pacita Lu acknowledging receipt of partial payment for the property. The agreement between Babasanta and Spouses Lu,

though valid, was not embodied in a public instrument. Hence, no constructive delivery has been effected. Babasanta had not taken possession of the property at any time after the perfection of the sale in his favour or exercised acts of dominion over it despite his assertions that he was the rightful owner of the lands, NO delivery to Babasanta, actual or constructive, DOUBLE SALE (1544) – Principle of primus tempore, potior jure (first in time, stronger in right). The one who acquires and first records it in the Registry of Property, both made in good faith, shall be deemed the owner. As early as Feb 11, 1989, Spouses Lu executed Option to Buy in favour of SLDC upon receiving of Absolute Sale in favour of SLDC. At time of execution, SLDC has no knowledge of prior transaction wih Babasanta. Upon learning, SLDC registered the sale with registry of Property. Thus, SLDC has better right. ABUAN V GARCIA

Acquired by Laurencio Abuan, the homestead passed afterbhis death to his legal heirs (plaintiffs)

Plaintiffs sold the parcel of land to defendants (Deed of Abosolute Sale) Plaintiffs: action to recover the land, alleging that deed of sale had been executed

through fraud, without consideration Subsequently settled amicably (defendants paid P500 as partial payment, promised

to pay balance of P1500 on or before April 30, 1955, with grace period of 30 days) Full payment effected only sometime in May 1955; Plaintiffs instituted present

action for legal redemption Defendants: Motion to dismiss; plaintiff’s right of action already barred because 5-

year redemption period had already expired WHEN DID THE 5-YR PERIOD BEGIN TO RUN? UPON EXECUTION OF DEED OF SALE? UPON ENTERING INTO COMPROMISE AGREEMENT? UPON FULL PAYMENT? – It is counted from either of the first two dates. Law speaks of “five year period upon conveyance” It ia apparent that five years had elapsed since the execution of the deed of absolute sale at the time plaintiffs filed the action for redemption. DY, JR. V CA Perfecto Dy and Wilfredo Dy are brothers. Wilfredo Dy purchased a truck and a farm tractor through financing extended by

Libra Finance and Investment Corp, both were mortgaged to Libra as security loan. Petitioner Perfecto wanted to Buy the tractor from his brother; he wrote a letter to

Libra requesting that he be allowed to purchase and assume the mortgage, approved

Wilfredo executed a deed of absolute sale At this time, subject tractor was in the possession of Libra Finance due to Wilfredo’s

failure to pay amortizations Libra refused to release the tractor despite petitioner’s offer to pay in full because it

also insisted for the payment of truck

Wilfredo convinced her sister Carol Dy-Seno to purchase the truck; issued a check; Libra insisted it should be cleared first before the release

Meanwhile, a collection case to recover sum of money “Gelac Trading v Wilfredo Dy” was pending; provincial sheriff was able to seize and and levy on tractor which was on the premises of Libra; tractor was sold in public auction where Gelac Trading was the lone bidder, which later sold to Antonio Gonzales

When check was cleared, petitioner learned about the Gelac having taken custody of the tractor

Wilfredo filed an action to recover CONSTRUCTIVE DELIVERY – Art 1496 states that the ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Arts 1497-1501 or in any other manner signifying agreement that the possession is transferred from the vendor to the vendee. (Note: Art 1498 and 1499) Actual delivery of the subject tractor could not be made. However, there was a constructive delivery already upon the execution of the public document (1498) and upon the consent or agreement of the parties when the thing sold cannot be immediately transferred to the possession of the vendee. MORTGAGEE CANNOT BECOME THE OWNER - While it is true that Wilfredo was not in actual possession and control of the subject tractor, his right of ownership was not divested from him upon its default. Neither could it be said that Libra was the owner of the subject tractor because the mortgagee cannot become the owner of or convert and appropriate to himself the property mortgaged (Art 2208). Said property continues to belong to the mortgagor. The only remedy of the mortgagee is to have the said property sold at public auction and the proceeds of the sale applied to the payment of obligation secured by the mortgagee. INDUSTRIAL TEXTILE MANUFACTURING COMPANY OF THE PHILS V LPJ ENTERPRISES

LPJ enterprises had a contract to supply 300,000 bags of cement per year to Atlas Consolidated Mining and Development Corporation, a member of the Soriano Group of Companies.

Cesar Campos (VP of Industrial Textile) asked Lauro Panganiban Jr (President of LPJ) if he would like to cooperate in an experiment to develop plastic cement bags, Panganiban acquiesced.

Panganiban accompanied Paulino Ugarte (another VP of Industrial) to the factory of respondent’s supplier, Luzon Cement Corp in Norzagaray, Bulacan, to test 50 pieces of plastic cement bags; unsuccessful; second trial was likewise a failure.

Finally, with 300 “improved bags”, seepage was reduced. Ugarte asked Panganiban to send 180 bags of cement to Atlas via commercial

shipping; Campos, Ugarte and two other officials of Industrial followed the 180 bags to Plant of Atlas in Sangi, Toledo, Cebu where they professed satisfaction at the performance of their own plastic bags

Campos sent Panganiban a letter proclaiming drastic results in the experiment; Panganiban agreed to use the plastic cement bags. Four purchases were issued. Industrial delivered, respondent remitted the payments, leaving a balance of P84,123.80

No other payments were made; petitioner sent demand letters to respondent corporation.

Respondent: admitted liability in first purchase order, but denied second, third, fourth purchase orders. As for the remaining 47,000 bags, workers of Luzon Cement objected to the use thereof due to serious health hazards. Petitioner was asked to take back the unused plastic bags.

Petitioner: respondent’s obligation to return the bags to them. Failure to do so, petitioner demanded payment.

SALE OR RETURN / SALE ON APPROVAL – Art 1502 inapplicable because to make sales contract either a ‘sale or return” or a “sale on approval”, it clearly requires a written agreement. Parol or extrinsic testimony could not be admitted for the the purpose of showing that an invoice or bill of sale that was complete in every aspect and purporting to embody a sale without condition or restriction constituted a contract of sale or return. If the purchaser desired to incorporate a stipulation securing him the right to return, he should have done so at the time the contract was made. On the other hand, the buyer cannot accept part and reject the rest of the goods since this falls outside the normal intent of the parties in the “on approval” situation.