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133749 AUGUST 23, 2001) Facts: Severino and Henry simulated a deed of sale in order for the latter to file ejectment suit against the leese of the former. And latter in the second deed of sale Severino sold his property to Henry in the amount of Php 2,000,000.00 with understanding the same property would be mortgage to Philam wherein the remaining balance would come from. The latter paid an earnest money of P300,00.00 under the premise that it shall be forfeited in favor of Severino in case of nonpayment. Henry applied for a loan with Philam Life. As It was already approved pending the submission of certain documents such as the owners duplicate of transfer certificate of title which is in possession of Severino. However, when Henry and Severino met with officials of Philam Life to finalize the loan/mortgage contract, Severino refused to surrender the owner's duplicate title and insisted on being paid immediately in cash. As a consequence, the loan/mortgage contract with Philam Life did not materialize. Severino now claims ownership over the property claiming that Henry did not pay for the property, therefore there was no sale to speak of. Issue: whether or not there is a contract of sale perfected in this case? Held: There was a perfected contract of sale due to the second deed of sale. The basic characteristic of an absolutely simulated or fictitious contract is that the apparent contract is not really desired or intended to produce legal effects or alter the juridical situation of the parties in any way. However, in this case, the parties already undertook certain acts which were directed towards fulfillment of their respective covenants under the second deed, indicating that they intended to give effect to their agreement. It is undisputed that the property was placed in the control and possession of Henry when he came into material possession thereof after judgment in the ejectment case. Not only was the contract of sale perfected, but also actual delivery of the property effectively consummated the sale. Non-payment of the purchase price is not among the instances where the law declares a contract to be null and void. Although the law allows rescission as a remedy for breach of contract, the same may not be availed of by respondents in this case. To begin with, it was Severino who prevented full payment of the stipulated price when he refused to deliver the owners original duplicate title to Philam Life. His refusal to cooperate was unjustified, because as Severino himself admitted, he signed the deed precisely to enable petitioner to acquire the loan. It should be emphasized that the non-appearance of the parties before the notary public who notarized the deed does not necessarily nullify nor render the parties transaction void ab initio. Article 135834 of the New Civil Code on the necessity of a public document is only for convenience, not for validity or enforceability.

The petition is GRANTED.

Venancio Bajenting applied for a free patent which was granted over a 10.4

hectare portion of land. His heirs however sold the property to Banez and Alfafara for P 500,000 through an unnotarized deed. P300,000.00 was already paid, the balance of P150,000 shall be paid on or before December 31, 1993. The heirs changed mind and tried to repurchase the property as provided under Commonwealth Act No.141. As substantiated by evidence and testimony of the witnesses, the intention of the Bajenting is to repurchase the property to dispose the same for greater profit, reason for which, the CA ruled against them. Banez and Alfafara then asked the count to order the Bejantings to execute a notarized deed in their favor.

Issue: Whether or not the heirs are entitled to repurchase the property? Issue: Should the heirs be compelled to execute a deed of sale in favour of Banez? 1. NO. While it is true that the offer to repurchase was made within the statutory period both the trial and appellate courts found as a fact that the petitioners did not really intend to derive their livelihood from it but to resell part of it for a handsome profit. It is now settled that homesteaders should not be allowed to take advantage of the salutary policy behind the Public Land Law to enable them to recover the land in question from vendees only to dispose of it again at much greater profit. 2. YES. The Court agree with respondents contention that petitioners are obliged to execute a notarized deed of absolute sale over the property upon payment of the P150,000.00 balance of the purchase price of the property. A contract of sale is a consensual contract. Upon the perfection of the contract, the parties may reciprocally demand performance. The vendee may compel transfer of ownership of the object of the sale, and the vendor may require the vendee to pay the thing sold.

3. G.R. No. 156437. March 1, 2004 NATIONAL HOUSING AUTHORITY vs. GRACEBAPTIST CHURCH and COURT OF APPEALS FACTS: On 1986, Grace Baptist Church (GBC) wrote a letter to NHA manifesting their intent to purchase Lot 4 and 17 of the GMA Resettlement Project in Cavite. NHA granted request hence GBC entered into possession of the lots and introduced improvements thereon. On 1991, NHA passed a resolution approving the sale of the subject lots to respondent Church for 700 per square meter, a total of P430,500. GBC were duly informed. O n 1 9 9 1 , G B C tendered a check amounting to P55,350 contending that this was the agreed price. NHA avers stating that the price now (1991) is different from before (1986).The trial court rendered a decision in favour of NHA stating that there was no contract of s ale, ordering to return the said lots to NHA and to pay N H A r e n t o f 2 0 0 p e s o s f r o m t h e t i m e i t t o o k possession of the lot. GBC appealed to the CA which affirms the decision of RTC reg arding no contract of sale but modifying it by ordering NHA to execute the sale of the said lots to Church for 700 per square, with 6% interest per annum from March1 9 9 1 . P e t i t i o n e r N H A f i l e d a m o t i o n f o r reconsideration which was d e n i e d . H e n c e t h i s petition for review on certiorari

ISSUE: Whether or not the NHA be compelled to sell the subject lots to Grace Baptist Church
in the absence of any perfected contract of sale between the parties?

