5. Ong vs.

Ong
FACTS: For an in consideration of P1 and other valuable considerations, Imelda Ong transferred through a
Deed of Quitclaim her rights over a 12 portion of a parcel of land to Sandra. Later on, she revoked the Deed
and donated the whole property to her son, Rex. Sandra, through her guardian, sought to recover ownership
and possession thereof. Imelda alleged that the sale was void for lack of consideration.
ISSUE: W/N there was a valid contract of sale
HELD: YES. There was consideration. Its apparent inadequacy is of no moment since the usual practice in
deeds of conveyance is to place a nominal amount although there is more valuable consideration given.
Consideration is presumed to exist. He who alleges otherwise assumes the burden of proof. The one peso was
not the consideration, but rather the other valuable considerations.
6. BAGNAS v CA
FACTS: Hilario died with no will and was survived only by collateral relatives. Bagnas (et al) were the nearest
kin. Retonil (et al) were also relatives but to a farther extent. They claimed ownership over 10 lots from the
estate of Hilario presenting notarized and registered Deeds of Sale (in Tagalog) where the consideration for the
lands was P1 and services rendered, being rendered, and to be rendered. Bagnas argued that the sales were
fictitious, while Retonil claimed to have done many things for Hilariosuch as nursing him on his deathbed.
ISSUE: W/N there was a valid contract of sale
HELD: NO. At the onset, if a contract has no consideration, it is not merely voidable, but VOIDand even
collateral heirs may assail the contract. In this case, there was no consideration. Price must be in money or its
equivalent; services are not the equivalent of money insofar as the requirement of price is concerned. A
contract is not one for sale if the consideration consists of services. Not only are they vague, they are unknown
and not susceptible of determination without a new agreement between the parties.
7. REPUBLIC v PHIL. RESOURCES DEV. CORP.
FACTS: The Republic brought an action against Apostol for the collection of sums owing to it for his purchase
of Palawan Almaciga and other logs. His total debt amounted to some P34,000. PRDC intervened claiming that
Apostol, as President of the company, without prior authority, took goods (steel sheets, pipes, bars, etc) from
PRDC warehouse and appropriated them to settle his personal debts in favor of the government. The Republic
opposed the intervention of PRDC, arguing that price is always paid in money and that payment in kind is no
payment at all; hence, money and not the goods of PRDC are under dispute.
ISSUE: W/N payment in kind is equivalent to price paid in money
HELD: YES. Price may be paid in money or ITS EQUIVALENTin this case, the goods. Payment need not be
in the form of money. The prices for the goods have, in fact, been assessed and determined. PRDC thus has a
substantial interest in the case and must be permittedto interveneits goods paid out without authority being
under dispute in this case.
8. NAVARRA v PLANTERS DEV. BANK
FACTS: Navarra spouses are the owners of 5 parcels of land in BF Homes, Paranque. In 1982, they obtained a
loan of P1.2M from Planters Bank, secured by a mortgage over these parcels of land. Unfortunately, they
defaulted to pay their obligation and thus, Planters Bank foreclosed the property. They were not able to
redeem the property as well.
On the other hand, RRRC Dev. Corp. is a real estate company owned by the parents of Carmelita Navarra. It
obtained a loan from Planters Bank secured by a submit a board resolution from RRRC authorizing such, the
Bank refused to apply the excess to his repurchase. In 1988, a portion of the lots was sold to Gatchalian Realty.
Navarra spouses filed for specific performance against Planters Bank, alleging that there was a perfected
contract of sale (P1.8M, with P300K downpayment).
RTC ruled in favor of Navarra spouses. CA reversed.
ISSUE: W/N there was a valid contract of sale (consider the repurchase as a sale)
HELD: NO. While the letters indicate the amount of P300K as downpayment, they are completely silent as to
how the succeeding installment payment shall be made. At most, the letters merely acknowledge that the
downpayment was agreed upon by the parties. However,
mortgage over another set of properties of RRRC. Likewise, it defaulted and the properties were foreclosed.
However, RRRC was able to negotiate with the Bank for the redemption of the properties by was of a
concession whereby the Bank allowed RRRC to refer to it would-be buyers of the properties who would remit
their payments directly to the Bank, which would then be considered as redemption price for RRRC.
Eventually, these were sold and payments made directly to the Bank were in excess by P300K for the
redemption price.
