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SALES

CaseDigest
DEFINITIONOFCONTRACTOFSALE 1.) SPOUSES ONNIE SERRANO AND AMPARO HERRERA vs. GODOFREDO CAGUIAT,G.R.No.139173,February28,2007 Facts: Petitioners are registered owners of a lot located in Las Pias. On March 23, 1900,respondentofferedtobuythelotandpetitionersagreedtosellitat1,500 persquaremeter.Respondentthengave 100,000aspartialpayment.Afew days after, respondent, through his counsel, wrote petitioners informing them ofhisreadinesstopaythebalanceofthecontractpriceandrequestingthemto preparetheDeedofSale. Petitioners, through counsel, informed respondent in a letter that Amparo Herrera would be leaving for abroad on or before April 15, 1990 and they are cancelingthetransactionandthatrespondentmayrecovertheearnestmoney (100,000) anytime. Petitioners also wrote him stating that they already delivered a managers check to his counsel in said amount. Respondent thus filedacomplaintforspecificperformanceanddamageswiththeRTCofMakati. Thetrialcourtruledthattherewasalreadyaperfectedcontractofsalebetween thepartiesandorderedthepetitionerstoexecuteafinaldeedofsaleinfavorof respondent.TheCourtofappealsaffirmedsaiddecision. Issue: Whetherornottherewasacontractofsale. Ruling: Thetransactionwasacontracttosell. WhenpetitionersdeclaredintheReceiptforPartialPaymentthatthey RECEIVEDFROMMR.GODOFREDOCAGUIATTHEAMOUNTOFONEHUNDRED THOUSANDPESOSASPARTIALPAYMENTOFOURLOTSITUATEDINLASPIAS MR.CAGUIATPROMISEDTOPAYTHEBALANCEOFTHEPURCHASEPRICEONOR BEFORE MARCH 23, 1990, AND THAT WE WILL EXECUTE AND SIGN THE FINAL DEED OF SALE ON THIS DATE. there can be no other interpretation than that theyagreedtoaconditionalcontractofsale,consummationofwhichissubject onlytothefullpaymentofthepurchaseprice. Acontracttosellisakintoaconditionalsalewheretheefficacyorobligatory force of the vendors obligation to transfer title is subordinated to the happeningofafutureanduncertainevent,sothatifthesuspensivecondition doesnottakeplace,thepartieswouldstandasiftheconditionalobligationhad never existed. The suspensive condition is commonly full payment of the purchaseprice. Inthiscase,theReceiptforPartialPaymentshowsthatthetrueagreement betweenthepartiesisacontracttosell. First,ownershipoverthepropertywasretainedbypetitionersandwasnotto pass to respondent until full payment of the purchase price. Second, the agreement between the parties was not embodied in a deed of sale. The absence of a formal deed of conveyance isa strong indication thatthe parties did not intend immediate transfer of ownership, but only a transfer after full payment of the purchase price. Third, petitioners retained possession of the certificateoftitleofthelot. ItistruethatArticle1482providesthatwheneverearnestmoneyisgivenina contract of sale, it shall be considered as part of the price and proof of the perfectionofthecontract.However,thisarticlespeaksofearnestmoneygiven inacontractofsale.Inthiscase,theearnestmoneywasgiveninacontractto sell. The earnest money forms part of the consideration only if the sale is consummateduponfullpaymentofthepurchaseprice. Clearly, respondent cannot compel petitioners to transfer ownership of the propertytohim. 2.) JULIE NABUS, MICHELLE NABUS and BETTY TOLERO vs. JOAQUIN PACSON andJULIAPACSON,G.R.No.161318,November25,2009 3.)MILAA.REYESvs.VICTORIAT.TUPARAN,G.R.No.188064,June1,2011 Facts: Petitioner Mila Reyes owns a threestorey commercial building in Valenzuela City.Respondent,VictoriaTuparanleasedaspaceonsaidbuildingforamonthly rental of P4, 000. Aside from being a tenant, respondent also invested in petitioner's financing business. On June 20, 1988, Petitioner borrowed P2 Million from Farmers Savings and Loan Bank (FSL Bank) and mortgaged the buildingandlot(subjectrealproperties).Reyesdecidedtosellthepropertyfor P6.5Milliontoliquidateherloanandfinanceherbusiness.Respondentoffered to conditionally buy the real properties for P4.2 Million on installment basis withoutinterestandtoassumethebankloan.Theconditionsarethefollowing: 1.Salewillbecancelledifthepetitionercanfindabuyerofsaidpropertiesfor theamountofP6.5Millionwithinthenextthreemonths.Allpaymentsmadeby therespondenttothepetitionerandthebankwillberefundedtoTuparanwith anadditional6%monthlyinterest. 2. Petitioner Reyes will continue using the space occupied by her drug store withoutrentalsforthedurationoftheinstallmentpayments. 3.Therewillbealeasefor15yearsinfavorofReyesforamonthlyrentalofP8, 000afterfullpaymenthasbeenmadebythedefendant. 4.Thedefendantwillundertaketherenewalandpaymentofthefireinsurance policiesofthe2buildings,followingtheexpirationofthecurrentpolicies,upto thetimetherespondenthasfullypaidthepurchaseprice TheypresentedtheproposalforTuparantoassumethemortgagetoFSLBank. The bank approved on the condition that the petitioner would remain as co makerofthemortgageobligation. Petitioner'sContention: Under their Deed of Conditional Sale,therespondent isobligedtopayalump sumofP1.2Millioninthreefixedinstallments.Respondent,howeverdefaulted in the payment of the installments. To compensate for her delayed payments, respondent agreed to pay petitioner monthly interest. But again, respondent failed to fulfill this obligation. The petitioner further alleged that despite her successinfindinganotherbuyeraccordingtotheirconditionalsaleagreement, respondent refused to cancel their transaction. The respondent also neglected torenewthefireinsurancepolicyofthebuildings. Respondent'sAnswer: Respondent alleges that the deed of Conditional Sale of Real Property with AssumptionofMortgagewasactuallyapureandabsolutecontractofsalewith a term period. It could not be considered a conditional sale because the performance of the obligation therein did not depend upon a future and uncertain event. She also averred that she was able to fully pay the loan and secure the release of the mortgage. Since she also paid more than the P4.2 Million purchase price, rescission could not be resorted to since the parties couldnolongerberestoredtotheiroriginalpositions.

Issue: Is the conditional sale at bar a contract of sale or a contract to sell? Can the transaction or obligation be rescinded given that the conditions were not satisfied? Ruling: RTC: The deed of conditional sale was a contract to sell. It was of the opinion that althoughthepetitionerwasentitledtoarescissionofthecontract,itcouldnot be permitted because her nonpayment in full of the purchase price may not be considered as substantial and fundamental breach of the contract as to defeattheobjectofthepartiesinenteringintothecontract.TheRTCbelieved that respondent showed her sincerity and willingness to settle her obligation. Hence, it would be more equitable to give respondent a chance to pay the balance plus interest within a given period of time. The court ordered the respondenttopaythepetitionertheunpaidbalanceofthepurchaseprice. CA: The CA agreed with the RTC that the remedy of rescission could not apply because the respondents failure to pay the petitioner the balance of the purchasepriceinthetotalamountof805,000.00wasnotabreachofcontract, butmerelyaneventthatpreventedtheseller(petitioner)fromconveyingtitle tothepurchaser(respondent).Sincerespondenthadalreadypaidasubstantial amountofthepurchaseprice,itwasbutrightandjusttoallowhertopaythe unpaidbalanceofthepurchasepriceplusinterest. SC: The SC agrees that the subject Deed of Conditional Sale with Assumption of Mortgageisacontracttosellandnotacontractofsale.Thesubjectcontract was correctly classified as a contract to sell based on the following pertinent stipulations: 8.Thatthetitleandownershipofthesubjectrealpropertiesshallremainwith theFirstPartyuntilthefullpaymentoftheSecondPartyofthebalanceofthe purchase price and liquidation of the mortgage obligation of 2,000,000.00. Pending payment of the balance of the purchase price and liquidation of the mortgage obligation that was assumed by the Second Party, the Second Party shall not sell, transfer and convey and otherwise encumber the subject real propertieswithoutthewrittenconsentoftheFirstandThirdParty. 9. That upon full payment by the Second Party of the full balance of the purchase price and the assumed mortgage obligation herein mentioned the ThirdPartyshallissuethecorrespondingDeedofCancellationofMortgageand theFirstPartyshallexecutethecorrespondingDeedofAbsoluteSaleinfavorof theSecondParty The title and ownership of the subject properties remains with the petitioner until the respondent fully pays the balance of the purchase price and the assumedmortgageobligation.Withoutrespondentsfullpayment,therecanbe no breach of contract to speak of because petitioner has no obligation yet to turnoverthetitle.Thecourtagreesthatasubstantialamountofthepurchase pricehasalreadybeenpaid.ItisonlyrightandjusttoallowTuparantopaythe said unpaid balance of the purchase price to Reyes. Granting that a rescission can be permitted under Article 1191, the Court still cannot allow it for the reason that, considering the circumstances, there was only a slight or casual breach in the fulfillment of the obligation. The court considered fulfillment of 20% of the purchase price is NOT a substantial breach. Unless the parties stipulated it, rescission is allowed only when the breach of the contract is substantial and fundamental to the fulfillment of the obligation. Whether the breach is slight or substantial is largely determined by the attendant circumstance.Asforthe6%interest,petitionerfailedtosubstantiateherclaim thattherespondentcommittedtopayit.Petitionisdenied. 4.)VILLONCOREALTYCOMPANYandEDITHPEREZDETAGLEvs.BORMAHECO, INC., FRANCISCO N. CERVANTES and ROSARIO N. CERVANTES, 65 SCRA 352, G.R.No.L26872,July25,1975 Facts:

FranciscoCervantesofBormahecoInc.agreestoselltoVilloncoRealtyaparcel oflandanditsimprovementslocatedinBuendia,Makati. BormahecomadethetermsandconditionforthesaleandVilloncoreturnedit withsomemodifications. The sale is for P400 per square meter but it is only to be consummated after respondent shall have also consummated purchase of a property in Sta. Ana, Manila. Bormaheco won the bidding for the Sta.Ana land and subsequently boughttheproperty. VilloncoissuedachecktoBormahecoamountingtoP100,000asearnestmoney. After 26 days from signing the contract of sale, Bormaheco returned the P100,000toVilloncowith10%interestforthereasonthattheyarenotsureyet iftheywillacquiretheSta.Anaproperty. Villonco rejected the return of the check and demanded for specific performance. Issue: WONBormahecoisboundtoperformthecontractwithVillonco. Ruling: The contract is already consummated when Bormaheco accepted the offer by Villonco. The acceptance can be proven when Bormaheco accepted the check fromVilloncoandthenreturneditwith10%interestasstipulatedintheterms madebyVillonco. On the other hand, the fact that Villonco did not object when Bormaheco encashedthecheckisaproofthatitacceptedtheofferofBormaheco. Wheneverearnestmoneyisgiveninacontractofsale,itshallbeconsideredas partofthepriceandasproofoftheperfectionofthecontract"(Art.1482,Civil Code). 5.)ANGYUASUNCION,ARTHURGOANDKEHTIONGvs.THEHON.COURTOF APPEALSandBUENREALTYDEVELOPMENTCORPORATION,238SCRA602,G.R. No.109125,December2,1994 Facts: The plaintiffs were tenants or lessees of residential and commercial spaces ownedbydefendantsinBinondo,Manilasince1935religiouslypayingrent.On several conditions before October 9, 1986, defendants informed the plaintiffs thattheyareofferingtosellthepremisesandaregivingthemprioritytoacquire thesame.Duringnegotiations,BobbyCuUnjiengofferedapriceofP6million whileplaintiffsmadeacounterofofferofP5million.Plaintiffthereafterasked thedefendantstoputtheirofferinwritingtowhichthedefendantsacceded.In reply to defendants letter, plaintiffs wrote, asking that they specify the terms andconditionsoftheoffertosell.Whentheplaintiffsdidnotreceiveanyreply, they sent another letter with the same request. Since defendants failed to specifythetermsandconditionsoftheoffertosellandbecauseofinformation received that the defendants were about to sell the property, plaintiffs were compelled to file the complaint to compel defendants to sell the property to them.Thecourtdismissedthecomplaintonthegroundthatthepartiesdidnot agreeuponthetermsandconditionsoftheproposedsale,hence,therewasno contractofsaleatall. On November 15, 1990, the Cu Unjieng spouses executed a Deed of Sale transferring the property in question to Buen Realty and Development Corporation. Buen Realty, as the new owner of the subject property, wrote to thelesseesdemandingthelattertovacatethepremises.Initsreply,petitioner stated that Buen Realty and Development Corporation brought the property subjecttothenoticeoflispendens. TheRTCorderedtheCUUnjiengstoexecutethenecessaryDeedofSaleofthe property in litigation favor of plaintiffs for the consideration of P15M in

