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JOSE FLORENDO v. EUSTAQUIO P. FOZ Facts: Eustaquio P.

Foz executed in Manila a contract, ratified before a notary, obligating himself to deliver his house and lot for a consideration of P6,000 to Jose Florendo. The latter already paid P2,000 of the purchase prize. In the contract, plaintiff fixed the period of the payment of the prize wherein plaintiff has to pay the remainder of the prize when he goes to Vigan or if not to pay to the Church wherein he has a debt and to obtain the title of the subject matter of the sale. Defendant went to Vigan, plaintiff tendered payment of the remainder of the prize, however, the former refused, saying that the true prize of the sale recorded in the other instrument was P10,000. As defendant refused payment, plaintiff filed a suit to comply with the contract of absolute purchase and sale, by delivering to the plaintiff the property sold. Issue: WON the plaintiff can compel the defendant to deliver his property pursuant to the notarized contract. Held: Yes. The contract is valid and effective. From the validity and force of the contract is derived the obligation on the part of the vendor to deliver the thing sold. Pursuant to the contract, it cant be found that the payment of the prize is a precondition for the delivery of the thing. There was no need, therefore, of assent on the part of the plaintiff to pay the P4,000, the remainder of the price, in order to oblige the defendant unconditionally to deliver the property sold. With still more reason should the defendant be compelled to effect the material delivery of the property, since, after the lapse of the period for the delivery of the price, the plaintiff hastened to pay it and, on account of the defendant's refusal to receive it, duly deposited it, in order to avoid the consequences that might issue from delinquency in the payment of a sum entrusted to him for a fixed period. It is the material delivery of the property sold which the defendant must make in compliance with the contract, inasmuch as the formal delivery de jure was made, according to the provisions of article 1462, 2nd paragraph, of the same code.

Deed of Absolute Sale whereby the former conveyed unto the latter the unoccupied portion of the Sapang Palay Estate. This was not registered in the Office of the Register of Deeds until March 14, 1961, due to the fact, petitioner claims, that the PHHC could not at once advance the money needed for registration expenses. On April 12, 1961, the Provincial Treasurer of Bulacan requested the PHHC to withhold the amount of P30,099.79 from the purchase price to be paid by it to the Philippine Suburban Development Corporation. Said amount represented the realty tax due on the property involved for the calendar year 1961. Petitioner, through the PHHC, paid under protest the abovementioned amount and thereafter, by letter, requested then Secretary of Finance Dominador Aytona to order a refund of the amount so paid. Upon recommendation of the Provincial Treasurer of Bulacan, said request was denied by the Secretary of Finance. ISSUE: WON there was already a valid transfer of ownership between the parties and thus petitioner is entitled for a refund. HELD: YES. there was already a valid transfer of ownership. Under the civil law, delivery (tradition) as a mode of transmission of ownership maybe actual (real tradition) or constructive (constructive tradition). When the 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, if from the deed the contrary does not appear or cannot clearly be inferred. In other words, there is symbolic delivery of the property subject of the sale by the execution of the public instrument, unless from the express terms of the instrument, or by clear inference therefrom, this was not the intention of the parties. made. In the case at bar, there is no question that the vendor had actually placed the vendee in possession and control over the thing sold, even before the date of the sale. The condition that petitioner should first register the deed of sale and secure a new title in the name of the vendee before the latter shall pay the balance of the purchase price, did not preclude the transmission of ownership. In the absence of an express stipulation to the contrary, the payment of the purchase price of the good is not a condition precedent to the transfer of title to the buyer, but title passes by the delivery of the goods. It goes without saying that the petitioner is entitled for a refund.

Philippine Suburban Dev Corp vs Auditor General FACTS: Petitioner Philippine Suburban Development Corporation, as owner and Peoples Homesite and Housing Corporation (PHHC), as authorized by the President of the Philippines, entered into a contract embodied in a public instrument entitled

