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NONILON V.

PRIMERO (2010)
G.R. No. 165168
FACTS

OF

THE

CASE:

Eugenia leased the lot (LOT NO. 263, located in Iligan City, which has an area of 860 sq.m
registered in the name of Eugenia Primero married to Alfredo Primero Sr. )to petitioner
Irene Montecalvo for a monthly rental of P500.00. Eugenia entered into an un-notarized
Agreement with Irene, where the former offered to sell the property to the latter for P1,000.00
per square meter. They agreed that Irene would deposit the amount of P40,000.00 which shall
form part of the down payment equivalent to 50% of the purchase price. They also stipulated
that during the term of negotiation of 30 to 45 days from receipt of said deposit, Irene would pay
the balance of P410,000.00 on the down payment. In case Irene defaulted in the payment of
the down payment, the deposit would be returned within 10 days from the lapse of said
negotiation period and the Agreement deemed terminated. However, if the negotiations pushed
through, the balance of the full value of P860,000.00 or the net amount of P410,000.00 would
be paid in 10 equal monthly installments from receipt of the down payment, with interest at the
prevailing
rate.
Irene failed to pay the full down payment and she continued to stay on the disputed property,
and still made several payments with an aggregate amount of P293,000.00. Eugenia did not
return the P40,000.00 deposit to Irene, and refused to accept further payments.Thereafter, Irene
caused a survey of Lot No. 263 and the segregation of a portion equivalent to 293 square
meters in her favor. However, Eugenia opposed her claim and asked her to vacate the property.
On June 18, 1996, Irene and Nonilon retaliated by instituting CM Case No. 11-3588 with the
RTC of Lanao del Norte for specific performance, to compel Eugenia to convey the 293-square
meter portion of Lot No. 263.

ISSUE:
1.
WHETHER AN ORAL CONTRACT OF SALE OF A PORTION OF [A] LOT IS BINDING
[UPON] THE SELLER.
2.
WHETHER A SELLER IN AN ORAL CONTRACT OF SALE OF A PORTION OF [A] LOT
CAN BE COMPELLED TO EXECUTE THE REQUIRED DEED OF SALE AFTER THE
AGREED CONSIDERATION WAS PAID AND POSSESSION THEREOF DELIVERED TO AND
ENJOYED BY THE BUYER.
HELD:
1. No. It is not binding since the agreement is a contract to sell not a contract of sale. Hence,
with petitioners' non compliance with its terms and conditions, the obligation of the respondents
to deliver and execute the corresponding deed of sale never arose. The efficacy of which is
dependent upon the resolutory condition that Irene pay at least 50% of the purchase price as
down payment within 30-45 days from the day Eugenia received the P40,000.00 deposit. It
was found out that such condition was admittedly not met. It is a fundamental principle that for

contract of sale to be valid, the following elements must be present: (a) consent or meeting of
the minds; (b) determinate subject matter; and (3) price certain in money or its equivalent. Until
the contract of sale is perfected, it cannot, as an independent source of obligation, serve as a
binding
juridical
relation
between
the
parties.
2. The alleged oral contract of sale for the 293-square meter portion of the properly was not
proved by preponderant evidence. Hence, petitioners cannot compel the successors-in-interest
of the deceased Eugenia to execute a deed of absolute sale in their favor.

RUSTAN V. LLUCH (1992)


G.R. No. 70789
FACTS OF THE CASE:
Sometime in 1966, petitioner Rustan established a pulp and paper mill in Baloi, Lanao del
Norte. On March 20, 1967, respondent Lluch, who is a holder of a forest products license,
transmitted a letter to petitioner Rustan for the supply of raw materials by the former to the latter.
In response thereto, petitioner Rustan proposed, among other things, in the letter-reply:
That the contract supply is not exclusive because Rustan shall have the option to buy from
other suppliers who are qualified and holder of appropriate government authority or license to
sell and dispose pulp wood.
That the BUYER shall have the right to stop delivery of the said raw materials by the seller
covered by this contract when supply of the same shall become sufficient until such time when
need for said raw materials shall have become necessary provided, however, that the SELLER
is given sufficient notice.
In the installation of the plant facilities and during the test run of the pulp mill, the machinery line
thereat had major defects while deliveries of the raw materials piled up, which prompted the
Japanese supplier of the machinery to recommend the stoppage of the deliveries. The suppliers
were informed to stop deliveries and the letter of similar advice sent by petitioners to private
respondents informing that the supply of raw materials has become sufficient and petitioners will
not need further delivery from respondents. And the delivery will stop thirty (30) days from
receipt of the letter.
ISSUE:
WHETHER THE SUSPENDED DELIVERY OF PULP WOOD MADE BY THE PETITIONER
WAS LAWFUL.
HELD:
No. Petioners decision to suspend taking delivery of pulp wood from the respondent Lluch,
which was promoted by serious and unforeseen defects in the mill, was not lawful exercise of its
right under the contract of sale. This would make the resumption of the contract purely
dependent on the will of one party --- the petioners, and they could always claim, as they did in