recognition of petitioners right of first refusal and that a new Transfer CertificateofTitlebeissuedinfavorofthebuyer.Thecourtsetasidethetitle issued to Buen Realty Corporation for having been executed in bad faith. The judgeissuedawritofexecution. The appellate court set aside and declared without force and effect the above ordersofthecourtaquo. Issue: WONBuenRealtycanbeboundbythewritofexecutionbythevirtueofnotice oflispendens? Ruling: Inthelawofsales,thesocalledrightoffirstrefusalisaninnovativejuridical relation. Needless to point out, it cannot be deemed a perfected contract of sale.Evenonthepremisethatsuchrightoffirstrefusalhasbeendecreedunder finaljudgment,itsbreachcannotjustifycorrespondinglyanissuanceofwritof executionunderajudgmentthatmerelyrecognizesitsexistence. The final judgment in Civil Case No. 8741058, it must be stressed, has merely accorded a right to first refusal in favor of petitioners. Petitioners are aggrievedbythefailureofprivaterespondentstohonortherightoffirstrefusal, theremedyisnotthewritofexecutiononthejudgment,sincethereisnoneto execute,butanactionfordamagesinaproperforumforthepurpose. Furthermore,BuenRealty,havingnotimpleadedintheabovestatedCivilCase, cannotbeheldsubjecttothewritofexecutionissuedbytherespondentjudge, let alone ousted from the ownership and possession of the property, without firstbeingaffordedadayincourt. NoticeofLisPendensmayinvolveactionsthatdealnotonlywiththetitleor possessionofapropertybutalsowiththeuseoroccupationofproperty. Incaseofsubsequentsalesortransfers,theRegisterofDeedsisdutyboundto carryoverthenoticeoflispendensonalltitlesissued. 6.) PERPETUA VDA. DE APE vs. THE HONORABLE COURT OF APPEALS and GENOROSACAWITVDA.DELUMAYNO,456SCRA193,G.R.No.133638,April 15,2005 Facts: CleopasApewastheregisteredownerofaparcelofland.UponCleopasApe's death, the property passed on to his wife, Maria Ondoy, and their eleven (11) children, namely: Fortunato, Cornelio, Bernalda, Bienvenido, Encarnacion, Loreta,Lourdes,Felicidad,Adela,Dominador,andAngelina,allsurnamedApe. On 15 March 1973, Generosa Cawit de Lumayno (private respondent herein), joinedbyherhusband,Braulio,institutedacasefor"SpecificPerformanceofa DeedofSalewithDamages"againstFortunatoandhiswifePerpetua(petitioner herein) before the then Court of First Instance of Negros Occidental. It was alleged in the complaint that on 11 April 1971, private respondent and Fortunato entered into a contract of sale of land under which for a consideration of P5,000.00, Fortunato agreed to sell his share in the lot to private respondent. The agreement was contained in a receipt prepared by privaterespondent'ssoninlaw,AndresFlores,atherbehest. Fortunato and petitioner denied the material allegations of the complaint and claimed that Fortunato never sold his share in Lot to private respondent and that his signature appearing on the purported receipt was forged. By way of counterclaim,thedefendantsbelowmaintainedhavingenteredintoacontract of lease with respondent involving Fortunato's portion of the lot. Petitioner insisted that the entire lot had not yet been formally subdivided; that on 11 April 1971 she and her husband went to private respondent's house to collect pastrentalsfortheirlandthenleasedbytheformer,however,theymanagedto collect only thirty pesos; that private respondent made her (petitioner's) husbandsignareceiptacknowledgingthereceiptofsaidamountofmoney;and thatthecontentsofsaidreceiptwereneverexplainedtothem.Shealsostated

in her testimony that her husband was an illiterate and only learned how to writehisnameinordertobeemployedinasugarcentral. Issue: Whetherornottherewasavalidcontractofsale? Ruling: No. Court ruled that the records of this case betray the stance of private respondentthatFortunatoApeenteredintosuchanagreementwithher. Acontractofsaleisaconsensualcontract,thus,itisperfectedbymereconsent oftheparties.Itisbornfromthemomentthereisameetingofmindsuponthe thingwhichistheobjectofthesaleandupontheprice.Uponitsperfection,the partiesmayreciprocallydemandperformance,thatis,thevendeemaycompel the transfer of the ownership and to deliver the object of the sale while the vendor may demand the vendee to pay the thing sold. For there to be a perfected contract of sale, however, the following elements must be present: consent,object,andpriceinmoneyoritsequivalent. InthecaseofLeonardov.CourtofAppeals,etal.,weexplainedtheelementof consent,towit: The essence of consent is the agreement of the parties on the terms of the contract, the acceptance by one of the offer made by the other. It is the concurrence of the minds of the parties on the object and the cause which constitutesthecontract.Theareaofagreementmustextendtoallpointsthat thepartiesdeemmaterialorthereisnoconsentatall. For consent to be valid, it must meet the following requisites: (a) it should be intelligent,orwithanexactnotionofthemattertowhichitrefers;(b)itshould befreeand(c)itshouldbespontaneous.Intelligenceinconsentisvitiatedby error; freedom by violence, intimidation or undue influence; spontaneity by fraud. As can be gleaned from Flores's testimony, while he was very much aware of Fortunato'sinabilitytoreadandwriteintheEnglishlanguage,hedidnotbother tofullyexplaintothelatterthesubstanceofthereceipt.Heevendismissedthe ideaofaskingsomebodyelsetoassistFortunatoconsideringthatameaslysum of thirty pesos was involved. This Court annuls the contract of sale between Fortunatoandprivaterespondentonthegroundofvitiatedconsent. 7.)SPOUSESMARIOANDELIZABETHTORCUATORvs.SPOUSESREMEGIOAND GLORIA BERNABE and SPOUSES DIOSDADO and LOURDES SALVADOR, 459 SCRA439,G.R.No.134219,June8,2005 CHARACTERISTICS 1.) FERNANDO A. GAITE vs. ISABELO FONACIER, GEORGE KRAKOWER, LARAP MINES & SMELTING CO., INC., SEGUNDINA VIVAS, FRNACISCO DANTE, PACIFICO ESCANDOR and FERNANDO TY, 2 SCRA 830, G.R. No. L11827, July 31,1961 Facts: Defendantappellant Fonacier was the owner/holder of 11 iron lode mineral claims,knownastheDawahanGroup,situatedinCamrinesNorte. By Deed of Assignment, Respondent constituted and appointed plaintiff appelleeGaiteasattorneyinfacttoenterintocontractfortheexplorationand developmentofthesaidminingclaimson.OnMarch1954,petitionerexecuted a general assignment conveying the claims into the Larap Iron Mines, which ownedsolelyandbelongingtohim.Thereafter,heunderwentdevelopmentand theexploitationfortheminingclaimswhichheestimatestobeapproximately 24metrictonsofironore. However, Fonacier decide to revoke the authority given to Gaite, whereas respondentassentedsubjecttocertainconditions.Consequentlyarevocationof

Power of Attorney and Contract was executed transferring P20k plus royalties from the mining claims, all rights and interest on the road and other developmentsdone,aswellas,therighttouseofthebusinessname,goodwill, records,documentsrelatedtothemines.Furthermore,includedinthetransfer was the rights and interest over the 24K+ tons of iron ore that had been extracted. Lastly the balance of P65K was to be paid for covering the first shipmentofironores. To secure the payment of P65k, respondent executed a surety bond with himself as principal, the Larap Mines and Smelting Co. and its stockholder as sureties. Yet, this was refused by petitioner. Appelle further required another bond underwritten by a bonding company to secure the payment of the balance. Hence a second bond was produced with Far Eastern Surety as an additionalsurety,providedtheliabilityofFarEasternwouldonlyprosperwhen there had been an actual sale of the iron ores of not less than the agreed amountofP65k,moreover,itsliabilitywastoautomaticallyexpireonDecember 1955. OnDecember1955,thesecondbondhadexpiredandnosaleamountingtothe stipulation as prior agreed nor had the balance been paid to petitioner by respondent.Thussuchfailure,promptedpetitionertofileacomplaintintheCFI ofManilaforthepaymentofthebalanceandotherdamages. TheTrialCourtruledinfavorofplaintifforderingdefendanttopaythebalance of P65k with interest. Afterwards an appeal was affected by the respondent where several motions were presented for resolution: a motion for contempt; twomotionstodismisstheappealforbecomingmootandacademic;motionfor a new trial, filed by appellee Gaite. The motion for contempt was held unmeritorious,whiletherestofthemotionswereheldunnecessarytoresolve Issue: Whether or not the Lower Court erred in holding the obligation of appellant FonaciertopayappelleGaitethebalanceofP65k,asonewithaperiodorterm and not one with a suspensive condition; and that the term expired on December1955 Ruling: Noerrorwasfound,affirmingthedecisionofthelowercourt.Gaiteactedwithin his rights in demanding payment and instituting this action one year from and after the contract was executed, either because the appellant debtors had impaired the securities originally given and thereby forfeited any further time withinwhichtopay;orbecausethetermofpaymentwasoriginallyofnomore thanoneyear,andthebalanceofP65k,becamedueandpayablethereafter. TheLowerCourtwaslegallycorrectinholdingtheshipmentorsaleoftheiron oreisnotaconditionorsuspensivetothepaymentofthebalanceofP65k,but was only a suspensive period or term. What characterizes a conditional obligationisthefactthatitsefficacyorobligatoryforceasdistinguishedfromits demandability, is subordinated to the happening of a future and uncertain event;sothatifthesuspensiveconditiondoesnottakeplace,thepartieswould standasiftheconditionalobligationhadneverexisted. ThesaleoftheoretoFonacierwasasaleoncredit,andnotanaleatorycontract wherethetransferor,Gaite,wouldassumetheriskofnotbeingpaidatall;and thattheprevioussaleorshipmentoftheorewasnotasuspensiveconditionfor thepaymentofthebalanceoftheagreedprice,butwasintendedmerelytofix thefuturedateofthepayment. WhileastotherightofFonaciertoinsistthatGaiteshouldwaitforthesaleor shipment of the ore before receiving payment; or, in other words, whether or not they are entitled to take full advantage of the period granted them for making the payment. The appellant had indeed have forfeited the right to compel Gaite to wait for the sale of the ore before receiving payment of the balance of P65,000.00, because of their failure to renew the bond of the Far Eastern Surety Company or else replace it with an equivalent guarantee. The expiration of the bonding company's undertaking on December 8, 1955 substantially reduced the security of the vendor's rights as creditor for the unpaidP65,000.00,asecuritythatGaiteconsideredessentialanduponwhichhe

had insisted when he executed the deed of sale of the ore to Fonacier (first bond). Under paragraphs 2 and 3 of Article 1198 of the Civil Code of the Philippines: ART. 1198. The debtor shall lose every right to make use of the period: (2) Whenhedoesnotfurnishtothecreditortheguarantiesorsecuritieswhichhe has promised. (3) When by his own acts he has impaired said guaranties or securities after their establishment, and when through fortuitous event they disappear,unlessheimmediatelygivesnewonesequallysatisfactory. Appellants' failure to renew or extend the surety company's bond upon its expirationplainlyimpairedthesecuritiesgiventothecreditor(appelleeGaite), unlessimmediatelyrenewedorreplaced. Nevertheless,thereisnomeritinappellants'argumentthatGaite'sacceptance of the surety company's bond with full knowledge that on its face it would automatically expire within one year was a waiver of its renewal after the expiration date. No such waiver could have been intended, for Gaite stood to loseandhadnothingtogainbarely;andiftherewasany,itcouldberationally explainedonlyiftheappellantshadagreedtoselltheoreandpayGaitebefore thesuretycompany'sbondexpiredonDecember8,1955.Butinthelattercase the defendantsappellants' obligation to pay became absolute after one year fromthetransferoftheoretoFonacierbyvirtueofthedeed,firstbond. STAGES 1.) CONCEPCION R. AINZA, substituted by her legal heirs, DR. NATIVIDAD A. TULIAO, CORAZON A. JALECO and LILIA A. OLAYON vs. SPOUSES ANTONIO PADUAandEUGENIAPADUA,462SCRA614,G.R.No.165420,June30,2005 Facts: Petitioner Concepcion Ainza bought onehalf of an undivided portion of the propertyfromherdaughter,Eugeniaandthelattershusband,Antonio,forOne Hundred Thousand Pesos (P100, 000.00). No Deed of Absolute Sale was executed to evidence the transaction, but cash payment was received by the respondents. There was physical delivery of the land through Concepcions otherdaughter(Natividad)actingasattyinfact.Concepcionthereafterallowed Natividadandherhusbandoccupythepurchasedportionoftheland. Antonio caused the division of the lot into three, necessarily displacing Natividad. He also had each subdivision titled. Antonio requested Natividad to vacatethepremises.Antonioaverredthathiswifeonlyadmittedofselling1/3 of the property to Concepcion for which a receipt was issued signed by Concepcion. The RTC ruled in favor of Concepcion that the sale was consummated when both contracting parties complied with their respective obligations. Eugenia transferred possession by delivering the property to Concepcion who in turn paid the purchase price. It also declared that the transfer of the property did not violate the Statute of Frauds because a fully executed contract does not fall within its coverage. The CA reversed the RTC ruling. Issue: WhetherornotthecontractofsalebetweenAinzaandEugeniaisvalid. Ruling: Yes. A contract of sale is perfected by mere consent, upon a meeting of the minds on the offer and the acceptance thereof based on subject matter, price and terms of payment. In this case, there was a perfected contract of sale between Eugenia and Concepcion. The records show that Eugenia offered to sellaportionofthepropertytoConcepcion,whoacceptedtheofferandagreed to pay P100, 000.00 as consideration. The contract of sale was consummated when both parties fully complied with their respective obligations. Eugenia delivered the property to Concepcion, who in turn, paid Eugenia the price of OneHundredThousandPesos(P100,000.00)