BOARD OF LIQUIDATORS v. EXEQUIEL FLORO FACTS: Melecio Malabanan entered into an agreement with the Board of Liquidators for the salvage of surplus properties sunk in territorial waters off the provinces of Mindoro, La Union, and Batangas. Malabanan submitted a recovery report dated July 26, 1954, wherein it is stated that he had recovered a total of 13,107 pieces of steel mattings from the opreations. Four months previously, Malabanan had entered into an agreement with Exequiel Floro, agreeing that Floro would advance to Malabanan certain sums of money, not to exceed P25,000.00, repayment, thereof being secured by quantities of steel mattings which Malabanan would consign to Floro. Pursuant thereto, Floro claims to have made total advances to the sum of P24,224.50. It appears that as Malabanan was not able to repay Floro's advances, the latter, sold 11,047 pieces of steel mattings to Eulalio Legaspi for the sum of P24,803.40. Seventeen days later, on August 21, 1954, Malabanan filed in the Court of First Instance of Manila a petition for voluntary insolvency, attaching thereto a Schedule of Accounts, in which the Board was listed as one of the creditors for P10,874.46, and Exequiel Floro for P24,220.50. The controversy of the case arose when Malabanan listed the steel mattings as its properties, which was opposed by the Board claiming ownership over the steel mattings recovered from the salvaging operations. ISSUE: WON Malabanan has title to the steel mattings.

CARMEN DEL PRADO v. SPOUSES ANTONIO L. CABALLERO FACTS: In a judgment rendered on February 1, 1985 in Cadastral Case , Regional Trial Court (RTC) of Cebu City, adjudicated in favor of Spouses Antonio L. Caballero and Leonarda B. Caballero several parcels of land, one of which was Cadastral Lot subject of this controversy. On June 11, 1990, respondents sold to petitioner, Carmen del Prado, Lot No. 11909 measuring 4000 sq. m. on the basis of the tax declaration covering the property. Original Certificate of Title, covering Lot No. 11909, was issued only on November 15, 1990, and entered in the "Registration Book" of the City of Cebu on December 5 19, 1990. Therein, the technical description of Lot No. 11909 states that said lot measures about 14,457 square meters, more or less. Petitioner filed in the same cadastral proceedings a "Petition for Registration of 7 Document Under Presidential Decree (P.D.) 1529" in order that a certificate of title be issued in her name, covering the whole Lot No. 11909. In the petition, petitioner alleged that the tenor of the instrument of sale indicated that the sale was for a lump sum or cuerpo cierto. Respondents opposed, on the main ground that only 4,000 sq m of Lot No. 11909 was sold to petitioner. They claimed that the sale was not for a cuerpo cierto. They moved for the outright dismissal of the petition on grounds of prescription and lack of jurisdiction.

HELD: YES. Malabanan has title to the steel mattings. The Court held that the contract between Malabanan and the Board had effect of vesting Malabanan with title to, or ownership of the steel mattings in question as soon as they were brought up from the bottom of the sea. This was shown from the agreement between the parties wherein it is said that ownership of the goods passed to Malabanan as soon as they were recovered or salvaged and not only after payment of the stipulated price. The contention that there was no delivery is incorrect. While there was no physical tradition, there was one by agreement (traditio longa manu) in conformity with Article 1499 of the Civil Code. Art. 1499 The delivery of movable property may likewise be made by the mere consent or agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the vendee at the time of the sale. As observed earlier, there is nothing in the terms of the public instrument in question from which an intent to withhold delivery or transfer of title may be inferred.

ISSUE: Whether or not the sale of the land was for a lump sum. HELD: YES. The sale of the land was for a lump sum. Where both the area and the boundaries of the immovable are declared, the area covered within the boundaries of the immovable prevails over the stated area. In cases of conflict between areas and boundaries, it is the latter which should prevail. What really defines a piece of ground is not the area, calculated with more or less certainty, mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. In a contract of sale of land in a mass, it is well established that the specific boundaries stated in the contract must control over any statement with respect to the area contained within its boundaries. The Court, however, clarified that the rule laid down in Article 1542 is not hard and fast and admits of an exception. It held: A caveat is in order, however. The use of "more or less" or similar words in designating quantity covers only a reasonable excess or deficiency. A vendee of

land sold in gross or with the description "more or less" with reference to its area does not thereby ipso facto take all risk of quantity in the land. In the instant case, the deed of sale is not one of a unit price contract. The parties agreed on the purchase price of P40,000.00 for a predetermined area of 4,000 sq m, more or less. In a contract of sale of land in a mass, the specific boundaries stated in the contract must control over any other statement, with respect to the area contained within its boundaries.