the instant case, that they have more than sufficient supply of pulp wood when in fact they have
been accepting the same from other sources.

ALMIRANEZ V. DEVERA (1965)


G. R. No. L-19496
FACTS OF THE CASE:
Gaspara Devera sold to Julian Villabona, under a contract of sale with right to repurchase, a
parcel of land situated at Barrio Polo, Municipality of Mauban, Quezon, which lot later became
known as lot No. 1563 of the Cadastral Survey of Mauban. The consideration for the sale was
the sum of P800.00, and the period for redemption was to commence at the expiration of two
years from August 10, 1931. Immediately upon the execution of that contract of sale with right of
repurchase, Julian Villabona took possession of property and since then enjoyed the fruits there
from until he died. Julian Villabona died during the Japanese occupation, and the land in
question was inherited by his sonPrimitivo Villabona. Upon the death of Primitivo Villabona, this
land
was
inherited
by
his
daughter Nimfa Villabona.
On
December
10,
1956, Nimfa Villabona sold
the
said
land
to
the appellees,
the
spouses Silverio Almiraez and Isidra Villabona,
for
a
consideration
of
P2,000.00. Silverio Almiranez and his wife took possession of the land upon their purchase
from Nimfa Villabona who was in possession of the same at the time of the sale.
Gaspara Devera had not repurchased the lot in question from Julian Villabona, nor from the
successors in interest of Julian Villabona. The statement in Original Certificate of Title No. O1738 about the lien consisting of the sale with right of repurchase in favor of
JulianVillabona remained uncancelled.
On
June
15,1960, Silverio Almiranez and IsidraVillabona, thru counsel, filed with the Court of First
Instance of Quezon in the cadastral case, a motion praying that the ownership of lot No. 1563
be consolidated in their favor pursuant to the contract of sale with right of repurchase executed
by Gaspara Devera on August 10, 1931, and which was noted in Original Certificate of Title No.
O-1738, saidGaspara Devera not having re Purchased the land. It was further prayed
that GasparaDevera be ordered to deposit with the Clerk of Court t owner's copy of Original
Certificate of Title No. O-1738; that the said original certificate of title in the name
of Gaspara Deverabe ordered cancelled and the Register of Deeds of Quezon be authorized to
issue a transfer certificate of title in the names of Silverio Almiraez and Isidra Villabona.
ISSUE:
WHETHER DEVERA CAN RECOVER HER PROPERTY THROUGH A RIGHT OF
REPURCHASE
HELD:
The contract of sale with right of repurchase was executed on August 10, 1931, so the law that
governs this transaction are the provisions of Article 1507, 1508, 1509 and 1518 of the Old Civil
Code. Under the Old Civil Code, upon the execution of the contract of sale with right of
repurchase the ownership over the property sold is transferred to the vendee subject only to the

condition that the vendor exercises his right of repurchase within the period agreed upon. Under
Article 1509, upon the failure of the vendor to repurchase the vendee irrevocably acquires
ownership of the property sold that is, ownership is consolidated in the vendee by operation of
law. The period for redemption, therefore, had expired on August 10, 1937. By operation of law,
upon failure of Gaspara Devera to re-purchase Lot No. 1563 from Julian Villabona on August
10, 1937, the ownership of the lot became consolidated in favor of Julian Villabona, and the
latter had irrevocably acquired ownership of the property. Even if the period for repurchase is
fixed at ten years from August 10, 1931, the legal situation is not changed
because Gaspara Devera had never repurchased the land in question. The evidence that in
1937 the tax declaration covering the lot in question was transferred to the name of
Julian Villabona.
Hence, Devera cannot recover his property from the contract of sale with a right of repurchase
executed between her and Juliana Villabona . Instead, the transfer of a certificate of title in the
names of Silverio Almiraez and Isidra Villabona will be issued.