HELD: N o , b e c a u s e t h e c o n t r a c t h a s n o t b e e n perfected. The offer of the NHA to sell the subject property, as embodied in Resolution No. 2126, was not accepted by the respondent. Thus, the alleged contract involved in this case should be more accurately denominated as inexistent. There being no concurrence of the offer and acceptance, it did not pass the stage of generation to the point of perfection. As such, it is without force and effect from the very beginning or from its incipiency, as if it had never been entered into, and hence, cannot be validated either by lapse of time or ratification. Equity can not give validity to a void contract, and this rule should apply with equal force to inexistent contracts.

4. BUENAVENTURA v CA FACTS: Joaquin spouses sold 6 subdivision lots to some of their 9 children evidenced by corresponding Deeds of Sale. The other children, interested in protecting their inheritance, sought to have the deeds of sale declared null and void for prejudicing their legitimes, lack of consideration, and gross inadequacy of price.

ISSUE: Whether or not the contract of sale is valid? HELD: YES. At the onset, their rights to the legitimes are merely inchoate and vest only upon the death of their parents; thus they have no legal interest thereof. Payment of the price has nothing to do with the perfection of the contract of sale; it was perfected by mere consent. Failure to pay consideration cannot be equated with lack of consideration, which prevents the existence of a valid contract. The former only results in the right to demand payment or rescission. There was already a meeting of the minds as to the price which was reflected in the Deed of Saleand that was sufficient. In fact, evidence suggests that the purchase process have indeed been paid. The sales are thus valid.


San Lorenzo Development Corporation v CA

Spouses Miguel and Pacita Lu (Sps Lu) owned two (2) parcels of lot. Pacita indebted to Babasanta P50,000.00. Pacita and Babasanta agreed to convert the contract of loan into one of sale, selling the properties to Babasanta with P50,000.00 as downpayment. Babasanta had made payments totaling 200k, leaving a balance of 260k, which despite repeated demands, he would not pay. He then asked for a reduction but was denied. He then asked that the contract be reverted back into one of loan, making the Lus indebted to him for 200k. Babasanta demanded the spouses to execute deed of sale. However Spouses Lus, sold the properties to SLDC, who upon knowing of Babasantas claim, immediately registered the deed in the Register of Deeds. ISSUE: Whether or not SLDC has a better right over the subject properties in view of the successive transactions executed by Spouses Luz than and Babasanta? Held: Yes. RULINGS: SLDC has a better right. Article 1544 of the Civil Code applies. It provides, if the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. The principle of primus tempore, potior jure (first in time, stronger in right) gains greater significance in case of double sale of immovable property. When the thing sold twice is an immovable, the one who acquires it and first records it in the Registry of Property, both made in good faith, shall be deemed the owner.

ISSUE: Does SLDC qualify as a buyer in good faith? Yes. It must be stressed that from the execution of the first deed up to the moment of transfer and delivery of possession of the lands to SLDC, it had acted in good faith. The subsequent notice of lis pendens has no effect whatsoever on the consummated sale between SLDC and the Lus. Babasanta argues that the registration of the notice served as constructive notice of their interest in the lands, but again, this registration was made LONG AFTER the sale to SLDC was consummated. Even assuming that this is material, Babasanta still cannot claim a superior right since he already had notice of a previous sale (as evidenced by his letter). He cannot therefore be considered a buyer in good faith either. The law, after all, speaks not only of one criterion. The first is priority of entry in the registry of property; there being none, the second is priority of possession; and in the absence of both, the third is the date of the title. In any event, since SLDC acquired possession of the property in good faith in contrast to Babasanta, who neither registered nor possessed the property at any time, SLDCs right is definitely the superior one.

6. PARAGAS v HEIRS OF DOMINADOR BALACANO FACTS: Dominador Balancano owned 2 parcels of land who was already 81 years old, very weak, could barely talk, and had been battling with liver disease for over a month allegedly on his deathbed, barely a week before he died, signed a Deed of Absolute Sale over the lots in favor of Paragas Spouses in the presence of Atty. De Guzman who proceeded to notarize the same. Accordingly it was a mere confirmation of a previous sale and that Gregorio had already paid P50,000 as deposit. The Paragas driver was also there to take a picture of Gregorio signing said deed with a ballpen in his hand. There was nothing to show that the contents of the deed were explained to Balacano. Paragas then sold a portion of the disputed lot to Catalino. The grandson of Gregorio, Domingo, sought to annul the sale and the partition. There was no sufficient evidence to support any prior agreement or its partial execution. ISSUE: Whether or not the Court of Appeals committed reversible error in upholding the findings and conclusions of the trial court on the nullity of the Deed of Sale purportedly executed between petitioners and the late Gregorio Balacano?