Since the land was undivided when it was sold, Concepcion is entitled to have halfofit. CONDITIONALCONTRACTOFSALE 1.) PEOPLE'S HOMESITE & HOUSING CORPORATION vs. COURT OF APPEALS, RIZALINOL.MENDOZAandADELAIDAR.MENDOZA,133SCRA777,G.R.No.L 61623,December26,1984 Facts: On Feb. 18, 1960, the PHHC board of directors passed Resolution No. 513 whereinitstatedthatsubjecttotheapprovaloftheQuezonCityCouncilofthe Consolidation Subdivision Plan, Lot 4 containing 4,182.2 square meters be awarded to Spouses Rizalino and Adelaida Mendoza, at a price of twentyone pesos (P21.00) per square meter and that this award shall be subject to the approval of the OEC (PHHC) Valuation Committee and higher authorities. However, the city council disapproved the proposed consolidation subdivision plan of which the spouses were advised through registered mail. Another subdivision plan was prepared which included Lot 4, with a reduced area of 2,608.7, and was approved by the city council on Feb. 25, 1964. On April 26, 1965, the PHHC board of directors, however, passed a resolution recalling all awardsoflotstopersonswhofailedtopaythedepositordownpaymentforthe lotsawardedtothem.TheMendozasneverpaidthepriceofthelotnormade the20%initialdeposit.OnOctober18,1955,thePHHCboardofdirectorspassed Resolution No. 218, withdrawing the tentative award of Lot 4 to the Mendoza spouses and reawarding said lot jointly and in equal shares to Miguela Sto. Domingo, Enrique Esteban, Virgilio Pinzon, Leonardo Redubloand Jose Fernandezwhowereabletomaketherequired20%ofthenetsellingpriceas depositandthereafter,thecorrespondingdeedsofsalewereexecutedintheir favor.ThesubdivisionofLot4intofivelotswasapprovedbythecitycounciland the Bureau of Lands. The Mendoza spouses asked for reconsideration of the withdrawal of the previous award to them of Lot4andforthecancellationof the reaward of said lot to Sto. Domingo and four others. Before the request could be acted upon, the spouses filed the instant action for specific performance and damages. The trial court sustained the withdrawal of the awardwhichwasappealedbytheMendozas.TheAppellateCourtreversedthat decision and declared void the reaward of Lot 4 and the deeds of sale and directedthePHHCtoselltotheMendozasLot4withanareaof2,603.7square meters at P21 a square meter and pay to them P4,000 as attorney's fees and litigationexpenses.ThePHHCappealedtothisCourt. Issue: WhetherornottherewasaperfectedsaleoftheLot4,withthereducedarea, to the Mendozas which they can enforce against the PHHC by an action for specificperformance. Ruling: The SC hold that there was no pertected sale of Lot 4. It was conditionally or contingently awarded to the Mendozas subject to the approval by the city counciloftheproposedconsolidationsubdivisionplanandtheapprovalofthe awardbythevaluationcommitteeandhigherauthorities.Whenthecitycouncil disapproved the subdivision plan, the Mendozas were advised through registered mail. In 1964, when the revised plan was approved, the Mendozas should have manifested in writing their acceptance of the award for the purchase of Lot 4 just to show that they were still interested in its purchase although the area was reduced and to obviate ally doubt on the matter. They didnotdoso.ThePHHCboardofdirectorsactedwithinitsrightsinwithdrawing the tentative award. The contract of sale is perfect at the moment there is meeting of the minds upon the thing which is the object of the contract, and upon the price. From that moment, the parties may reciprocally demand performance, subject to the law governing the form of contracts (Art. 1475, Civil).Underthefactsofthiscase,wecannotsaytherewasameetingofminds onthepurchaseofLot4withanareaof2,608.7squaremetersatP21asquare meter.

2.)Sps.ENRIQUEandCONSUELOLIMvs.THEHONORABLECOURTOFAPPEALS, Sps.TERESITAandOSCARGUEVARRA,Sps.MARCOSandANITAORLINO,Sps. ROMULO and CONSUELO ORLINO and Sps. FELIX and DOLORES ORLINO, 182 SCRA564,G.R.No.85733,February23,1990 Facts: The subject of this controversy is a parcel of land originally owned by Felix, Manuel and Maria Concepcion Orlino, who mortgaged it to the Progressive CommercialBankassecurityforaP100,000.00loanonJuly1,1965consistingof 1,101 square meters and located in Diliman, Quezon City. The loan not having beenpaid,themortgagewasforeclosedandthebankacquiredthepropertyas the highest bidder at the auction sale on March 28, 1969. The mortgagee thereafter transferred all its assets, including the said land, to the Pacific BankingCorporation(PBC). OnMay22,1975,theOrlinos,andtheirrespectivespouses,whohadremained in possession of the land, made a written offer to PBC to repurchase the property.Inresponse,thebank,confirmstheagreementthroughaletterdated November9,1977underthefollowingconditions: a) The cash consideration shall be P160,000.00 payable in full upon signing of theDeedofAbsoluteSale; b)Theadditionalconsiderationshallconsistofyourclient'sconveyancetousof their share of 2,901.15 square meters on the property situated at Camarin, CaloocanCity. Oneyearlater,onNovember2,1978,PBCadvisedtheprivaterespondentsthat ifthetransactionwasnotfinalizedwithin30days,itwouldconsidertheofferof otherbuyers.2TherecorddoesnotshowanyfurtherdevelopmentuntilJune8, 1979, when the private respondents requested PBC to allow them to secure a certified true copy of its Torrens certificate over the land for purposes of its survey and partition among them preparatory to the actual transfer of title to them. 3 PBC granted the request subject to the condition that title would remainwithituntiltheexecutionofthenecessarydeedofconveyance. OnApril8,1980,ortwoyearslater,PBCremindedtheprivaterespondentsofits letter of November 2, 1978, but again no action was taken to deliver to it the stipulatedconsiderationforthesale.Finally,onMay14,1980,PBCexecuteda deedofsaleoverthelandinfavorofthehereinpetitioners,thespousesEnrique andConsueloLim,forthesumofP300,000.00. On September 30, 1980, the private respondents filed a complaint in the Regional Trial Court of Quezon City against the petitioners and PBC for the annulment of the deed of sale on the ground that the subject land had been earliersoldtothem.Initsjudgmentfortheplaintiffs,thecourtheldthatboth PBCandthespousesLimhadactedinbadfaithwhentheyconcludedthesale knowingthat"therewasacloudinthestatusofthepropertyinquestion."6The decisionwasaffirmedintotobytherespondentcourt,7andthepetitionersare nowbeforeus,urgingreversal. Issue: Whetherornottheexecutionofthedeedofsaleinfavorofthepetitionersare valid. Ruling: In the case at bar, the private respondents obligated themselves to deliver to thebankthesumofP160,000.00andtheirshareof2,901.15squaremetersona propertysituatedinCaloocanCity.IntheletterofPBCdatedNovember9,1977, they were requested to "expedite the loan (they were negotiating for this purpose)sowecanconsummatethetransactionassoonaspossible".Thatwas in 1977. In 1978, they were reminded of their obligation and asked to comply within thirty days. They did not. On April 8, 1980, they were reminded of that letterofNovember2,1978,andagainaskedtocomply;butagaintheydidnot. Surely, the bank could not be required to wait for them forever, especially so since they remained in possession of the property and there is no record that they were paying rentals. Under the circumstances, PBC had the right to

considerthecontracttosellbetweenthemterminatedfornonpaymentofthe stipulatedconsideration.Weherebyconfirmthatrescission. Having arrived at these conclusions, the Court no longer finds it necessary to determineifthepetitionersactedinbadfaithwhentheypurchasedthesubject property. The private respondents lost all legal interest in the land when their contract to sell was rescinded by PBC for their noncompliance with its provisions.Asthatcontractwasnolongereffectivewhenthelandwassoldby PBC to the petitioners, the private respondents had no legal standing to assail thatsubsequenttransaction.ThedeedofsalebetweenPBCandthepetitioners mustthereforebesustained. 3.)SPOUSESVICENTEandLOURDESPINGOLvs.HON.COURTOFAPPEALSand HEIRS OF FRANCISCO N. DONASCO, namely: MELINDA D. PELAYO, MARIETTA D. SINGSON, MYRNA D. CUEVAS, NATIVIDAD D. PELAYO, YOLANDA D. CACERESandMARYDONASCO,226SCRA118,G.R.No.102909,September6, 1993 A vendee in an oral contract to convey land who had made part payment thereof,entereduponthelandandhadmadevaluableimprovementsthereon isentitledtobringsuittoclearhistitleagainstthevendorwhohadrefusedto transfer the title to him. It is not necessary that the vendee should have an absolutetitle,anequitabletitlebeingsufficienttoclothehimwithpersonalityto bringanactiontoquiettitle. Facts: In1969,Pingol,theownerofalot(LotNo.3223)inCaloocanCity,executeda DEED OF ABSOLUTE SALE OF ONEHALF OF AN UNDIVIDED PORTION OF [his] PARCELOFLANDinfavorofDonasco(privaterespondent),payablein6years. In 1984, Donasco died and was only able to pay P8,369 plus P2,000 downpayment,leavingabalanceofP10,161.TheheirsofDonascoremainedin possession of such lot and offered to settle the balance with Pingol. However, Pingol refused to accept the offer and demanded a larger amount. Thus, the heirsofDonascofiledanactionforspecificperformance(withPrayerforWritof Preliminary Injunction, because Pingol were encroaching upon Donascos lot). Pingol averred that the sale and transfer of title was conditional upon the full payment of Donasco (contract to sell, not contract of sale). With Donascos breach of the contract in 1976 and death in 1984, the sale was deemed cancelled, and the heirs continuous occupancy was only being tolerated by Pingol. Issues: (1)WhetherornotPingolcanrefusetotransfertitletoDonasco. (2)WhetherornotDonascohastherighttoquiettitle. Ruling: (1)No.ThecontractbetweenPingolandDonascoisacontractofsaleandnota contract to sell. The acts of the parties, contemporaneous and subsequent to the contract, clearly show that the parties intended an absolute deed of sale; theownershipofthelotwastransferredtotheDonascouponitsactual(upon Donascospossessionandconstructionofthehouse)andconstructivedelivery (upon execution of the contract). The delivery of the lot divested Pingol of his ownership and he cannot recover the title unless the contract is resolved or rescindedunderArt.1592ofNCC.Itstatesthatthevendeemaypayevenafter theexpirationoftheperiodstipulatedaslongasnodemandforrescissionhas been made upon him either judicially or by notarial act. Pingol neither did so. Hence,Donascohasequitabletitleovertheproperty. (2) Although the complaint filed by the Donascos was an action for specific performance, it was actually an action to quiet title. A cloud has been cast on the title, since despite the fact that the title had been transferred to them by theexecutionofthedeedofsaleandthedeliveryoftheobjectofthecontract, PingoladamantlyrefusedtoacceptthepaymentbyDonascosandinsistedthat theynolongerhadtheobligationtotransferthetitle.

