First Five Case Digests

Civil Law: Law on Sales

Dignos vs. Court of Appeals

Dignos owned a lot which was sold to Jabil on June 1965 payable in two installment with an assumption of indebtedness with First Insular Bank in the sum of 12000 which was paid to Digno and the next installment to be payed on September of the same year.

On November 1965, Dignos sold the same property to Cabigas. A deed of sale was executed and registered with the Register of Deed.

As Dignos refused the payment of second installment from Jabil, and after the knowledge by the latter of the sale to Cabigas, Jabil filed the instant case.

CFI Cebu rendered a decision voiding the sale of Dignos to Cabigas and awarding the sale to Jabil. CA affirmed the decision.

SC: Dignos reiterated that the sale is conditional and not absolute, such the same is subject to suspensive condition of payment in two installment.

A sale is absolute although denominated as contract of conditional sale where no where in the contract is a stipulation to effect that the title of the property is reserved to vendor until full payment, nor is there a stipulation giving the vendor the right to unilaterally rescind the contract upon non-fulfillment of obligation. The present case presents the same situation.

Valid elements of the contract of sale: 1. consent or meetings of the mind, 2. determinate subject matter, 3. price certain in money or its equivalent.

Dignos claimed that when they sold the property to Cabigas the previous contract has been already rescinded. It is undisputed that Dignos never notified Jabil of the rescission nor they filed in court an action to rescind such. SC AFFIRMED in toto the CA decision.


Nool vs. Court of Appeals

Conchita Nool owned a lot which was mortgaged to DBP when she secured a loan. Upon non-payment of loan it was foreclosed by DBP. Within the time of redemption Conchita contacted Anacleto Nool to redeem the foreclosed property which the latter did. The titles were transferred to Anacleto but it was agreed that Conchita can get back the property soon when she has money. Conchita asked the Anacleto for the return of the property but the latter refused even after the intervention of the barangay. The case was filed.

Anacleto theorized that the lands were acquired by them from DBP through negotiated sale. He argued that he was made to believe that the property was still owned by Conchita when they agreed of redemption.

RTC said it was DBP who was the owner of the property when the sale to Anacleto was made. DBP became the absolute owner of the property after the redemption period of the foreclosed property had lapsed. RTC denied the action by Conchita. It was affirmed by CA.

SC: The contract of repurchase entered by Conchita and Anacleto was void there being no subject to speak of. It is clear that Conchita was no longer the owner of the property when such agreement was made with Anacleto. It is likewise clear that the seller can no longer deliver the object of the sale to the buyer, as the buyer had already acquired the title from the rightful owner. Jurisprudence teaches us that a person can only sell what he owns or is authorized to sell ; the buyer can acquire no more that what the seller can legally transfer.

The right to repurchase presupposes a valid contract of sale between the same parties. CA is decision AFFIRMED. Petition is DENIED.

People’s Homesite vs. Court of Appeals

People’s Homesite (PHHC) passéd a resolution subject to the approval of the city council of the Lot 4 as it is hereby awarded to Mendoza. The city council disapproved the proposal. The Mendozas were notified through registered mail. Another subdivision plan was passed and was approved by the city council. PHHC passed a resolution recalling all awards to persons who failed to pay the agreed downpayment. Mendoza never paid the down payment. The questioned award of lot was withdrawn and was re-awarded to other 5 persons. Mendoza asked for reconsideration but before it was acted, He instituted the action.

Trial court sustained the withdrawal while the CA reversed the decision.

SC: There was no perfect sale of Lot 4 to Mendoza. It was conditionally awarded to Mendoza subject to city council’s approval which was disapproved. When after the city council approved such, Mendoza should have manifested his intention over the said award but he did not so.

The contract of sale is perfected at the moment there is a meeting of the mind upon the thing which is the object of the contract and upon the price. In conditional obligation, the acquisition of rkights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitute the condition. In this case, there was no meeting of the minds.