HELD: NO. Ruling : A person is not rendered incompetent merely because of old age; however, when such age has impaired the mental faculties as to prevent a person from protecting his rights, then he is undeniably incapacitated. He is clearly at a disadvantage, and the courts must be vigilant for his protection. In this case, Balacanos consent was clearly absenthence the sale was null and void. The circumstances raise serious doubts on his capacity to render consent. Considering that the Paragas spouses are not owners of the said properties, it only follows that the subsequent sale to Catalinowho was not in good faithis likewise void. Furthermore, the lots pertained to

the conjugal partnershiphaving been inherited by Balacano during his marriage to Lorenza. Thus, it cannot be sold without the latters consent. 7. VDA. DE APE VS. CA (G.R. NO. 133638 APRIL 15, 2005) Generosa Cawit de Lumayno joined by her husband, Braulio, instituted a case for "Specific Performance of a Deed of Sale with Damages" against Fortunato and his wife Perpetua. Allegedly Fortunato Ape an illiterate and co-owner together with their co-heirs of a parcel of land inherited from their parents, signed a receipt of English wording. It can be inferred in the receipt that Fortunato agreed to sell his landholding to Lumayno for an amount of P 5,000.00 by accepting P30.00 as down payment.

ISSUE: Whether or not there was a consent on the part of Fortunato when he signed the receipt of P30 stipulating the transfer of land to Lumayno? Held: NO, his consent was vitiated. Fortunato is illiterate and Lumayno was not able to prove that prior to the signing of the receipt, the contents thereof were fully explained to him. To be valid, consent must meet the following requisites: (a) it should be intelligent, or with an exact notion of the matter to which it refers; (b) it should be free and (c) it should be spontaneous. Intelligence in consent is vitiated by error; freedom by violence, intimidation or undue influence; spontaneity by fraud. The general rule is that he who alleges fraud or mistake in a transaction must substantiate his allegation as the presumption is that a person takes ordinary care for his concerns and that private dealings have been entered into fairly and regularly.56The exception to this rule is provided for under Article 1332 of the Civil Code which provides that [w]hen one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former. In this case, as private respondent is the one seeking to enforce the claimed contract of sale, she bears the burden of proving that the terms of the agreement were fully explained to Fortunato Ape who was an illiterate. This she failed to do. While she claimed in her testimony that the contents of the receipt were made clear to Fortunato, such allegation was debunked by Andres Flores himself when the latter took the witness stand.

G.R. NO. 12012


FACTS: Gloria R. Cruz owner of a parcel of land and Romeo V. Suzara lived together
as husband and wife without benefit of marriage.Out of love and affection for the man, she executed a deed of absolute sale over said Lot in favor of Suzara without any monetary consideration; thereafter, Suzara mortgaged said property up to the point of foreclosure.

Cruz talked to the bank and given two years redemption period. Unknown to Cruz, Suzara sold it to Vizconde who immediately transferred the property in his name. Cruz,

seek to nullify the deed she executed in favor of Suzana and wanted that the property be reconveyed to her from Vizconde

ISSUE: Whether or not can the property be reconveyed to Gloria Cruz after having been purchased and registered under the name of Visconde- a purchaser in good faith. HELD NO: Where innocent third persons, relying on the correctness of the certificate of title thus issued, acquire rights over the property the court cannot disregard such rights and order the total cancellation of the certificate. The effect of such an outright cancellation would be to impair public confidence in the certificate of title, for everyone dealing with property registered under the Torrens system would have to inquire in every instance whether the title has been regularly or irregularly issued. This is contrary to the evident purpose of the law. Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go behind the certificate to determine the condition of the property. Even if a decree in a registration proceeding is infected with nullity, still an innocent purchaser for value relying on a Torrens title issued in pursuance thereof is protected. A purchaser in good faith is one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim of another person.

9. CAOIBES VS. CAOIBES-PANTOJA (GR NO. 162873 JULY 21, 2006) In a Special Proceedings, Jose Caoibes and two sibling entered into an agreement with another sister Corazon. In that agreement it was stipulated that Corazon shall pay the P19, 000.00 loan of Jose et.al secured by a parcel of lot, in favor of one Guillermo Javier. In return, Jose et.al. shall renounce, relinquish and abandon their claim over their landholding in Lot-2 which was still under the subject of a land registration proceeding and absolutely cede, transfer and convey the same in favor of Corazon.