FLORO V. RABBIT (1995)


G.R. No. 105649
FACTS OF THE CASE:
On 25 February 1981, Floro, Inc. and Phil. Rabbit entered into an agreement denominated as
"Agreement for Equipment Lease, Service and Maintenance" whereby Floro, Inc. agreed to
furnish Phil. Rabbit with certain computer equipment including four (4) Model 85 Visual Display
Units or monitors. Appearing on the bottom portion of the Agreement was a handwritten
annotation made by Mr. Ernesto P. Lagman, a sales representative of Floro, Inc., which read:
"After
(5)
five
years,
the
computer
becomes
your
property."
The Agreement provided for the payment by Phil. Rabbit to Floro, Inc. of a downpayment upon
signing of the Agreement and certain monthly payments, plus certain other amounts upon
delivery of the computer equipment.The computer equipment specified in the Agreement was
delivered to Phil. Rabbit on September 1981 except for the four (4) Model 85 monitors. In lieu
thereof, Floro, Inc. delivered and installed Model 82 monitors. Phil. Rabbit made several verbal
and written demands on Floro, Inc. to deliver the Model 85 monitors. Upon assurances made
by Floro, Inc. that the Model 85 monitors "will be forthcoming", Phil. Rabbit made several
payments in accordance with the terms of the Agreement. However, despite the assurances
made by Floro, Inc., the Model 85 monitors were never delivered to Phil. Rabbit.
Phil. Rabbit wrote Floro, Inc. asking for the cancellation of the Agreement alleging that the
computers were not placed in full operation due to the nondelivery of the Model 85 monitors. In
a letter dated 4 February 1983, Floro, Inc. expressed its conformity to the "mutual cancellation"
of the Agreement and demanded the return of the computer equipment. Phil. Rabbit informed
Floro, Inc. that the computer equipment would be returned only upon the reimbursement of the

amount

of

P295,169.00,

which

the

former

had

already

paid

the

latter.

On 31 May 1983, Floro, Inc. wrote Phil. Rabbit reiterating its demand for the return of the
equipment and payment of back rentals in the amount of P265,291.50. Phil. Rabbit insisted on
the return of the payments it had previously made.
ISSUE:
1. WHETHER THE CONTRACT BETWEEN THE PARTIES IS A CONTRACT OF LEASE OR A
CONTRACT OF SALE ON INSTALLMENT
2. WHETHER THE PARTIES SHOULD RESTORE TO EACH OTHER WHAT EACH OF THEM
HAVE RECEIVED IN THE CONTRACT

HELD:
1.The agreement between the parties is one of sale on an installment basis and not of lease.
That the intention of Phil. Rabbit and Floro, Inc. was to enter into a contract of sale on
installment has been sufficiently established by the handwritten annotation stating that after five
years, the computer becomes the property of the respondents.
2. The mutual restoration is in consonance with the basic principle that when an obligation has
been extinguished or resolved, it is the duty of the court to require the parties to surrender
whatever they may have received from the other so that they may be restored, as far as
practicable, to their original situation. Since the parties had agreed to a mutual cancellation of
the Agreement, the court ordered each to restore to the other what each had received under the
Agreement in accordance with Article 1385 of the Civil Code. The computer equipment had
been previously returned to Floro, Inc. by virtue of the writ of replevin issued by the trial court.
The CA found that Phil. Rabbit had been able to make use of the computer equipment for a
period of six (6) months; hence, Phil. Rabbit was ordered to pay the sum of P120,564.00 to be
deducted from the sum of P295,169.00 which it had already paid to Floro, Inc. For its part,
Floro, Inc. was ordered to return the balance of P174,605.00.

GOMER V. HERUELA (2005)