Donasco, who had made partial payments and improvements upon the property,isentitledtobringsuittoclearhistitleagainstPingolwhorefusedto transfer title to him. It is not necessary that Donasco should have an absolute title,anequitabletitlebeingsufficienttoclothehimwithpersonalitytobringan actiontoquiettitle. PrescriptioncannotalsobeinvokedagainsttheDonascosbecauseanactionto quiettitletopropertyinONEsPOSSESSIONisimprescriptible. CONTRACTTOSELL 1.) EMILIO A. SALAZAR and TERESITA DIZON vs. COURT OF APPEALS and JONETTEBORRES,G.R.No.118203,July5,1996 Facts: That defendant Dr. Salazar is the owner of the two (2) parcels of land with improvementsthereonlocatedat2914FinlandiaStreet,Makati,MetroManila and covered by Transfer Certificate of Title Nos. 31038 and 31039 of the Registry of Deeds of Makati; that Dr. Salazar offered to sell his properties to JonetteBorresforOneMillionpesos(P1,000,000.00).Theinitialproposaltook place at the Dimsum Restaurant, Makati, whereby it was proposed that the payment of the consideration was to be made within six (6) months but was objectedtobyDr.Salazarandhereducedittoathree(3)monthsperiodthat sometime on [May] 28, 1989, Jonette Borres together with a certain Emilio T. SalazarwenttoseeDr.Salazaratthelatter'sresidenceinBataanbearingacopy ofaDeedofAbsoluteSaleandDeedofWarrantybutDr.Salazarrefusedtosign becauseJonetteBorresdidnothavethemoneyreadythen.InsaidoccasionDr. Salazarfurtherreducedtheperiodwithinwhichplaintiffmaypurchasethelots, toone(1)monthoruptoJune30,1989. Jonette Borres then met again Dr. Salazar on June 2, 1989 at the Ninoy InternationalAirportwhowasabouttoleavefortheUnitedStatesofAmerica whereheisaresident.JonetteBorreshadwithhertheDeedofAbsoluteSale and asked Dr. Salazar to sign said document. Dr. Salazar reluctantly agreed to sign the document provided that Jonette Borres pays one half (1/2) of the consideration or P500,000.00 in "cash" by June 15, 1989 and the balance was payable on June 30, 1989. It was during this occasion that Dr. Salazar again emphasizedtoJonetteBorresthatheneededthemoneybecausehewasthen buyingapropertyintheUnitedStates. Plaintiff agreed to the above conditions and Dr. Salazar constituted co defendantTeresaDizonascustodianattheDeedofAbsoluteSaletogetherwith the Titles of the Land in question with the instruction to Teresa Dizon not to surrendersaiddocumentstoJonetteBorresuntiluponpaymentofthefullprice in"cash". OnJune14,1989JonetteBorresinformeddefendantDizonthatshewillbeable topaythefullamountofP1,000,000.00onJune15,1989andonthenextday, she then went to the house of Teresa Dizon to see and get the documents entrustedtoherbyDr.Salazar.ThedocumentsnotbeinginDizon'spossession, theyagreedtomeetatMetroBankWestAvenueBranchtogetthedocuments andthentoproceedtoMakatitomeettheplaintiff'sbusinesspartneracertain BalaowhoallegedlygaveplaintiffaFarEastBankandTrustCompanycheckfor theamountofP1,500,000.00withwhichtobuytheproperty.Forsomereason oranotherJonetteBorresanddefendantDizonfailedtoproceedtoMakati. InthemeantimeoronJune16,1992,Dr.Salazarmadeanoverseascalltoco defendantDizontoinquireifJonetteBorreshadalreadypaidthedownpayment ofP500,000.00andTeresaDizonrepliedtoDr.SalazarthatJonetteBorreshad notpaidthedownpayment.Dr.SalazarthenorderedDizontostopthesale. Issue: Whether or not the socalled Deed of Absolute Sale executed by petitioner Emilio A. Salazar in favor of private respondent Jonette Borres is a perfected contractofsaleoramerecontracttosell.

Ruling: It is a contract to sell not contract of sale. The withholding by Salazar through Dizon of the Deed of Absolute Sale, the certificates of title, and all other documentsrelativetothelotsisanadditionalindubitableproofthatSalazardid nottransfertoBorreseitherbyactualorconstructivedeliverytheownershipof the two lots. While generally the execution of a deed of absolute sale constitutesconstructivedeliveryofownership,thewithholdingbythevendorof that deed under explicit agreement that it be delivered together with the certificates of titles to the vendee only upon the latter's full payment of the considerationamountstoasuspensionoftheeffectivityofthedeedofsaleasa bindingcontract. Undoubtedly, Salazar and Borres mutually agreed that despite the Deed of AbsoluteSaletitletothetwolotsinquestionwasnottopasstothelatteruntil full payment of the consideration of P1 million. The form of the instrument cannotprevailoverthetrueintentofthepartiesasestablishedbytheevidence. Accordingly, since Borres was unable to pay the consideration, which was a suspensivecondition,Salazarcannotbecompelledtodelivertoherthedeedof sale,certificatesoftitle,andotherdocumentsconcerningthetwolots.Inother words, no right in her favor and no corresponding obligation on the part of Salazarwerecreated. 2.)SPOUSESNESTORCASTILLOandROSIEREYESCASTILLOvs.SPOUSESRUDY REYES and CONSOLACION REYES, 539 SCRA 193, G.R. No. 170917, November 28,2007 Facts: OnNovember7,1997,EmmalizaBohlerandrespondentsnegotiatedforthesale oftheformershouseandlotlocatedatPoblacion,NewWashington,Aklan,to thelatterfortheconsiderationofP165,000.00.Onthefollowingday,November 8,theysignedanAgreementwhichpertinentlyreadsasfollows: We,theundersigned,agreetothefollowingtermsandconditionsregardingthe saleofthehouseandlotlocatedatPoblacion,NewWashington,Aklan: 1.ThatthetotalamounttobepaidshallbeOneHundredSixtyFiveThousand Pesos(P165,000.00)tobepaidinfullonorbeforethe15thofDecember1997; 2.Thatapartialpayment(sic)atotalamountofOneHundredThirtyThousand Pesos(P130,000.00)shallbemadetoday,the8thofNovember1997; 3.Thattheremainingbalanceintheamount(sic)ofThirtyFiveThousandPesos (P35,000.00)shallbemadeasper#1above; 4. That the buyers, represented by the Spouses Rudy and Consolacion Reyes (sic) shall be responsible for all the legal and other related documents and proceduresregardingthissale; 5.Thattheseller,representedbyMs.EmmalizaM.Bohler,shallvacatethesaid houseandlotonor(sic)the31stofJanuary,1998; 6. That the tenants, represented by the Spouses Romeo and Epifania Vicente, shallvacatethesameonorbeforethe30thofApril,1998;and 7. That all parties concerned shall agree to all the terms and conditions stipulatedherein.3 Uponthesigningofthesaidcontract,respondentshandedtoBohlerP20,000.00 cash and allegedly a P110,000.00check. Bohler nonetheless insisted that the entirepartialpaymentshouldbeincashassheneededittoredeemthesubject propertyfromthebankonthefollowingMonday.Shehencedemandedforits payment up to midnight on that day otherwise she would cancel the sale. Because the respondents failed to make good the P110,000.00. Bohler subsequentlysoldthepropertytothepetitioners. Havinglearnedofthesubsequentsale,therespondentsimmediatelytendered the check, asked the bank for a certification that it was funded and consulted theirlawyerwhosentanoticeoflispendens(ornoticeofpendingaction)tothe Register of Deeds and the Provincial Assessor. Civil Case No. 6070 for annulmentofsale,specificperformanceanddamageswassubsequentlyfiledby

the respondents with the Regional Trial Court (RTC) of Kalibo, Aklan against Bohlerandthepetitioners. OnFebruary21,2003,theRTCrendereditsDecisiondeclaringtheNovember8, 1997 Agreement a contract to sell. Considering that no actual sale happened betweenBohlerandtherespondents,theformercouldvalidlyselltheproperty tothepetitioners.Thus,thetrialcourtdismissedthecomplaint. Aggrieved, respondents appealed the case to the CA. In the challenged December6,2005Decision,theappellatecourtreversedthetrialcourtsruling, declaredtheNovember8,1997Agreementacontractofsale,andannulledthe subsequent sale to the petitioners. The CA ruled, among others, that the wordings of the agreement and the conduct of the parties suggest that they intendedtoenterintoacontractofsale. Ownership was not reserved by the vendor and nonpayment of the purchase pricewasnotmadeaconditionforthecontractseffectivity. Petitioners,thus,filedtheinstantpetitionforreviewoncertiorariimputingthe followingerrorstotheCA: 1.TheappellatecourterredindeclaringthecontractstyledAGREEMENTdated 08November1997asa"contractofsale"andnotacontracttosell. 2.Theappellatecourterredindeclaringthepetitionersinbadfaithwhenthey bought the subject matter house and lot on 02 March 1998 from Emmaliza H. Bohler. Issue: Whether the transaction between Bohler and the respondents is a perfected contractofsaleoramerecontracttosell. Ruling: Sale is a consensual contract and is perfected by mere consent, which is manifestedbyameetingofthemindsastotheofferandacceptancethereofon thesubjectmatter,priceandtermsofpaymentoftheprice. In the instant case, the November 8, 1997 Agreement clearly indicates that BohlerandtheSpousesReyeshadameetingofthemindsonthesubjectmatter ofthecontract,thehouseandlot;ontheprice,P165,000.00;andontheterms ofpayment,aninitialpaymentofP130,000.00onthedateofexecutionofthe agreementandtheremainingbalanceonorbeforeDecember15,1997.Atthat precise moment when the consent of both parties was given, the contract of salewasperfected. Thesaidagreementcannotbeconsideredacontracttosell.Inacontractofsale, the title to the property passes to the vendee upon the delivery of the thing sold. Inacontracttosell,ownershipis,byagreement,reservedinthevendorandis not to pass to the vendee until full payment of the purchase price. Otherwise stated,inacontractofsale,thevendorlosesownershipoverthepropertyand cannotrecoverituntilandunlessthecontractisresolvedorrescinded;whereas, in a contract to sell, title is retained by the vendor until full payment of the price. In the latter contract, payment of the price is a positive suspensive condition, failureofwhichisnotabreachbutaneventthatpreventstheobligationofthe vendortoconveytitlefrombecomingeffective. TheNovember8,1997Agreementhereincannotbecharacterizedasacontract tosellbecausethesellermadenoexpressreservationofownershiportitleto thesubjecthouseandlot.Instead,theAgreementcontainsalltherequisitesofa contractofsale. WHEREFORE, premises considered, the petition for review on certiorari is DENIEDDUECOURSE. 3.) UNITED MUSLIM AND CHRISTIAN URBAN POOR ASSOCIATION, INC. represented by its President, MANUEL V. BUEN vs. BRYCV DEVELOPMENT

CORPORATION represented by its President, BENJAMIN QUIDILLA; and SEA FOODSCORPORATION,representedbyitsExecutiveVicePresident,VICENTET. HERNANDEZ,G.R.No.179653,July31,2009 Facts: This petition for review on certiorari seeks to set aside the Decision1 of the Court of Appeals (CA) in CA G.R. CV No. 62557 which affirmed in toto the Decision2oftheRegionalTrialCourt(RTC),Branch16,ZamboangaCityinCivil CaseNo.467(4544). Respondent Sea Foods Corporation (SFC) is the registered owner of LotNo.300locatedinLowerCalainan,ZamboangaCityandcovered byTransferCertificateofTitle(TCT)No.3182(T576). PetitionerUnitedMuslimandChristianUrbanPoorAssociation,Inc. (UMCUPAI), an organization of squatters occupying Lot No. 300, through its President, Carmen T. Diola, initiated negotiations with SFC for the purchase thereof. UMCUPAI expressed its intention to buy the subject property using the proceeds of its pending loan application with National Home Mortgage Finance Corporation (NHMF).Thereafter,thepartiesexecutedaLetterofIntenttoSellby [SFC]andLetterofIntenttoPurchasebyUMCUPAI However,theintendedsalewasderailedduetoUMCUPAIsinability tosecuretheloanfromNHMFasnotallitsmembersoccupyingLot No. 300 were willing to join the undertaking. Intent on buying the subject property, UMCUPAI, in a series of conferences with SFC, proposed the subdivision of Lot No. 300 to allow the squatter occupantstopurchaseasmallerportionthereof. Consequently, sometime in December 1994, Lot No. 300 was subdividedintothree(3)partscoveredbyseparatetitles:Lot300A, Lot300B,Lot300C,respectively. On January 11, 1995, UMCUPAI purchased Lot No. 300A for P4,350,801.58.Inturn,LotNo.300Bwasconstitutedasroadrightof wayanddonatedbySFCtothelocalgovernment. UMCUPAIfailedtoacquireLotNo.300Cforlackoffunds.OnMarch 5, 1995, UMCUPAI negotiated anew with SFC and was given by the latter another three months to purchase Lot No. 300C. However, despite the extension, the threemonth period lapsed with the sale notconsummatedbecauseUMCUPAIstillfailedtoobtainaloanfrom NHMF. Thus, on July 20, 1995, SFC sold Lot No. 300C for P2,547,585.00 to respondent BRYCV Development Corporation (BRYC). A year later, UMCUPAI filed with the RTC a complaint against respondentsSFCandBRYCseekingtoannulthesaleofLotNo.300C, andthecancellationofTCTNo.T121,523.UMCUPAIallegedthatthe sale between the respondents violated its valid and subsisting agreement with SFC embodied in the Letter of Intent. According to UMCUPAI, the Letter of Intent granted it a prior, better, and preferredrightoverBRYCinthepurchaseofLotNo.300C. SFCcounteredthattheLetterofIntentdatedOctober4,1991isnot, andcannotbeconsidered,avalidandsubsistingcontractofsale.On the contrary, SFC averred that the document was drawn and executedmerelytoaccommodateUMCUPAIandenableittocomply with the loan documentation requirements of NHMF. In all, SFC maintained that the Letter of Intent dated October 4, 1991 was subject to a condition i.e., payment of the acquisition price, which UMCUPAIfailedtodowhenitdidnotobtaintheloanfromNHMF. Aftertrial,theRTCdismissedUMCUPAIscomplaint.Thelowercourt found that the Letter of Intent was executed to facilitate the approvalofUMCUPAIsloanfromNHMFforitsintendedpurchaseof Lot No. 300. According to the RTC, the Letter of Intent was simply SFCs declaration of intention to sell, and not a promise to sell, the subjectlot.Onthewhole,theRTCconcludedthattheLetterofIntent was neither a promise, nor an option contract, nor an offer contemplated under Article 1319 of the Civil Code, or a bilateral contracttosellandbuy. Issue:

WON the Letter of Intent to Sell and Letter of Intent to Buy is a bilateral reciprocal contract within the meaning or contemplation of Article 1479 (1) of theCivilCodeofthePhilippines. Ruling: Thepetitiondeservesscantconsideration. UMCUPAI appears to labor under a cloud of confusion. The first paragraph of Article 1479 contemplates the bilateral relationship of a contract to sell as distinguished from a contract of sale which may be absolute or conditional underArticle1458ofthesamecode.Itreads: Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocallydemandable. Anacceptedunilateralpromisetobuyortoselladeterminatethingforaprice certain is binding upon the promissor if the promise is supported by a considerationdistinctfromtheprice. The case of Coronel v. Court of Appeals is illuminating and explains the distinctionbetweenaconditionalcontractofsaleunderArticle1458oftheCivil CodeandabilateralcontracttosellunderArticle1479ofthesamecode: A contract to sell may thus be defined as a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject propertydespitedeliverythereoftotheprospectivebuyer,bindshimselftosell the said property exclusively to the prospective buyer upon fulfillment of the conditionagreedupon,thatis,fullpaymentofthepurchaseprice. A contract to sell as defined hereinabove, may not even be considered as a conditional contract of sale where the seller may likewise reserve title to the property subject of the sale until the fulfillment of a suspensive condition, becauseinaconditionalcontractofsale,thefirstelementofconsentispresent, althoughitisconditioneduponthehappeningofacontingenteventwhichmay or may not occur. If the suspensive condition is not fulfilled, the perfection of thecontractofsaleiscompletelyabated.However,ifthesuspensivecondition is fulfilled, the contract of sale is thereby perfected, such that if there had alreadybeenpreviousdeliveryofthepropertysubjectofthesaletothebuyer, ownership thereto automatically transfers to the buyer by operation of law withoutanyfurtheracthavingtobeperformedbytheseller. In a contract to sell, upon the fulfillment of the suspensive condition which is thefullpaymentofthepurchaseprice,ownershipwillnotautomaticallytransfer tothebuyeralthoughthepropertymayhavebeenpreviouslydeliveredtohim. The prospective seller still has to convey title to the prospective buyer by enteringintoacontractofabsolutesale. Itisessentialtodistinguishbetweenacontracttosellandaconditionalcontract ofsalespeciallyincaseswherethesubjectpropertyissoldbytheownernotto the party the seller contracted with, but to a third person, as in the case at bench.Inacontracttosell,therebeingnoprevioussaleoftheproperty,athird personbuyingsuchpropertydespitethefulfillmentofthesuspensivecondition suchasthefullpaymentofthepurchaseprice,forinstance,cannotbedeemed a buyer in bad faith and the prospective buyer cannot seek the relief of reconveyanceoftheproperty. There is no double sale in such case. Title to the property will transfer to the buyerafterregistrationbecausethereisnodefectintheownersellerstitleper se,butthelatter,ofcourse,maybesuedfordamagesbytheintendingbuyer. Inaconditionalcontractofsale,however,uponthefulfillmentofthesuspensive condition, the sale becomes absolute and this will definitely affect the sellers titlethereto.Infact,iftherehadbeenpreviousdeliveryofthesubjectproperty, thesellersownershiportitletothepropertyisautomaticallytransferredtothe buyersuchthat,thesellerwillnolongerhaveanytitletotransfertoanythird person. Applying Article 1544 of the Civil Code, such second buyer of the propertywhomayhavehadactualorconstructiveknowledgeofsuchdefectin the sellers title, or at least was charged with the obligation to discover such defect, cannot be a registrant in good faith. Such second buyer cannot defeat

thefirstbuyerstitle.Incaseatitleisissuedtothesecondbuyer,thefirstbuyer mayseekreconveyanceofthepropertysubjectofthesale. In the instant case, however, the parties executed a Letter of Intent, which is neitheracontracttosellnoraconditionalcontractofsale.AsfoundbytheRTC, and upheld by the CA, the Letter of Intent was executed to accommodate UMCUPAIandfacilitateitsloanapplicationwithNHMF.TheLetterofIntentto BuyandSellisjustthatamanifestationofSFCsintentiontoselltheproperty andUMCUPAIsintentiontoacquirethesame. TheLetterofIntent/AgreementbetweenSFCandUMCUPAIismerelyawritten preliminaryunderstandingofthepartieswhereintheydeclaredtheirintention toenterintoacontractofsale.ItissubjecttotheconditionthatUMCUPAIwill "applywiththeHomeMortgageandFinanceCorporationforaloantopaythe acquisitionpriceofsaidland." TheLetterofIntenttoSellfellshortofan"offer"contemplatedinArticle1319 of the Civil Code because it is not a certain and definite proposal to make a contract but merely a declaration of SFCs intention to enter into a contract. UMCUPAIsdeclarationofintentiontobuyisalsonotcertainanddefiniteasitis subjecttotheconditionthatUMCUPAIshallendeavortoraisefundstoacquire subjectland.Theacceptanceoftheoffermustbeabsolute;itmustbeplainand unconditional. Moreover, the Letter of Intent/Agreement does not contain a promiseorcommitmenttoenterintoacontractofsaleasitmerelydeclaredthe intention of the parties to enter into a contract of sale upon fulfillment of a conditionthatUMCUPAIcouldsecurealoantopayforthepriceofaland. TheLetterofIntent/Agreementisnotan"optioncontract"becauseasidefrom thefactthatitismerelyadeclarationofintentiontosellandtobuysubjectto theconditionthatUMCUPAIshallraisethenecessaryfundstopaythepriceof the land, and does not contain a binding promise to sell and buy, it is not supported by a distinct consideration distinct from the price of the land intendedtobesoldandtobeboughtxxxNooptionwasgrantedtoUMCUPAI undertheLetterofIntent/Agreementtobuysubjectlandtotheexclusionofall others within a fixed period nor was SFC bound under said Agreement to Sell exclusivelytoUMCUPAIonlythesaidlandwithinthefixedperiod. NeithercantheLetterofIntent/Agreementbeconsideredabilateralreciprocal contract to sell and to buy contemplated under Article 1479 of the Civil Code which is reciprocally demandable. The Letter of Intent/Agreement does not containaPROMISEtosellandtobuysubjectproperty.Therewasnopromiseor commitmentonthepartofSFCtosellsubjectlandtoUMCUPAI,butmerelya declaration of its intention to buy the land, subject to the condition that UMCUPAI could raise the necessary funds to acquire the same at the price of P105.00persquaremeterxxx WHEREFORE,premisesconsidered,thepetitionisherebyDENIED.TheDecision oftheCourtofAppealsinCAG.R.CVNo.62557andtheRegionalTrialCourtin CivilCaseNo.467(4544)areAFFIRMED.Costsagainstthepetitioner. 4.) E.C. MCCULLOUGH & CO. vs. S. M. BERGER, 43 Phil. 823, G.R. No. 19009, September26,1922 Facts: In the month of February, 1918, plaintiff and defendant entered into an agreementbywhichthedefendantwastodeliverplaintiff501balesoftobacco to New York City in good condition. That delivery was made and the plaintiff paid the full purchase price. That upon an examination later the tobacco was foundtobeinamustycondition,anditsvaluewas$12,000lessthanitwould havebeenifthetobaccohadbeenintheconditionwhichdefendantagreedthat it should be, as a result of which plaintiff claims damages for $12,000, United Statescurrency,orP24,000,Philippinecurrency.Thatwhentheconditionofthe tobaccowasdiscovered,plaintiffpromptlynotifiedthedefendant,whoignored theprotest.Wherefore,theplaintiffpraysjudgmentfortheamountofP24,000, Philippinecurrency,forcostsandgeneralrelief. The lower court rendered judgment against the defendant and in favor of the plaintiff for the sum of P11,867.98 or P23,735.96 with legal interest from January 6, 1922, and costs, from which, after his motion for a new trial was overruled,thedefendantappeals,claimingthatthecourterred:First,infinding

thatthetobaccowasnotingoodconditionwhenitarrivedinNewYork;second, in holding that the plaintiff is entitled to maintain an action for breach of contract after having agreed with the defendant to rescind and to make restitution of the subjectmatter and the price after a violation of the agreement; third in holding that the plaintiff, having elected to rescind and notified the defendant of such an election, may now refused it and affirm the sameandrecoverfromtheallegedbreachofwarranty;fourth,inholdingthat this action should be maintained, no claim having been made for the alleged breach of warranty of quality within the statutory period; and, fifth, in overrulingthedefendant'smotionforanewtrial. Issue: Isthedefendantliableforbreachofcontract? Ruling: Affirmative.Defendantshoulderstheloss. Thedefectsinthetobaccowereinherentandcouldnotbeascertainedwithout openingthebalesandmakingaphysicalexamination.Whenthiswasdone,the plaintiffpromptlycabledthedefendantthatthetobaccowasnotsatisfactory.In the nature of things, the plaintiff could not then render the defendant a statement of the amount of this claim. By the terms of the contract, the defendant guaranteed the arrival of the tobacco in New York "in good condition." The Although the word "sold" is used in the written contract, the transaction showsthatthesalewasnotcompleteuntilthearrivalofthegoodsinNewYork. The fair construction to be put upon the contract is, that on the arrival of the ship containing the goods, the defendants should deliver them, and the plaintiffsshouldpaythecontractprice.Andtheauthoritiesholdthatthearrival of the goods, in such case, is a condition precedent, which must be shown to havetakenplacebeforeeitherpartycanbringsuit. 5.)WELGODICHOSO,ETAL.vs.LAURAROXAS,ETAL.,CELSOBORJAandNELIA ALANGUILAN,5SCRA781,G.R.No.L17441,July31,1962 Facts: On December 13, 1954, Laura A. Roxas sold to Borja for the sum of P850.00 a parcelofunregisteredcoconutlandwithanareaof16,965squaremetersand with393coconuttrees,situatedinBarrioSanDiego,SanPablo,Laguna,subject totheconditionthatthevendorcouldrepurchaseitforthesameamountwithin fiveyears,butnotearlierthanthreeyears,fromthedateofthesalewhichwas evidencedbyapublicdocument. From November 26, 1955 to July 5, 1957, Roxas had received from Dichoso severalsumsofmoneyamountingtoP770.00,theiragreementbeingthatafter December 13, 1957, Roxas would sell the same property, by absolute sale, to Dichoso for the total sum of P2,000.00, the aforesaid sum of P770.00 to be consideredasinitialoradvancepaymentonthepurchaseprice. Out of the balance of P1,230.00, Dichoso would use the sum of P850.00 to repurchase the property from Roxas after December 13, 1954 but within the fiveyearsstipulatedfortheexerciseofRoxas'righttorepurchase. On October 22, 1957, pursuant to Roxas' request made on July 23, 1957, Dichoso sent her a check for the sum of P320.00 "in full payment of the P2,000.00 consideration for the deed of absolute sale" and thereafter they informedBorjaoftheirreadinesstorepurchasetheproperty. OnNovember29,1957Roxassentthembackthecheckjustreferredtowiththe requestthattheyendorsethesametoBorjawhentheymadetherepurchase, becauseitappearedthat,asidefromtheP850.00considerationofthepactode retrosale,RoxashadreceivedadditionalsumsfromBorja. After December 13, 1957, Dichoso made representations to Borja that they were ready to make the repurchase, as well as to Roxas for the latter to be ready to execute the corresponding deed of absolute sale in their favor after