boundaries, inasmuch as it is the entirety thereof that distinguishes the determinate object. JOSE SANTA ANA v. ROSA HERNANDEZ FACTS: The petitioners herein, spouses Jose Santa Ana, Jr. and Lourdes Sto. Domingo, owned a 115,850-square meter parcel of land situated in Sta. Maria, Bulacan. They sold two separate portions of the land for P11,000.00 to the herein respondent Rosa Hernandez. After the sale (there were two other previous sales to different vendees of other portions of the land), the petitioners-spouses caused the preparation of a subdivision plan, which was approved by the Director of Lands. Rosa Hernandez, however, unlike the previous vendees, did not conform to the plan and refused to execute an agreement of subdivision and partition for registration with the Register of Deeds of Bulacan; and she, likewise, refused to vacate the areas that she had occupied. Instead, she caused the preparation of a different subdivision plan approved by the Director of Lands. Petitioners-spouses filed suit against respondent Rosa Hernandez in the Court of First Instance of Bulacan, claiming that said defendant was occupying an excess of 17,000 square meters in area of what she had bought from them. Defendant Rosa Hernandez, on the other hand, claimed that the alleged excess, was part of the areas that she bought. Thus, this instant petition. ISSUE: Whether or not Art. 1542 applies in this case. RULING: YES. Art. 1542 applies in this case. Based on the findings of the CA that the boundaries have been sufficiently stated, that can not be questioned at this stage. It is unquestionable that the sale made was of a definite and identified tract, a corpus certum, that obligated the vendors to deliver to the buyer all the land within the boundaries, irrespective of whether its real area should be greater or smaller than what is recited in the deed. And this is particularly true where, as in the case now before this Court, the area given is qualified to be approximate only, i.e., more or less. To hold the buyer to no more than the area recited on the deed, it must be made clear therein that the sale was made by unit of measure at a definite price for each unit.

RUDOLF LIETZ, INC.v. CA FACTS: Respondent Agapito Buriol previously owned a parcel of unregistered land situated in San Vicente, Palawan. Respondent Buriol entered into a lease agreement with Flavia Turatello and respondents Turatello and Sani, all Italian citizens, involving one (1) hectare of respondent Buriols property. Later, respondent Buriol sold to petitioner Rudolf Lietz, Inc. the same parcel of land for the amount of P30,000.00. The sale was absolute. Petitioner later discovered that respondent Buriol owned only four hectares, and with one more hectare covered by lease, only three hectares were actually delivered to petitioner. Thus, petitioner instituted on April 3, 1989 a complaint for Annulment of Lease with Recovery of Possession with Injunction and Damages against respondents and Flavia Turatello before the RTC. ISSUE: Whether or not petitioner is entitled to the delivery of the entire five hectares or its equivalent. HELD: NO. The sale between petitioner and respondent Buriol involving the latters property is one made for a lump sum. The Deed of Absolute Sale shows that the parties agreed on the purchase price on a predetermined area of five hectares within the specified boundaries and not based on a particular rate per area. In accordance with Article 1542, there shall be no reduction in the purchase price even if the area delivered to petitioner is less than that stated in the contract. In the instant case, the area within the boundaries as stated in the contract shall control over the area agreed upon in the contract. Where both the area and the boundaries of the immovable are declared, the area covered within the boundaries of the immovable prevails over the stated area. In cases of conflict between areas and boundaries, it is the latter which should prevail. Thus, the obligation of the vendor is to deliver everything within the

LUIS ASIAIN, vs. BENJAMIN JALANDONI FACTS: Luis Asiain, the plaintiff-appellant in this case, is the owner of the hacienda known as Maria situated in the Province of Occidental Negros, containing about 106 hectares. Benjamin Jalandoni, the defendant-appellee, is the owner of another hacienda adjoining of Asiain. They entered into a contract of sale of real property. Asiain promised to deliver and transfer ownership of a land he estimated for 25 hectares, with a sugar cane which can produce about 2000 piculs of sugar. Jalandoni acceded, but had some doubt as to the estimation. Once in possession of the land, Jalandoni did two things. He had the sugar cane ground in La Carlota Sugar Central with the result that it gave and output of P800 piculs and 23 cates of centrifugal sugar. When opportunity offered, he secured the certificate of title of Asiain and produced a surveyor to survey the land. According to his survey, the parcel in question contained an area of 18 hectares, 54 ares, and 22 centiares. Of the purchase price of P55,000, Jalandoni had paid P30,000, leaving a balance unpaid of P25,000. To recover the sum of P25,000 from Jalandoni or to obtain the certificate of title and the rent from him, action was begun by Asiain in the Court of First Instance of Occidental Negros. In answer, Jalandoni asked for the annulment of the Contract. ISSUE: WON the contract of sale can be annulled. RULING: YES. This was not a contract of hazard. It was a sale in gross in which there was a mutual mistake as to the quantity of land sold and as to the amount of the standing crop. The mistake of fact as disclosed not alone by the terms of the contract but by the attendant circumstances, which it is proper to consider in order to throw light upon the intention of the parties, is, as it is sometimes expressed, the efficient cause of the concoction. The mistake with reference to the subjectmatter of the contract is such that, at the option of the purchaser, it is rescindable. Without such mistake the agreement would not have been made and since this is true, the agreement is inoperative and void. It is not exactly a case of over reaching on the plaintiffs part, or of misrepresentation and deception, or of fraud, but is more nearly akin to a bilateral mistake for which relief should be granted. Specific performance of the contract can therefore not be allowed at the instance of the vendor.