Heirs of Juan San Andres vs. Rodriguez

Juan San Andres sold a portion of his property to Rodriguez as evidenced by a Deed of Sale. Upon his death Ramon San Andres was appointed as administrator of the property. He hired a land surveyor and found that Rodriguez enlarged the property he bought from late Juan. Ramon demanded form the Rodriguez to vacate the portion allegedly occupied but the latter refused hence the present action.

Rodriguez said that the excess portion was also sold to him by late Juan the following day after the first sale. He argued that the full payment of the whole sold lot would be effected within five years from the execution of the formal deed of sale after a survey of the property is conducted, as evidenced by a receipt of sale. The balance of the purchase price was consigned.

RTC ruled in favor of petitioner while CA reversed the ruling. In SC petitioner argued that there is no certain object of the contract of sale as the lot was not described with sufficiency that there should be another contract to finally ascertain the identity.

SC: Petition has no merit. The contract of sale has the following elements: 1. consent or meeting of the minds, 2. determinate subject matter, 3. price certain in money.

There is no dispute that Rodriguez purchased a potion of Lot 1914-B consisting of 345 square meters. The said portion is located at the middle of the lot. Since the lot subsequently sold is said to adjoined the previously paid lot, the subject is capable of being determined without the need of another contract.

However, there is a need to clarify what CA said is a conditional sale. CA considered as a condition the stipulation of the parties that the full consideration, based on a survey of the lot, would be due and payable within 5 years from the execution of the formal deed of sale.

It is evident in the stipulation in the receipt that the vendor late Juan sold the lot to Rodriguez and undertook the transfer of ownership without any qualification, reservation or condition.

In can be gainsaid from the facts that the contract of sale is absolute, and not conditional. There is no reservation of ownership nor stipulation providing for a unilateral rescission by either party. In fact the sale was consummated upon the delivery of the lot to Rodriguez. Art.1477 provides that the ownership of the thing sold shall be transferred to the vendee upon the actual or constructive deliver thereof.
The stipulation that the payment of the full consideration based on a survey shall be due and payable in 5 years from the execution of the formal deed of sale is not a condition which affects the efficacy of contract.
CA decision is AFFIIRMED.


Galang vs. Court of Appeals

Buenaventuras sold to Galangs the property they inherited from their parents. The agreement was embodied in the Deed of Sale. The agreements as to payment were as follows: 25% of the purchase price is to be paid upon the signing, 25% within 3 months or upon the removal of encargo from the premises, with the delivery of the owner’s duplicate certificate, 50% is within 1 year upon which the title will be transferred. Galangs paid the first 25% of the price. Thereafter they demanded the removal of the encargo and the delivery of the duplicate title. Buenaventuras failed to do so despite the willingness of Galangs to pay the other 25%. Galangs filed the instant action for specific performance.

The trial court rescinded the contract despite the prayer of Galang for specific performance. It ruled that impossible condition, those contrary to good custom or public policy and those prohibited by law shall annul the obligation which depends upon them. Since the consummation of sale is dependent upon the ouster of agricultural lessees which cannot be done because it is against good custom, public policy and the law, the sale is a nullity. CA affirmed the ruling.

SC: We disagree with the conclusion of the two lower courts. Reviewing the terms of the Deed of Sale, it is clear that the parties had reached the stage of perfection of the contract of sale.

The alleged condition precedent, the removal of the encargo, was simply an alternative for payment of another 25% of the purchase price given by the seller. Assuming that the removal of encargo could not be brought about by the buyer, petitioner could have demanded the duplicate of the owners certificate of title by paying 25% of the sale price within 3 months.

The case before us could have been resolved by the lower court without ruling on the whether the encargo was a tenant or not. Granting that it was necessary to rule on the status of the encargo, we find that the courts had been quite precipitate in holding that the encargi was a tenant. Petition is GRANTED.