ISSUE: Whether or not there is a contract of sale perfected between the siblings over Lot-2? Held: Yes, in accordance with Articles 1458, 1498 and 1307 of the Civil Code. The agreement of the parties is analogous to a deed of sale in favor of Corazon, it having transferred ownership for and in consideration of her payment of the loan in the principal amount of P19, 000.00 outstanding in the name of one Guillermo C. Javier. The agreement having been made through a public instrument, the execution was equivalent to the delivery of the property to respondent 10. Acap v. CA Facts: Cosme Pido bought a parcel of land from Felixberto, which land is rented by Acap. When Cosme died, his heirs executed a Declaration of Heirship and Waiver of Rights in favor of Edy delos Reyes who subsequently informed Acap of his claim over the land. At first Acap paid the rental to him , however in subsequent years, Acap refused to pay the rental, which prompted respondent to file a complaint for the recovery of possession and damages. Acap averred that he continues to recognize Pido as the owner of the land, and that he will pay the accumulated rentals to Pidos widow upon her return from abroad. The lower court ruled in favor of Edy delos Reyes and affirmed by CA. (2) Whether the said document can be considered a deed of sale in favor of Edy delos Reyes? Held: No. Because there is a marked difference between a sale of hereditary rights and a waiver of hereditary rights. The first presumes the existence of a contract or deed of sale between the parties. The second is, technically speaking, a mode of extinction of ownership where there is an abdication or intentional relinquishment of a known right with knowledge of its existence and intention to relinquish it, in favor of other persons who are co-heirs in the succession. Private respondent, being then a stranger to the succession of Cosme Pido, cannot conclusively claim ownership over the subject lot on the sole basis of the waiver document which neither recites the elements of either a sale, or a donation, or any other derivative mode of acquiring ownership.

Issues: (1) Whether the Declaration of Heirship and Waiver of Rights is a recognized mode of acquiring ownership by Edy delos Reyes? (2) Whether the said document can be considered a deed of sale in favor of Edy delos Reyes? Held:

1. An asserted right or claim to ownership or a real right over a thing arising from a juridical act, however justified, is not per se sufficient to give rise to ownership over the res. That right or title must be completed by fulfilling certain conditions imposed by law. Hence, ownership and real rights are acquired only pursuant to a legal mode or process. While title is the juridical justification, mode is the actual process of acquisition or transfer of ownership over a thing in question. 2. In a Contract of Sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other party to pay a price certain in money or its equivalent. Upon the other hand, a declaration of heirship and waiver of rights operates as a public instrument when filed with the Registry of Deeds whereby the intestate heirs adjudicate and divide the estate left by the decedent among themselves as they see fit. It is in effect an extrajudicial settlement between the heirs under Rule 74 of the Rules of Court. Hence, there is a marked difference between a sale of hereditary rights and a waiver of hereditary rights. The first presumes the existence of a contract or deed of sale between the parties. The second is, technically speaking, a mode of extinction of ownership where there is an abdication or intentional relinquishment of a known right with knowledge of its existence and intention to relinquish it, in favor of other persons who are co-heirs in the succession. Private respondent, being then a stranger to the succession of Cosme Pido, cannot conclusively claim ownership over the subject lot on the sole basis of the waiver document which neither recites the elements of either a sale, or a donation, or any other derivative mode of acquiring ownership. 11. LONDRES V CA LONDRES VS. CA GR. NO. 136427, DEC. 17, 2002 FACTS: Londres- daughter of Filomena sought to nullify the Absolute Sale conveying Lots 1320 and 1333 which was contracted by his mother (Filomena) and Consolacion-mother of Elena on the ground that there is doubt to the validity of the Absolute Sale because it was tampered. The cadastral lot number of the second lot mentioned in the Absolute Sale was altered to read Lot 1333 when it was originally written as Lot 2034. Elena however claimed that the alteration in the Absolute Sale was made by Filomena to make it conform to the description of the lot in the Absolute Sale ISSUE: Whether or not the discrepancies found sufficient to warrant nullification of the deed of sale?


Held: No. Supreme Court reiterated the principle that when one sells or buys real property, one sells or buys the property as he sees it, in its actual setting and by its metes and bounds, and not by the mere lot number assigned to it in the certificate of title. As long as the true intentions of the parties are evident, the mistake will not vitiate the consent of the parties, or affect the validity and binding effect of the contract between them. In such a case, the lot actually taken possession pursuant to the prior agreement of the parties shall be the true subject of the sale, and not the one described in the Deed of Absolute Sale