LEODEGARIO AZARRAGA vs. MARIA GAY FACTS: The parties agreed to the sale of two parcels of land, the first one containing 102 hectares, 67 ares and 32 centares, and the second one containing about 98 hectares, for the lump sum of P47,000 payable partly in cash and partly in installments. Said two parcels are defind by means of the boundaries given in the instrument. Defendant-Appellant paid P5,000 to the Plaintiff when the contract was signed. The latter delivered the Torrens title to the first parcel to the vendee who, pursuant to the agreement, paid him P20,000. In the month of March 1921, Torrens title to the second parcel was issued and forthwith delivered by the vendor to the vendee who, however, failed to pay the P10,000 as agreed, neither did she pay the remaining P12,000 one year after having received the Torrens title to the second parcel. The plaintiff here claims the sum of P22,000, with legal interest. The defendant admits that she purchased the two parcels of land referred to by plaintiff, by virtue of the deed of sale, but alleges in defense there was grave misrepresentation as to the area of the second parcel of land which led the latter to enter into the contract of sale. ISSUE: WON the plaintiff is entitled for the unpaid balance. RULING: YES. Plaintiff is entitled. The case falls within the provision of article 1471 par. 1. of the Civil Code, which reads as follows: ART. 1471. In case of the sale of real estate for a lump sum and not at the rate of a specified price for each unit of measure, there shall be no increase or decrease of the price even if the area be found to be more or less than that stated in the contract. It seems clear to us that the rule formulated for the second paragraph of article 1471 is inapplicable in the instant case inasmuch as all the land included within the boundaries of the two parcels sold has been delivered in its entirety to the vendee. There is no division of the land enclosed within the boundaries of the properties sold; the determinate object which is the subject matter of the contract has been delivered by the vendor in its entirety as he obligate himself to do. Therefore, there is no right to complain either on the part of the vendor, even if there be a greater area than that stated in the deed, or on the part of the vendee, though the area of the second parcel be really much smaller.

VISAYAN DISTRIBUTORS, INC. vs. MARIANO R. FLORES FACTS: Defendants Flores and Abeto entered into a contract with plaintiff whereby the former will deliver to the latter 2,000 long tons of copra. The plaintiff made an advance payment after the perfection of the contract. However, the defendants refused to deliver the said copra on the ground that the plaintiff is insolvent and failed to guarantee the payment of the purchase price by a letter of credit called for in the contract. As a result, the plaintiff instituted an action against the defendants. The lower court rendered a judgment in favor of the plaintiff.

HELD: The place of delivery was Manila and plaintiff has not legally excused default in delivery of the specified merchandise at that place. The Court believes that the word Manila in conjunction with the letters "c.i.f." must mean that the contract price, covering costs, insurance, and freight, signifies that delivery was to be made in Manila. If the plaintiff company has seriously thought that the place of delivery was New York and Not Manila, it would not have gone to the trouble of making fruitless attempts to substitute goods for the merchandise named in the contract, but would have permitted the entire loss of the shipment to fall upon the defendant. Under plaintiffs hypothesis, the defendant would have been the absolute owner of the specific soda confiscated at Penang and would have been indebted for the contract price of the same. Both the terms "c.i.f." and "F.O.B." merely make rules of presumption which yield to proof of contrary intention. As Benjamin, in his work on Sales, well says: "The question, at last, is one of intent, to be ascertained by a consideration of all the circumstances."

ISSUE: WON the defendants are still bound to deliver or make deliver despite of the insolvency of the plaintiff.