G.R. NO. 145330
FACTS OF THE CASE:
The spouses Gomer and Leonor Ramos own a parcel of land, consisting of 1,883 square
meters, of the Register of Deeds of Cagayan de Oro City. On 18 February 1980, the spouses
Ramos made an agreement with the spouses Santiago and Minda Heruela covering 306 square
meters of the land . According to the spouses Ramos, the agreement is a contract of
conditional sale. The spouses Heruela allege that the contract is a sale on installment basis.
On 27 January 1998, the spouses Ramos filed a complaint for Recovery of Ownership with
Damages against the spouses Heruela. The spouses Ramos allege that out of the
P15,300 consideration for the sale of the land, the spouses Heruela paid only P4,000. The

last installment that the spouses Heruela paid was on 18 December 1981. The spouses
Ramos assert that the spouses Heruela's unjust refusal to pay the balance of the purchase
price caused the cancellation of the Deed of Conditional Sale. In June 1982, the spouses
Ramos discovered that the spouses Heruela were already occupying a portion of the land.
Cherry and Raymond Pallori ("spouses Pallori"), daughter and son-in-law, respectively, of the
spouses Heruela, erected another house on the land. The spouses Heruela and the spouses
Pallori refused to vacate the land despite demand by the spouses Ramos.
ISSUE:
1.WHETHER THE OWNER-PETITIONER CAN RECOVER THEIR OWNERSHIP OF THE
PROPERTY FROM BUYER-RESPONDENTS

HELD:
No. The sale is an installment. Applying the Maceda Law or R.A. 6552, which involves sale on
real property, in case where less than two years of installments were paid, the vendorrespondent shall give the buyer a grace period of not less than sixty days from the date
the installment became due. If the buyer fails to pay the installments due at the expiration of the
grace period, the seller may cancel the contract after thirty days from receipt by the buyer of the
notice of cancellation or the demand for rescission of the contract by a notarial act. The spouses
Heruela paid less than two years of installments. However, there was neither a notice of
cancellation nor demand for rescission by notarial act to the spouses Heruela . The spouses
Heruela shall pay the spouses Ramos P11,300 as balance of the purchase price plus interest at
6%. Upon payment, the spouses Ramos shall execute a deed of absolute sale of the land and
deliver the certificate of title in favor of the spouses Heruela. In case of failure to thus pay within
60 days from finality of this Decision, the spouses Heruela and the spouses Pallori shall
immediately vacate the premises without need of further demand, and the down payment and
installment payments of P4,000 paid by the spouses Heruela shall constitute rental for the land;

TUATIS V. ESCOL (2009)


G.R. No. 175399
FACTS OF THE CASE:
Tuatis filed a Complaint for Specific Performance with Damages against herein respondent
Visminda Escol (Visminda). Tuatis alleged in her Complaint that sometime in November 1989,
Visminda, SELLER, and Tuatis, BUYER, entered into a Deed of Sale of a Part of a Registered
Land by Installment (Deed of Sale by Installment) . The subject matter of said Deed was a
piece of real property, A 300 sq. m more or less situated in Poblacion, Sindangan, Zamboanga
del Norte . The significant portions of the Deed of Sale by Installment stated that the BUYER
shall pay the SELLER the amount of P 3,000 as downpayment, P 4,000 on or before December
31, 1989, remaining balance of P 3,000 shall be paid on or before January 31, 1990 and that

the failure of the BUYER to pay the remaining balance within the period stipulated , the BUYER
shall return the subject of the contract to the SELLER and the SELLER shall likewise return all
the amount paid by the BUYER.

Tuatis claimed that of the entire purchase price of P10,000.00, she had paid Visminda
P3,000.00 as downpayment. The exact date of said payment was not, however, specified. In the
meantime, Tuatis already took possession of the subject property and constructed a residential
building
thereon
amounting
to
P502,073.00
Tuatis requested Visminda to sign a prepared absolute deed of sale covering the subject
property, but the latter refused, contending that the purchase price had not yet been fully paid.
Visminda countered that, except for the P3,000.00 downpayment and P1,000.00 installment
paid by Tuatis on 19 December 1989 and 17 February 1990, respectively, Tuatis made no other
payment to Visminda. Despite repeated verbal demands, Tuatis failed to comply with the
conditions that she and Visminda agreed upon in the Deed of Sale by Installment for the
payment of the balance of the purchase price for the subject property. Visminda asked the court
to dismiss Tuatis' Complaint, or in the alternative, order Tuatis to return the subject property to
Visminda after Visminda's reimbursement of the P4,000.00 she had received from Tuatis.
ISSUES:
WHETHER SELLER CAN BE COMPELLED TO EXECUTE A DEED OF CONVEYANCE FOR
THE PORTION OF LAND ENTERED INTO A CONTRACT OF SALE ON INSTALLMENT BY
THE BUYER
WHETHER THE SELLER HAS AN OPTION TO BE APPROPRIATE THE BUILDING THAT
THE BUYER BUILT ON THE LAND OF THE SELLER OR TO BE INDEMNIFIED OF THE
VALUE OF THE LAND WHERE THE BUILDING IS BUILT BY THE SELLER
HELD:
1.No, There is breach of the contract of sale on installment entered between the parties. The
SELLER cannot be compelled to execute the Deed of Conveyance to the BUYER since the
SELLER is still the absolute owner of the property and she is not indemnified of the exact
payment from the BUYER.