they had made the repurchase; that notwithstanding these demand and representations, Roxas and Borja had deliberately failed to execute the correspondingdeedofabsolutesaleanddeedofresalealreadymentioned. On January 8, 1958 Borja filed a motion to dismiss the complaint upon the groundthatDichosohadnocauseofactionagainstthembecausetheircontract wasnotthembutwithLauraA.Roxas.LCsustainedthemotionanddismissed thecomplaintbecause,accordingtothesame,"thereexistsnowrittencontract of assignment of rights executed by Laura A. Roxas in favor of the herein plaintiffs concerning property which said Laura A. Roxas sold to her co defendants under a deed of pacto de retro sale, and that the purpose of the present action is precisely to compel Laura A. Roxas to execute the correspondingdeedofassignment." Issue: Whether or not Dichoso can repurchase the coconut land which was sold to BorjabyLauraRoxas. Ruling: No. It is obvious that in deciding the case, the lower court failed to give due weight to the deed of absolute sale executed by Laura A. Roxas in favor of appellantsonDecember8,1957ineffectsupersedingthepactoderetrosale mentioned heretofore for a total consideration of P1,684.00, of which the amount of P850.00 paid as consideration for the pacto de retro sale was considered as a part. There is no dispute at all as to the genuineness of this privatedeedofabsolutesalenorastoitsexecutiononDecember8,1957.that is, five days prior to December 13, 1957, when according to appellees themselves,theymadethefirstattempttorepurchasethepropertyinquestion, and on which occasion appellants refused to allow the repurchase "because Laura A. Roxas was not with them", according to the lower court. After December 8, 1957,appellants' rights were no longer based on the superseded pacto de retro sale but on the aforesaid deed of absolute sale which was a perfectlyvalidcontractasbetweentheparties. In plain words, after that date Laura A. Roxas no longer had any right to repurchasetheproperty.Moreover,BorjahadnoknowledgeuntilDecember13, 1957thatRoxashadassignedherrighttorepurchasetoDichoso. Suchbeingitscondition,itcouldnotpossiblygiverisetothecaseofoneandthe samepropertyhavingbeensoldtotwodifferentpurchasers.Thesaltinfavor of appellants was of the property itself, while the one in favor of appellees, if notamerepromisetoassign,wasatmostanactualassignmentoftherightto repurchase the same property. The provisions of paragraph 3, Article 1544 of theCivilCodeofthePhilippineswhichreadasfollows:Ifthesamethingshould havebeensoldtodifferentvendees,theownershipshallbetransferredtothe personwhomayhavefirsttakenpossessionthereofingoodfaith,ifitshouldbe movableproperty.Shouldtherebenoinscription,theownershipshallpertainto the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.(Emphasissupplied)donot,therefore,apply. Havingarrivedattheaboveconclusions,weareconstrainedtoholdthat,upon the facts of the case, appellees are not entitled to the reliefs sought in their amendedcomplaintandthatwhateverremedytheyhaveisexclusivelyagainst Laura A. Roxas to recover from her, among other things, what they paid as considerationfortheexecutionoftheprivatedocumentExhibitI. WHEREFORE, the decision appealed from is reversed, with the result that this caseisdismissed,withcosts,reservingtoappellees,however,therighttofilea separate action against Laura A. Roxas to enforce whatever rights they may haveagainstherinconsonancewiththisdecision. 6.) LUZON BROKERAGE CO., INC. vs. MARITIME BUILDING CO., INC., and MYERS BUILDING CO., INC., MARITIME BUILDING CO., INC., 43 SCRA 93, G.R. No.L25885,January31,1972 7.)SpousesRICARDOandFERMAPORTICvs.ANASTACIACRISTOBAL,456SCRA 577,G.R.No.156171,April22,2005

Facts: In1968,spousesPorticacquiredaparceloflandwitha3doorapartmentfrom Sps. Alcantara even though theyre aware that the land was mortgaged to the SSS. Portic defaulted in paying SSS. The Portics then executed a contract with Cristobal and the latter agreed to buy the said property for P200k. Cristobals downpaymentwasP45kandshealsoagreedtopaySSS.Thecontractbetween themstates:ThatwhilethebalanceofP155,000.00hasnotyetbeenfullypaid the FIRST PARTYOWNERS shall retain the ownership of the above described parcel of land together with its improvements but the SECOND PARTY BUYER shallhavetherighttocollectthemonthlyrentalsdueonthefirstdoor(13A)of thesaidapartment;(paymentisdue22May1985,ifCristobalwillnotbeableto pay Portic will reimburse) A transfer certificate was executed in favor of Cristobal.Cristobalwasnotabletopayontheduedate.Asuitensuedtoliftthe cloudonthetitle. Issue: Whoistherightfulowneroftheparcelofland? Ruling: The Portics insofar asthere was nocontract ofsale. Whattranspiredbetween thepartieswasacontracttosell.Theprovisionofthecontractcharacterizesthe agreement between the parties as a contract to sell, not a contract of sale. Ownership is retained by the vendors, the Portics; it will not be passed to the vendee, the Cristobals, until the full payment of the purchase price. Such paymentisapositivesuspensivecondition,andfailuretocomplywithitisnota breach of obligation; it is merely an event that prevents the effectivity of the obligationofthevendortoconveythetitle.Inshort,untilthefullpriceispaid, the vendor retains ownership. The mere issuance of the Certificate of Title in favor of Cristobal did not vest ownership in her. Neither did it validate the alleged absolute purchase of the lot. Registration does not vest, but merely serves as evidence of, title. Our land registration laws do not give the holders any better title than that which they actually have prior to registration. Under Article1544oftheCivilCode,mereregistrationisnotenoughtoacquireanew title. Good faith must concur. Clearly, Cristobal has not yet fully paid the purchaseprice.Hence,aslongasitremainsunpaid,shecannotfeigngoodfaith. She is also precluded from asserting ownership against the Portics. The CAs findingthatshehadavalidtitletothepropertymustbesetaside. 8.) HEIRS OF JESUS M. MASCUANA, represented by JOSE MA. R. MASCUANA vs. COURT OF APPEALS, AQUILINO BARTE, and SPOUSES RODOLFOandCORAZONLAYUMAS,461SCRA186,G.R.No.158646,June23, 2005 Facts: Masunana bought a parcel of land from the Wuthrich siblings. Part of which Mascunana,helatersoldtoSumilhig.Thecontractpriceis4,690with3,690as down payment. Their agreement says: That the balance of ONE THOUSAND PESOS(P1,000.00)shallbepaidbytheVENDEEuntotheVENDORassoonasthe aboveportionsofLot124shallhavebeensurveyedinthenameoftheVENDEE andallpaperspertinentandnecessarytotheissuanceofaseparateCertificate ofTitleinthenameoftheVENDEEshallhavebeenprepared.Sumilhiglatersold the same lot to Layumas. Years after, Layumas wrote to the heirs of Mascunana(sinceMascunanadiedalready)offeringtopaythe1,000balanceof thepurchasepriceoftheproperty.Theaddressee,however,refusedtoreceive the mail matter.Heirs Mascunana then filed a complaint for recovery of possession against Barte ( an individual whomLayumas allowed to stay on the subjectproperty). Issue: WON the contract of alienation of the subject lot in favor of Sumilhig was a contracttoselloracontractofsale. Ruling:

Sale. Article1458oftheNewCivilCodeprovides: By the contract of sale, one of the contracting parties obligates himself to transfertheownershipofandtodeliveradeterminatething,andtheotherto paythereforapricecertaininmoneyoritsequivalent. Acontractofsalemaybeabsoluteorconditional. Thus,therearethreeessentialelementsofsale,towit: a) Consent or meeting of the minds, that is, consent to transfer ownership in exchangefortheprice; b)Determinatesubjectmatter;and c)Pricecertaininmoneyoritsequivalent. In this case, there was a meeting of the minds between the vendor and the vendee,whenthevendorundertooktodeliverandtransferownershipoverthe property covered by the deed of absolute sale to the vendee for the price of P4,690.00 of which P3,690.00 was paid by the vendee to the vendor as down payment. The vendor undertook to have the property sold, surveyed and segregatedandaseparatetitlethereforissuedinthenameofthevendee,upon whichthelatterwouldbeobligedtopaythebalanceofP1,000.00.Therewasno stipulationinthedeedthatthetitletothepropertyremainedwiththevendor, orthattherighttounilaterallyresolvethecontractuponthebuyersfailureto pay within a fixed period was given to such vendor. Patently, the contract executedbythepartiesisadeedofsaleandnotacontracttosell.AstheCourt ruled in a recent case: In Dignos v. Court of Appeals (158 SCRA 375), we have said that, although denominated a Deed of Conditional Sale, a sale is still absolutewherethecontractisdevoidofanyprovisothattitleisreservedorthe right to unilaterally rescind is stipulated, e.g., until or unless the price is paid. Ownership will then be transferred to the buyer upon actual or constructive delivery (e.g. by the execution of a public document) of the property sold. Wheretheconditionisimposedupontheperfectionofthecontractitself,the failure of the condition would prevent such perfection. If the condition is imposedontheobligationofapartywhichisnotfulfilled,theotherpartymay either waive the condition or refuse to proceed with the sale. (Art. 1545, Civil Code). Thus, in one case, when the sellers declared in a Receipt of Down Payment that they received an amount as purchase price for a house and lot withoutanyreservationoftitleuntilfullpaymentoftheentirepurchaseprice, the implication was that they sold their property. In Peoples Industrial and Commercial Corporation v. Court of Appeals, it was stated: A deed of sale is considered absolute in nature where there is neither a stipulation in the deed thattitletothepropertysoldisreservedintheselleruntilfullpaymentofthe price,noronegivingthevendortherighttounilaterallyresolvethecontractthe momentthebuyerfailstopaywithinafixedperiod.Applyingtheseprinciplesto thiscase,itcannotbegainsaidthatthecontractofsalebetweenthepartiesis absolute,notconditional.Thereisnoreservationofownershipnorastipulation providing for a unilateral rescission by either party. In fact, the sale was consummated upon the delivery of the lot to respondent. Thus, Art. 1477 providesthattheownershipofthethingsoldshallbetransferredtothevendee upontheactualorconstructivedeliverythereof.Theconditioninthedeedthat thebalanceofP1,000.00shallbepaidtothevendorbythevendeeassoonas the property sold shall have been surveyed in the name of the vendee and all paperspertinentandnecessarytotheissuanceofaseparatecertificateoftitle in the name of the vendee shall have been prepared is not a condition which preventedtheefficacyofthecontractofsale.Itmerelyprovidesthemannerby whichthetotalpurchasepriceofthepropertyistobepaid.Theconditiondid notpreventthecontractfrombeinginfullforceandeffect:Thestipulationthat the payment of the full consideration based on a survey shall be due and payable in five (5) years from the execution of a formal deed of sale is not a condition which affects the efficacy of the contract of sale. It merely provides the manner by which the full consideration is to be computed and the time within which the same is to be paid. But it does not affect in any manner the effectivityofthecontract.Inacontracttosell,ownershipisretainedbyaseller andisnottobetransferredtothevendeeuntilfullpaymentoftheprice.Such paymentisapositivesuspensivecondition,thefailureofwhichisnotabreach of contract but simply an event that prevented the obligation from acquiring binding force. It bears stressing that in a contract of sale, the nonpayment of thepriceisaresolutoryconditionwhichextinguishesthetransactionthat,fora time, existed and discharges the obligation created under the transaction. A seller cannot unilaterally and extrajudicially rescind a contract of sale unless