HELD: Yes. Defendants are still bound to deliver. There is no conclusive proof showing that Abeto and Flores, in definite terms, had warned the appellee that they would not deliver the copra called for in their contract until they were sure of being paid in accordance with said contract. Moreover, even assuming that the appellee still owed Abeto and Flores something upon account of the 159,834 kilos of copra delivered before November 18, 1946, said fact is not a positive evidence of insolvency, and to mention the circumstance that the contract is essentially a cash transaction, 95 per cent of the purchase price being required to be paid in cash and only 5 percent by an irrevocable letter of credit. Of course, the appellee was not to be expected to tender payment before the presentation of the documents called for in the contract, namely, commercial invoice, on board bills of lading, and wage certificate and/or survey report. BEHN, MEYER & CO. (LTD) vs. TEODORO R. YANCO FACTS: The plaintiff entered into a contract with defendant. It was agreed that the plaintiff will deliver 80 drums of caustic soda carabao brand to be shipped on March 1916 and shall be paid on its delivery. The contract provided for "c.i.f. Manila, pagadero against delivery of documents. ISSUE: Whether or not the place of delivery is in Manila.

BISLIG BAY LUMBER COMPANY, INC., vs. COLLECTOR OF INTERNAL REVENUE FACTS: Bislig Bay Lumber Co. seeks a review under Sec. 18 of R.A. No. 1125, of that part of a judgment rendered by the Court of Tax appeals on 9 October 1957, ordering it to pay the government the sum of P175,681 as a deficiency sales tax and charges on shipments of logs to buyers in Japan from June 14, 1951 to June 19,1953. ISSUE: WON the ownership of the logs was transferred in the Philippines. HELD: Yes. Ownership of the logs was transferred in the Philippines. As the Court of Tax Appeals correctly held, . . . ownership in the logs passed in the Philippines from the seller to the foreign buyers because the freight charges were paid by the buyers; the shipments were insured by the buyers (and in those cases where insurance was taken by the seller the policies were indorsed in blank and delivered to the agent in Manila of the foreign buyers, which has the same effect as if the insurance was taken by the buyers); and, what is more important, the bills of lading and other shipping documents were indorsed in blank by the seller and presented for collection to a local bank with whom the foreign buyers opened irrevocable

letters of credit. Therefore, neither the fact that the bills of lading in this case provided that the logs were deliverable to the seller or its order, or that a draft was invariably attached to each bill of lading, is of legal consequence.

REPUBLIC OF THE PHILIPPINES, vs.LITTON & CO., ET AL FACTS: Defendants entered into a contract with the plaintiff whereby the former shall supply and deliver to the latter padlocks of P187 each. The defendants delivered on or about 8 April 1946, 34,200 padlocks which is much less than the quantity called for in the contract and failed to deliver the balance of 61,800 padlocks which were to be used during the election of 23 April 1946. As a result, plaintiff was compelled to make open market purchase of 25,613 padlocks, thereby incurring losses and damages. ISSUE: Whether or not there was a delay in the delivery the padlocks. HELD: The defendant entered into a contract with the plaintiff for the delivery of the padlocks within a stated period. It was stipulated in the contract that should there be delay in the delivery due to the act of the government, force majeure, or to a condition clearly beyond the contractors control, a reasonable extension if applied before default might be granted to the contractor. In failure to make delivery within the stipulated period, the defendant cannot invoke force majeure in view of the fact of assumed liability in all eventualities; and this is authorized by Art. 1105 of the old Civil Code. Therefore, the contractor is liable to pay the penalty imposed in the contract. FERNANDO CARRASCOSO, JR., vs. THE HONORABLE COURT OF APPEALS FACTS: SUPRA ISSUE: WON there is a breach of warranty of non-tenancy on the part of El Dorado. HELD: NO. The following requisites must be established in order that there be an express warranty in a contract of sale: (1) the express warranty must be an affirmation of fact or any promise by the seller relating to the subject matter of the sale; (2) the natural tendency of such affirmation or promise is to induce the buyer

to purchase the thing; and (3) the buyer purchases the thing relying on such affirmation or promise thereon. Under the March 23, 1972 Deed of Sale of Real Property, El Dorado warranted that the property was not being cultivated by any tenant and was, and therefore, not covered by the provisions of the Land Reform Code. If Carrascoso would become liable under the said law, he would be reimbursed for all expenses and damages incurred thereon. Carrascoso claims to have incurred expenses in relocating persons found on the property four months after the execution of the Deed of Sale. Apart from such bare claim, the records are bereft of any proof that those persons were indeed tenants. The fact of tenancy not having been priorly established, El Dorado may not be held liable for actual damages.