2. Yes the SELLER has the option to be appropriate the building or to be indemnified of the
value of the land provided such value is not more than the value of the building. It is the owner
of the land who is authorized to exercise the option, because his right is older, and because, by
the principle of accession, he is entitled to the ownership of the accessory thing . BUYER
constructed the building in bad faith for, she had knowledge of the fact that the SELLER is still
the absolute owner of the subject land. There was bad faith also on the part of SELLER in

accordance with the express provisions of Article 454 since she allowed BUYER to construct
the building without any opposition on her part and so occupy it. The rights of the parties must,
therefore, be determined as if they both had acted in good faith. Article 448 of the Civil Code will
apply. The owner of the land on which anything has been built, sown or planted in good faith,
shall have the right to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built
or planted to pay the price of the land, and the one who sowed, the proper rent. However,
the builder or planter cannot be obliged to buy the land if its value is considerably more
than that of the building or trees.

SANTOS V. FERRERA (1989)


G.R. No. 83664
FACTS OF THE CASE:
Defendant Ferrera and Pedronia executed a deed of sale over their property in favor of
spouses Apolonia and Rufino Santos for the sum of P22,000.00. Upon the issuance of a new
title in the name of vendees , the amount of P16,000.00 was delivered to
defendantFerrera. Simultaneous with the execution of the deed of sale , an instrument entitled
Promise To Sell dated February 1, 1971 was executed by the spouses Santos in favor of
defendants Ferrera, whereby the former promised to sell back the land in question to the latter
for P22,000.00 within a period of six months from February 1, 1971.
Defendants Ferrera failed to exercise the right to repurchase the property. On July 30, 1971
spouses Santos executed a deed of absolute sale covering the property in question in favor of
their daughter Felicitacion for P30,000.00. Felicitacion and Gregorio Santos executed a promise
to sell the property in favor of the Ferreras for P30,000.00 within six months.
Notwithstanding, the sale of the property to the Santoses, spouses Ferrera continued in
possession of the property thru their tenants, the Nazareths. The Santoses informed
theNazareths that they are the new owners of the property in question and required the latter to
pay the rent for the property in question to them but the Nazareths refused to recognize them as
the owner of the property and continued to deliver the harvest shares to theFerreras.
Nearly seven (7) years after, plaintiffs, through their attorney-in-fact, Renato Santos, filed
an breach of warrantyand damages against the defendants based on the alleged Deed of
Absolute Sale. The defendants argue that they never intended to sell their land for such an
inadequate price; that they were in dire need of money so they obtained the loan of P22,000.00;
that to secure payment of the loan, defendants were required to execute a Deed
of Absoute Sale over the property in dispute, with the agreement, that the deed of sale will
merely serve as collateral; that they remain in possession of the land; and that the transfer

certificate of title in favor of Apolonia Santos is null and void, the real contractbetween the
parties being one of equitable mortgage only.
ISSUE:
WHETHER THE OWNERS EXECUTED AN ABSOLUTE SALE OR AN EQUITTABLE
MORTGAGE TO THE BUYER
HELD:
The Owners executed an equitable mortgage to the buyer. Insofar as the price of the property in
the deed of absolute sale is concerned, there is evidence that the same is unusually
inadequate. The original deed of sale provides that the property in question was sold for
P22,000.00, although only P16,000.00 thereof was actually received by OWNERS. On the
other hand, there is evidence that the land in question would command a price from
P100,000.00 to P200,000.00 for the entire parcel at the time of the transaction . The OWNERS
have remained in possession of the property up to the present. This is admitted by BUYERS
who would only want OWNERS to recognize them as the new owner and to pay the accrued
and accruing rentals. OWNERS, however, insist that they are the owner and not mere lessees
of the land in question. There is evidence also that after the expiration of the six-month period
given to OWNERS to repurchase the property a new deed of sale was executed by the
transferee in favor of OWNERS giving the latter another six months to repurchase the land in
question. Except for the execution of the deed of sale in question , it may be clearly inferred
from the circumstances that the intention of the parties is that the transaction in question was to
secure the payment of the amount of P16,000.00 originally extended to and received by the
OWNERS by way of loan. These are clearly indicative of the fact that the transaction in
question was in reality an equitable mortgage."