thereisanexpressstipulationauthorizingit.Insuchcase,thevendormayfilean action for specific performance or judicial rescission. Article 1169 of the New CivilCodeprovidesthatinreciprocalobligations,neitherpartyincursindelayif the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him; from the moment one of the parties fulfill his obligation,delaybytheotherbegins.Inthiscase,thevendor(JesusMascuana) failed to comply with his obligation of segregating Lot No. 124B and the issuance of a Torrens title over the property in favor of the vendee, or the latters successorsininterest, the respondents herein. Worse, petitioner Jose Mascuana was able to secure title over the property under the name of his deceasedfather. 9.) WINIFREDA URSAL vs. COURT OF APPEALS, THE RURAL BANK OF LARENA (SIQUIJOR), INC. and SPOUSES JESUS MONESET and CRISTITA MONESET, 473 SCRA52,G.R.No.142411,October14,2005 Facts: Monesets entered into a contract to sell with Ursal. Ursal stopped paying the installment (as stated in the contract) because Moneset failed to deliver the transfer certificate of title of the property as per their agreement. Moneset executedanabsolutedeedofsaletoDr.RafaelCanora,Jr.Monesetsexecuted another sale, this time with pacto de retro with Restituto Bundalo.7 On the sameday,Bundalo,asattorneyinfactoftheMonesets,executedarealestate mortgageoversaidpropertywithRuralBankofLarena An action for declaration of noneffectivity of mortgage and damages against theMonesets,BundaloandtheBankbyUrsal. Petitionerclaimsthat:theBankfailedtolookbeyondthetransfercertificateof titleofthepropertyforwhichitmustbeheldliable. Respondent answered: its interest in the property was only that of mortgagee and not a purchaser thus its interest is limited only to ascertaining that the mortgagoristheregisteredowner; Issue: Theeffectivityofthemortgage. Ruling: The court agreed that banks cannot merely rely on certificates of title in ascertainingthestatusofmortgagedproperties;astheirbusinessisimpressed with public interest, they are expected to exercise more care and prudence in their dealings than private individuals.31 Indeed, the rule that persons dealing withregisteredlandscanrelysolelyonthecertificateoftitledoesnotapplyto banks. But,thecontractwasacontracttosell,Ursalneveracquiredownershipoverthe property.Thus,theMonesetshastherighttodisposetheproperty. Inacontracttosell,therebeingnoprevioussaleoftheproperty,athirdperson buyingsuchpropertydespitethefulfillmentofthesuspensiveconditionsuchas thefullpaymentofthepurchaseprice,forinstance,cannotbedeemedabuyer inbadfaithandtheprospectivebuyercannotseekthereliefofreconveyanceof theproperty. Petitionersrecourseshouldbe: Petitionersrightswerelimitedtoaskingforspecificperformanceanddamages fromtheMonesets. AdditionalNotes: Thecasediscussedwhatthecontracttosellisabout: A contract to sell is a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property

exclusively to the prospective buyer upon fulfillment of the condition agreed upon,thatis,fullpaymentofthepurchaseprice. 10.) FERNANDO CARRASCOSO, JR. vs. THE HONORABLE COURT OF APPEALS, LAUROLEVISTE,asDirectorandMinorityStockholderandOnBehalfofOther StockholdersofElDoradoPlantation,Inc.andELDORADOPLANTATION,INC., represented by one of its minority stockholders, Lauro P. Leviste, 477 SCRA 666,G.R.No.123672,December14,2005 Facts: Once upon a sunny morning in Sablayan, Occidental Mindoro, El Dorado PlantationInc.,throughaboardmemberFelicianoLeviste,thenPresidentofEl Dorado Inc., executed a Deed of Sale with Fernando O. Carrascoso Jr. The subjectofthesalewasa1,825hectareofland. It was stipulated in the provisions of the Deed of Sale of Real Property that Carrascosoistopaythefollowing: (1)OfthesaidsumofP1.8Mconstitutinghefullconsiderationofthesale,P290k wouldbepaidbyCarrascosotoPNBtosettlethemortgageplacedonthesaid land. (2)P210kwouldbepaiddirectlytoLeviste;and (3)ThebalanceofP1.3Mplus10%interestwouldbepaidoverthenext3years atP519kevery25thofMarch. Leviste, on the other hand, gave Carrascoso the assurance that there were no tenantsonthesubjectland.Ergo,thelanddoesnotfallundertheLandReform Code.LevisteallowedCarrascosotomortgagetheland,whichthelatterdid. Carrascoso obtained a total of P1.07M as mortgage and used the same to pay thedownpaymentasagreedupon. Carrascosodefaultedfromhisobligation,whichwassupposedtobesettledon March25,1975. Leviste, then sent him letters to Carrascoso asking him to comply with his obligationtopay,otherwisetheformerwillfileacivilsuitagainstthelatter.But Carrascosomadenoreply.DuetoCarrascososfailuretoperformandreply,El Dorado Plantation Inc, pursued to file a complaint to rescind the Deed of Sale conveyedtoformer. Inthemeantime,CarrascosoexecutedaBuyandSellContractwithPLDTonthe 1977. The subject of the sale was a 1000hectare portion of the land sold to Carrascoso by Leviste. The land is to be sold at P3M. Part of the terms and conditions agreed upon was that Carrascoso is to remove all tenants from the landwithinoneyear.PLDT,byaDeedofAbsoluteSale,conveyedtheaforesaid 1,000hectareportiontoitssubsidiaryPLDTAC. InthecivilcaseproceedingagainstCarrascoso,PLDTintervenedaverringthatit wasabuyeringoodfaith.TheRTCruledinfavorofCarrascoso.CAreversedthe RTCruling. Issue: (1)WhatisthenatureofthecontractbetweenCarrascosoandElDorado? (2)WhatisthenatureofthecontractbetweenCarrascosoandPLDT? Ruling: (1)ThecontractexecutedbetweenElDoradoandCarrascosowasacontractof sale.Itwasperfectedbytheirmeetingofthemindsandwasconsummatedby thedeliveryofthepropertytoCarrascoso.ThefailureofCarrascosotodeliver theamountagreedupononthestipulateddateviolatessuchcontractofsale. Acontractofsaleisareciprocalobligation.Thesellerobligatesitselftotransfer theownershipofanddeliveradeterminatething,andthebuyerobligatesitself topaythereforapricecertaininmoneyoritsequivalent.Thenonpaymentof the price by the buyer is a resolutory condition which extinguishes the

transaction that for a time existed, and discharges the obligations created thereunder. Such failure to pay the price in the manner prescribed by the contractofsaleentitlestheunpaidsellertosueforcollectionortorescindthe contract. (2) The contract between Carrascoso and PLDT is a contract to sell. This is evidenced by the terms and conditions that they have agreed upon that after fulfillment of Carrascosos obligation PLDT has to notify Carrascoso of its decisionwhetherornottofinalizethesale. Beingacontracttosell,whatwasvestedbytheJuly11,1975AgreementtoBuy andSelltoPLDTwasmerelythebeneficialtitletothe1,000hectareportionof theproperty. *Notes(CopyandPastedfromtheCasesDecision) In a contract of sale, the title passes to the vendee upon the delivery of the thing sold; whereas in a contract to sell, ownership is not transferred upon delivery of the property but upon full payment of the purchase price. In the former,thevendorhaslostandcannotrecoverownershipuntilandunlessthe contractisresolvedorrescinded;whereasinthelatter,titleisretainedbythe vendor until the full payment of the price, such payment being a positive suspensive condition and failure of which is not a breach but an event that preventstheobligationofthevendortoconveytitlefrombecomingeffective. Forinaconditionalcontractofsale,ifthesuspensiveconditionisfulfilled,the contract of sale is thereby perfected, such that if there had already been previous delivery of the property subject of the sale to the buyer, ownership thereto automatically transfers to the buyer by operation of law without any furtheracthavingtobeperformedbytheseller.Whereasinacontracttosell, upon fulfillment of the suspensive condition, ownership will not automatically transfertothebuyeralthoughthepropertymayhavebeenpreviouslydelivered tohim.Theprospectivesellerstillhastoconveytitletotheprospectivebuyer byenteringintoacontractofabsolutesale. A perusal of the contract adverted to in Coronel reveals marked differences fromtheAgreementtoBuyandSellinthecaseatbar.IntheCoronelcontract, therewasaclearintentonthepartofthethereinpetitionerssellerstotransfer title to the therein respondentbuyer. In the July 11, 1975 Agreement to Buy and Sell, PLDT still had to definitely inform Carrascoso of its decision on whether or not to finalize the deed of absolute sale for the 1,000 hectare portion of the property, such that in the April 6, 1977 Deed of Absolute Sale subsequently executed, the parties declared that they are now decided to executesuchdeed,indicatingthattheAgreementtoBuyandSellwas,asthe appellatecourtheld,merelyapreparatorycontractinthenatureofacontract tosell.Infact,thepartiesevenhadtostipulateinthesaidAgreementtoBuy andSellthatCarrascoso,duringtheexistenceoftheAgreement,shallnotsell, cede,assignand/ortransfertheparcelofland,whichprovisionthisCourthas heldtobeatypicalcharacteristicofacontracttosell. 11.) SACOBIA HILLS DEVELOPMENT CORPORATION and JAIME C. KOA vs. ALLANU.TY,470SCRA395,G.R.No.165889,September20,2005 Facts: Petitioner is the developer of True North Gold and Country Club in Pampanga. It assured its shareholders that the development was proceeding on schedule and that the golf course would be playable by October1999. Respondentwrotetopetitioneraletterexpressinghisintentiontoacquire one (1) Class A share of True North and accordingly paid the reservation fee.PetitionerapprovedthepurchaseapplicationforP600,000.00subject tocertaintermsandconditions,interalia: o Approval of an application to purchase golf/country club shares is subjectedtothefullpaymentofthetotalpurchaseprice.Shouldthe buyer opt for the deferred payment scheme, approval is subject to our receipt of a down payment of at least 30% and the balance payableininstallmentsoveramaximumofeleven(11)monthsfrom thedateofapplication,andcoveredbypostdatedcheques.

Your reserved share shall be considered withdrawn and may be deemed cancelled should you fail to settle your obligation within fifteen(15)daysfromduedate,orfailuretocoverthevalueofthe postdated cheques upon their maturity, or your failure to issue the requiredpostdatedcheques.Inwhichcase,weshallreservetheright toofferthesaidsharestootherinterestedparties.Thisalsomeans forfeitureof50%ofthetotalamountyouhavealreadypaid. o 3. We shall undertake to execute the corresponding sales documents/DeedofAbsoluteSalecoveringthereservedsharesupon full payment of the total purchase price. The Certificate of Membershipshallbeissuedthereafter. One June 1999, respondent notified petitioner that he is rescinding the contract due to the latters failure to complete the project on time and soughtforrefundofhispaymentwhichamountedtoP409,090.02.Byway ofreply,petitionerinformedrespondentthatithadnorefundpolicy. Respondent filed a complaint for rescission and damages. RTC rendered judgmentinfavorofthepetitioner.Thetrialcourtfoundthatthecontract between the parties did not warrant that the golf course and clubhouse wouldbecompletedwithinacertainperiodoftimetoentitlerespondent torescind. CourtofAppealsreversedthedecisionofRTC.Itdirectedthepetitionerto refundtheappellant,withlegalinterestof12%perannumfromthedate of the filing of the complaint. It stated that respondent could properly rescind the contract, or demand specific performance with damages due tothepetitionersdelayintheperformanceofitsobligations. Petitioner filed a petition for review on certiorari before the Supreme Court. Sacobia contends that it was not in breach of the contract as the Intent to Purchase, the Contract of Purchase,andtheNoticeofApproval to Purchase Shares of True North, do not contain any specific date as to whenthegolfcourseandcountryclubwouldbecompleted.Itarguesthat respondent should have known the risks involved in this kind of project; theconstructionbeingcontingentontheissuanceoftheECCbytheDENR and the payment of the buyers of their share. On the other hand, respondent claims that Sacobias arguments raise new matters which would warrant the reversal of the decision rendered by the Court of Appeals. He insists that Sacobia failed to complete the project on time whichentitleshimtorescindthecontractinaccordancewithArticle1191 oftheCivilCode.Hefurtherarguesthatthedelayinthecompletionofthe projectisclearlyestablishedbythefactthattherehasbeennosubstantial workdoneonthesite,particularlyontheclubhouse,despitethelapseof nearly4yearsfromtheissuanceoftheECConMarch5,1998. o

Issue: Whether the contract entered into by petitioner and respondent a contract of saleoracontracttosell. Ruling: It was a contract to sell. In the notice of approval, which embodies the terms and conditions of the agreement, petitioner signified its intent to retain the ownershipofthepropertyuntilsuchtimethattherespondenthasfullypaidthe purchase price. In a Contract to Sell, the payment of the purchase price is a positive suspensive condition, the failure of which is not a breach, casual or serious,butasituationthatpreventstheobligationofthevendortoconveytitle from acquiring an obligatory force. As shown, respondent did not pay the full purchase price which is his obligation under the contract to sell, therefore, it cannot be said that petitionerbreacheditsobligation.Noobligationsarose on its part because respondents nonfulfillment of the suspensive condition renderedthecontracttosellineffectiveandunperfected. PetitionisGRANTED.DecisionofCAisREVERSEDandSETASIDE.Respondentis ORDERED to PAY to Sacobia Hills Development Corporation the amount of Pesos: One Hundred Ninety Thousand Nine Hundred Nine and Eight Centavos (P190,909.08) without interest within thirty (30) days from finality of the decision;otherwise,fiftypercent(50%)ofhistotalpaymentsshallbeforfeited. 12.)KEPPELBANKPHILIPPINES,INC.vs.PHILIPADAO,473SCRA372,G.R.No. 158227,October19,2005