PHILIPPINE MANUFACTURING CO. vs. GO JOCCO FACTS: The defendant collected the prize of oil for the plaintiff, but was told that it would first be necessary to measure the contents of the banks and to again examine the oil in conformity with the terms of the contract. The defendant then analyzed the samples and it was satisfactory. This resulted in giving to the defendant the check, equivalent to the full amount of the purchase prize. Later, the plaintiff sold the oil by contract in writing Portsmouth Cotton Oil Refining Co. yet the latter refused to accept such on the ground that it was contaminated by an admixture of kapok oil. ISSUE: WON the plaintiff has a cause of action against defendant based on an express warranty. Held: No. The contract of sale between the plaintiff and the defendant contains no express warranty against impurities. This is, therefore, not an action on an express warranty. In the absence of an examination of the oil by the plaintiff, the latter might have had a right of action on an implied warranty under article 336 of the Code of Commerce. As it appears that the plaintiff examined the oil to his satisfaction, it is evident that he cannot now rely on this article for his cause of action. The result will be the same if we regard impurity complained of as a latent defect which could not be discovered by an ordinary examination. The case would then

come under article 342 of the Code of Commerce, but the right of action mentioned in that article was extinguished by the failure of the plaintiff to present his claim within thirty days from the delivery of the merchandise. There being no express warranty and the plaintiff having lost its right of action on the implied warranties as to the quality of the merchandise, it must now necessarily base its cause of action on fraud under article 344 of the Code.

POWER COMMERCIAL AND INDUSTRIAL CORPORATION vs. COURT OF APPEALS FACTS: SUPRA ISSUE: WON petitioner failed to establish any breach of the warranty against eviction. HELD: A breach of this warranty requires the concurrence of the following circumstances:

JAIME GUINHAWA vs. PEOPLE OF THE PHILIPPINES Facts: Jaime Guinhawa was engaged in the business of selling brand new motor vehicles. Guinhawa purchased a brand new Mitsubishi L-300 Versa Van from the Union Motors Corporation. Guinhawas driver, drove the van from Manila to Naga City. However, the driver suffered a heart attack during the trip. As a result, the van was damaged, and the left front tire had to be replaced. The van was repaired and later offered for sale in Guinhawas showroom. Spouses Silo, unaware of what happened, decided to purchase the van without examining the under chassis of the van. Later on, the spouses discovered defects in the van, and asked for its replacement for its persisted defects. Meanwhile, the spouses stopped paying the monthly amortization, pending the replacement. There being no replacement, the spouses filed for the rescission of the sale. ISSUE: WON the vendor is liable for deceit. HELD: Article 1389 of the New Civil Code provides that failure to disclose facts when there is a duty to reveal them constitutes fraud. In a contract of sale, a buyer and seller do not deal from equal bargaining positions when the latter has knowledge, a material fact which, if communicated to the buyer, would render the grounds unacceptable or, at least, substantially less desirable. If, in a contract of sale, the vendor knowingly allowed the vendee to be deceived as to the thing sold in a material matter by failing to disclose an intrinsic circumstance that is vital to the contract, knowing that the vendee is acting upon the presumption that no such fact exists, deceit is accomplished by the suppression of the truth.

(1) The purchaser has been deprived of the whole or part of the thing sold; (2) This eviction is by a final judgment; (3) The basis thereof is by virtue of a right prior to the sale made by the vendor; and (4) The vendor has been summoned and made co-defendant in the suit for eviction at the instance of the vendee. In the absence of these requisites, a breach of the warranty against eviction under Article 1547 cannot be declared. Petitioner argues in its memorandum that it has not yet ejected the occupants of said lot, and not that it has been evicted therefrom. As correctly pointed out by Respondent Court, the presence of lessees does not constitute an encumbrance of the land, nor does it deprive petitioner of its control thereof. We note, however, that petitioners deprivation of ownership and control finally occurred when it failed and/or discontinued paying the amortizations on the mortgage, causing the lot to be foreclosed and sold at public auction. But this deprivation is due to petitioners fault, and not to any act attributable to the vendor-spouses. Because petitioner failed to impugn its integrity, the contract is presumed, under the law, to be valid and subsisting.