DBP V.MEDRANO (2011)


G.R. No. 167004
FACTS OF THE CASE:

Respondent Ben Medrano was the President and General Manager of Paragon Paper
Industries, Inc. wherein he owned 37,681 shares. Petitioner DBP sought to consolidate its
ownership in Paragon. In one of the meetings of the Paragon Executive Committee, DBP thru
Jose B. de Ocampo, instructed Medrano, as President and General Manager of Paragon, to
contact the minority stockholders and to convince them to sell their shares to DBP at P65.00 per
share, or 65% of the stock's par value of P100.00. Medrano began to contact each member of
the minority stockholders. He was able to contact all except one who was in Singapore.
Medrano testified that all, including himself, agreed to sell, and all took steps to have their
shares surrendered to DBP for payment. They made proposals to DBP and the Board of
Directors of DBP approved the sale subject to the following terms and conditions: (1) that prior
to the implementation of the approval, 57,596 shares of Paragon's stock issued to the

stockholders concerned shall first be surrendered to the DBP; (2) that all the parties concerned
shall give their written conformity to the arrangement; and (3) that the transaction shall be
implemented within forty-five (45) days from the date of approval ; otherwise, the same shall be
deemed canceled. Medrano then indorsed and delivered to DBP all his 37,681 shares which
had a value of P2,449,265.00. DBP accepted said shares and took over Paragon.
Medrano was offered a commission of P185,010.00 if the latter could persuade all the other
Paragon minority stockholders to sell their shares. Medrano was able to convince only two
stockholders, Alberto Wong and Gerardo Ledonio III, to sell their respective shares. Thus, his
commission
was
reduced
to
P155,455.00.
Thereafter, Medrano demanded that DBP pay the value of his shares, which he had already
turned over, and his P155,455.00 commission. When DBP did not heed his demand, Medrano
filed
a
complaint
for
specific
performance
and
damages
against
DBP.
DBP filed an Answer arguing that there was no perfected contract of sale as the three conditions
in DBP were not fulfilled. Likewise, certain minority stockholders owning 17,635 shares refused
to sell their shares. DBP exercised its right to cancel the sale. And later, during the pendency of
the case, conveyed the shares to the Asset Privatization Trust which took over assets and
assumed
liabilities
of
government-financial
institutions
including
DBP.
ISSUES:
WHETHER THERE WAS NO PERFECTED CONTRACT OF SALE BETWEEN DBP AND
MEDRANO
WHETHER THE SHARES OF MEDRANO BE RETURNED TO HIM BY DBP
HELD:
1. There existed between DBP and Medrano a contract of sale and the conditions imposed by
Resolution No. 4270 were merely conditions imposed on the performance of an obligation.
Hence, while under Article 1545 of the Civil Code, DBP had the right not to proceed with the
agreement upon Medrano's failure to comply with the conditions, DBP was deemed to have
waived the performance of the conditions when it chose to retain Medrano's shares and later
transfer them to the APT. The court noted that the retention of the shares was contrary to DBP's
claim of rescission because if indeed DBP rescinded the sale, then it should have returned to
Medrano his shares together with their fruits and the price with interests, as provided by Article
1385 of the Civil Code. As a rule, a contract is perfected upon the meeting of the minds of the
two parties. Under Article 1475 of the Civil Code, a contract of sale is perfected the moment
there is a meeting of the minds on the thing which is the object of the contract and on the price.

2.DBP's act of keeping the shares delivered by Medrano without paying for them constitutes
unjust enrichment. There is unjust enrichment when a person unjustly retains a benefit to the
loss of another, or when a person retains money or property of another against the fundamental
principles of justice, equity and good conscience." Article 22 of the Civil Code provides that
every person who through an act of performance by another, or any other means, acquires or
comes into possession of something at the expense of the latter without just or legal ground,
shall return the same to him." The principle of unjust enrichment under Article 22 requires two
conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such
benefit is derived at another's expense or damage. It was not proper for DBP to hold on to
Medrano's shares of stock after it became obvious that he will not be able to comply with the
conditions for the contract of sale. From that point onwards, the prudent and fair thing to do for
DBP was to return Medrano's shares because DBP had no just or legal ground to retain them.

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