Facts: Project Movers Realty and Development Corporation (PMRDC) owe P200M to Keppel Banks. By way of dacion en pago, PMRDC transferred and conveyed to thebank25ofitspropertiesconsistingoftownhousesandcondominiums.One oftheunitstransferredwasoccupiedbyAdao.InFeb2000,theBankdemanded Adaotovacate.Adaorefused.Anejectmentcasewasfiled.Adaoaverredthat hehadaContracttoSellwithPMRDC.Hepresentedanaffidavitshowingthat he made full payment thereof. The MeTC, RTC and CA ruled in favor of Adao. ThelowercourtsorderedKeppeltorespectthecontracttosellbetweenAdao andPMRDCforwhenthepropertiesweretransferredbywayofdacionenpago, thebankmerelysteppedontheshoesofPMRDC. Issue: WhetherornotKeppelisboundbythecontracttosell. Ruling: No. Though Keppel is not a purchaser in good faith for not looking into the property (checkingif it was infirm and free from other claims), the bank is not boundbyit.ThecontracttoselldoesnotbyitselfgiveAdaotherighttopossess theproperty.Unlikeinacontractofsale,hereinacontracttosell,thereisyet noactualsaleoranytransferoftitle,untilandunless,fullpaymentismade.The paymentofthepurchasepriceisapositivesuspensivecondition,thefailureof which is not a breach, casual or serious, but a situation that prevents the obligationofthevendortoconveytitlefromacquiringanobligatoryforce.Adao musthavefullypaidthepricetoacquiretitleoverthepropertyandtherightto retainpossessionthereof.Incasesofnonpayment,theunpaidsellercanavail of the remedy of ejectment since he retains ownership of the property. Adao must also, aside from showing an affidavit, show other proof of full payment made to PMRDC. Considering that Adao failed to discharge the burden of provingpayment,hecannotclaimownershipofthepropertyandhispossession thereofwasbymeretolerance.Hiscontinuedpossessionbecameunlawfulupon theownersdemandtovacatetheproperty. 13.) SPS. ALFREDO R. EDRADA and ROSELLA L. EDRADA vs. CARMENCITA RAMOS, SPS. EDUARDO RAMOS, 468 SCRA 597, G.R. No. 154413, August 31, 2005 Facts: Respondent spouses Eduardo and Carmencita Ramos (respondents) are the owners of 2 fishing vessels, the "Lady Lalaine" and the "Lady Theresa." On 1 April 1996, respondents and petitioners executed an untitled handwritten document which lies at the center of the present controversy. Its full text is reproducedbelow: 1stApril1996 ThisistoacknowledgethatFishingVesselsLadyLalaineandLadyTheresa ownedbyEduardoO.Ramosarenowinmypossessionandreceivedingood running and serviceable order. As such, the vessels are now my responsibility. Documentspertainingtothesaleandagreementofpaymentsbetweenme andtheownerofthevesseltofollow.TheagreedpriceforthevesselisNine HundredThousandOnly(P900,000.00). (SGD.)(SGD.) EDUARDOO.RAMOSALFREDOR.EDRADA (Seller)(Purchaser) CONFORME:CONFORME: (SGD.)(SGD.) CARMENCITARAMOSROSIEENDRADA

Upon the signing of the document, petitioners delivered to respondents 4 postdated Far East Bank and Trust Company (FEBTC) checks payable to cash drawn by petitioner Rosella Edrada, in various amounts totaling P140,000.00. The first 3 checks were honored upon presentment to the drawee bank while thefourthcheckforP100,000.00wasdishonoredbecauseofa"stoppayment" order. On 3 June 1996, respondents filed an action against petitioners for specific performancewithdamagesbeforetheRTC,prayingthatpetitionersbeobliged toexecutethenecessarydeedofsaleofthetwofishingvesselsandtopaythe balance of the purchase price. In their Complaint, respondents alleged that petitioners contracted to buy the two fishing vessels for the agreed purchase price of P900,000.00, as evidenced by the abovequoted document, which accordingtothemevincedacontracttobuy.However,despitedeliveryofsaid vessels and repeated oral demands, petitioners failed to pay the balance, so respondentsfurtheraverred. Petitioners averred that the document sued upon merely embodies an agreementbroughtaboutbytheloanstheyextendedtorespondents.According to petitioners, respondents allowed them to manage or administer the fishing vessels as a business on the understanding that should they find the business profitable,thevesselswouldbesoldtothemforNineHundredThousandPesos P900,000.00.Butpetitioners"decidedtocallitquits"afterspendingaheftysum fortherepairandmaintenanceofthevesselswhichwerealreadyindilapidated condition. The RTC ruled in favor of the plaintiffs (Edrada) and against the defendants (Ramos) and the latter (Ramos) are ordered to pay to the former(Edrada) the amount of P860,000.00 with legal interests thereon from June 30, 1996 until fullypaid;theamountofP20,000.00asattorneysfeesandthecostofsuit.The counterclaim of the defendants for moral and exemplary damages and for attorneysfeesisdismissedforlackofmerit. The RTC treated the action as one for collection of a sum of money and for damages and considered the document as a perfected contract of sale. PetitionersfiledaMotionforReconsiderationwhichtheRTCdenied. BothpartiesappealedtheRTCDecision.TheCourtofAppealsaffirmedtheRTCs decisionanddismissedbothappeals.Onlypetitionerselevatedthecontroversy tothisCourt. Issue: WONtherewasaperfectedcontractofsale. Ruling: We disagree with the RTC and the Court of Appeals that the document is a perfected contract of sale. A contract of sale is defined as an agreement whereby one of the contracting parties obligates himself to transfer the ownershipofandtodeliveradeterminatething,andtheothertopaytherefore apricecertaininmoneyoritsequivalent.Itmustevincetheconsentonthepart ofthesellertotransferanddeliverandonthepartofthebuyertopay. Anexaminationofthedocumentrevealsthatthereisnoperfectedcontractof sale.Theagreementmayconfirmthereceiptbyrespondentsofthetwovessels andtheirpurchaseprice.However,thereisnoequivocalagreementtotransfer ownershipofthevessel,butamerecommitmentthat"documentspertainingto thesaleandagreementofpayments[are]tofollow."Evidently,thedocument ordocumentswhichwouldformalizethetransferofownershipandcontainthe termsofpaymentofthepurchaseprice,ortheperiodwhensuchwouldbecome due and demandable, have yet to be executed. But no such document was executedandnosuchtermswerestipulatedupon. The fact that there is a stated total purchase price should not lead to the conclusion that a contract of sale had been perfected. In numerous cases, the most recent of which is Swedish Match, AB v. Court of Appeals, we held that beforeavalidandbindingcontractofsalecanexist,themannerofpaymentof thepurchasepricemustfirstbeestablished,assuchstandsasessentialtothe validityofthesale.Afterall,suchagreementonthetermsofpaymentisintegral

to the element of a price certain, such that a disagreement on the manner of paymentistantamounttoafailuretoagreeontheprice. Assumingarguendothatthedocumentevincesaperfectedcontractofsale,the absence of definite terms of payment therein would preclude its enforcement by the respondents through the instant Complaint. A requisite for the judicial enforcement of an obligation is that the same is due and demandable. The absence of a stipulated period by which the purchase price should be paid indicatesthatatthetimeofthefilingofthecomplaint,theobligationtopaywas notyetdueanddemandable. Respondents, during trial, did claim the existence of a period. Respondent Carmencita Ramos, during crossexamination, claimed that the supposed balanceshallbepaidon30June1996.Buthowdorespondentsexplainwhythe Complaintwasfiledon3June1996?Assumingthatthe30June1996periodwas duly agreed upon by the parties, the filing of the Complaint was evidently premature, as no cause of action had accrued yet. There could not have been any breach of obligation because on the date the action was filed, the alleged maturitydateforthepaymentofthebalancehadnotyetarrived. Inorderthatrespondentscouldhaveavalidcauseofaction,itisessentialthat theremusthavebeenastipulatedperiodwithinwhichthepaymentwouldhave become due and demandable. If the parties themselves could not come into agreement, the courts may be asked to fix the period of the obligation, under Article1197oftheCivilCode.Therespondentsdidnotavailofsuchreliefprior to the filing of the instant Complaint; thus, the action should fail owing to its obviousprematurity. Returningtothetruenatureofthedocument,weneithercouldconcludethata "contracttosell"hadbeenestablished.Acontracttosellisdefinedasabilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyeruponfulfillmentoftheconditionagreedupon,thatis,fullpaymentofthe purchaseprice. Acontractisperfectedwhenthereisconcurrenceofthewillsofthecontracting partieswithrespecttotheobjectandthecauseofthecontract.Inthiscase,the agreementmerelyacknowledgesthatapurchasepricehadbeenagreedonby theparties.Therewasnomutualpromisetobuyonthepartofpetitionersand to sell on the part of respondents. Again, the aforestated proviso in the agreement that documents pertaining to the sale and agreement of payments betweenthepartieswillfollowclearlymanifestslackofagreementbetweenthe partiesastothetermsofthecontracttosell,particularlytheobjectandcause ofthecontract. The agreement in question does not create any obligatory force either for the transfer of title of the vessels, or the rendition of payments as part of the purchaseprice.Atmost,thisagreementbaresonlytheirintentiontoenterinto eitheracontracttoselloracontractofsale. Consequently,thecourtsbelowerredinorderingtheenforcementofacontract of sale that had yet to come into existence. Instead, the instant Complaint should be dismissed. It prays for three reliefs arising from the enforcement of thedocument:executionbythepetitionersofthenecessarydeedofsaleover the vessels, the payment of the balance of the purchase price, and damages. The lower courts have already ruled that damages are unavailing. Our finding thatthereisnoperfectedcontractofsaleprecludesthefindingofanycauseof action that would warrant the granting of the first two reliefs. No cause of action arises until there is a breach or violation thereof by either party.24 Consideringthatthedocumentscreatenoobligationtoexecuteorevenpursue acontractofsale,butonlymanifestanintentiontoeventuallycontractone,we findnorightsbreachedorviolatedthatwouldwarrantanyofthereliefssought intheComplaint. The petition is GRANTED. The assailed Decision and Resolution of the Court of AppealsareREVERSEDandSETASIDE.ThecasebeforetheRegionalTrialCourt isordereddismissed.Nopronouncementastocosts.SOORDERED.

CONTRACTFORAPIECEOFWORK 1.)CELESTINOCO&COMPANYvs.COLLECTOROFINTERNALREVENUE,99Phil. 841,G.R.No.L8506,August31,1956 Facts: Celestino Co & Company is a duly registered general copartnership doing businessunderthetradenameof"OrientalSashFactory".From1946to1951it paidpercentagetaxesof7percentonthegrossreceiptsofitssash,doorand window factory, in accordance with section one hundred eightysix of the National Revenue Code imposing taxes on sale of manufactured articles. Howeverin1952itbegantoclaimliabilityonlytothecontractor's3percenttax (insteadof7percent)undersection191ofthesameCode;andhavingfailedto convincetheBureauofInternalRevenue,itbroughtthemattertotheCourtof TaxAppeals,whereitalsofailed. Issue: Whetherornotpetitioneriscoverunder186ofNRCnationalrevenuecodeor under191ofthesamecode. Ruling: It is at once apparent that the Oriental Sash Factory did not merely sell its services to Don Toribio Teodoro & Co. (To take one instance) because it also sold the materials. The truth of the matter is that it sold materials ordinarily manufacturedbyitsash,panels,mouldingstoTeodoro&Co.,althoughin suchformorcombinationassuitedthefancyofthepurchaser.Suchnewform does not divest the Oriental Sash Factory of its character as manufacturer. Neither does it take the transaction out of the category of sales under Article 1467 above quoted, because although the Factory does not, in the ordinary courseofitsbusiness,manufactureandkeeponstockdoorsofthekindsoldto Teodoro, it could stock and/or probably had in stock the sash, mouldings and panelsitusedtherefor(someofthematleast). In our opinion when this Factory accepts a job that requires the use of extraordinary or additional equipment, or involves services not generally performedbyitittherebycontractsforapieceofworkfilingspecialorders withinthemeaningofArticle1467.Theordershereinexhibitedwerenotshown tobespecial.Theyweremerelyordersforworknothingisshowntocallthem specialrequiringextraordinaryserviceofthefactory. Thethoughtoccurstousthatif,asallegedalltheworkofappellantisonlytofill orders previously made, such orders should not be called special work, but regular work. Would a factory do business performing only special, extraordinaryorpeculiarmerchandise? Anyway, supposing for the moment that the transactions were not sales, they wereneitherleaseofservicesnorcontractjobsbyacontractor.Butasthedoors andwindowshadbeenadmittedly"manufactured"bytheOrientalSashFactory, such transactions could be, and should be taxed as "transfers" thereof under section186oftheNationalRevenueCode. Theappealeddecisionisconsequentlyaffirmed.Soordered.