In the meantime, Jorge Navarra requested that they repurchase their house and lot for P300K, which the Bank
agreed. Accordingly, Jorge Navarra requested further that the excess payment of RRRC be applied as down
payment for their repurchase. For his failure to
this fact cannot lead to the conclusion that a contract of sale had been perfected. Before a valid and binding
contract of sale can exist, the manner of payment of the purchase price must first be established since the
agreement on the manner of the payment goes into the price such that a disagreement on the manner of
payment is tantamount to a failure to agree on the price.
Moreover, the letter/offer failed to specify a definite amount of the purchase price for the sale/repurchase of
the properties. It merely stated that it will be based on the redemption value plus accrued interest at the
prevailing rate up to the date of the sales contract.
Clearly, the lack of a definite offer on the part of the Navarra spouses could not possibly serve as the basis of
their claim that the sale was perfected.
FORMATION OF CONTRACT OF SALE
1. MANILA METAL CONTAINER CORP. v PNB
FACTS: Manila Metal was the owner of a parcel of land in Mnadaluyong. To secure a P900K loan it obtained
from PNB, Manila Metal executed a real estate mortgage over the lot. PNB later granted Manila Metal a new
credit accommodation of P1M. Manila Metal secured another loan of P653K from PNB.
In 1982, PNB sought to have the property foreclosed and sold at a public auction. PNB was the highest bidder.
Manila Metal requested an extension of time to redeem the property and to repurchase such on installment.
The Special Assets Management Department (SAMD) prepared a statement of account and as of 1984, Manila
Metal's obligation amounted to P1.6M, which includes the bid price, interests, advances of insurance
premiums, advances on realty taxes, etc. When apprised of the statement of account, Manila Metal remitted
P725K to PNB as deposit to repurchase.
In the meantime, SAMD recommended that Manila Metal be allowed to repurchase for P1.6M. PNB, however,
rejected the recommendation and offered the property at P2.66M, its minimum market value. Manila Metal
refused and reiterated that it already acceded to SAMD's offer, to which it remitted P725K.
In 1985, PNB accepted the offer but for P1.9M less the P725K deposit. Manila Metal, again, rejected this offer
and filed a complaint against PNB for the annulment of foreclosure or specific performance, contending that
there was a valid contract of sale between Manila Metal and SAMD.
In 1993, while the case was pending, Manila Metal offered to repurchase at P3.5M, but PNB rejected because
the market value of the property was at P30M. Manila Metal offered again at P4.25M but was rejected again.
ISSUE: W/N there was a valid contract of sale
HELD: NO. There was no perfected contract of sale between PNB and Manila Metal because there was no
agreement as to the price certain. The Statement of Account prepared by SAMD cannot be classified as a
counter-offer. It is simply a recital of its total monetary claims against Manila Metal. The amount stated therein
could not be considered as a counter-offer since it was only a recommendation subject to PNB's Board of
Directors' approval. Neither can the receipt of P725K by SAMD be regarded as evidence of a perfected contract
of sale. The amount is merely an acknowledgment of the receipt of P725K as deposit to repurchase the
property. It was accepted by respondent on the condition that the purchase price will still be approved by the
Board of Directors. Pending such approval, Manila Metal cannot legally claim that PNB is already bound by
any contract of sale with it.
2. CARCELLER v CA
FACTS: Carceller leased 2 parcels of land owned by State Investment Houses (SIHI), the period being 18
months at P10,000/month rent. Under the lease, SIHI guaranteed Carceller the exclusive right and option to
purchase the said lots within the lease period for the aggregate amount of P1.8M. Around 3 weeks before the
end of the lease period, SIHI informed Carceller of the impending termination of the lease and the short period
left for him to purchase. He begged for an extension, but SIHI refused. Nevertheless, SIHI offered the property
to him for lease for another year, but this time, it also offered it for sale to the public. Carceller thus sued SIHI
for specific performance to compel SIHI to execute a Deed of Sale in his favor.
ISSUE: W/N Carceller may still exercise the option to purchase the property
HELD: YES. Even if Carceller failed to purchase the property within the said period, still equity must
intervene. He had introduced substantial improvements thereon; to rule against him would cause damage to
himand SIHI does not stand to gain much therefrom. SIHI clearly intended to sell the lot to him considering
that it was under financial distress, that is constantly reminded him of the option and the impending deadline.
The delay of 18 days is not substantial. Carcellers letter to SIHI expressing his intent to purchase the lot is fair
notice of intent to exercise the option despite the request for extension. Carceller should thus be allowed to buy
the lots.
3. TAYAG v LACSON
FACTS: Angelica Lacson and her children were registered owners of agricultural lands. Tiamzon and others
were their farmer-tenants. The tenants executed a Deed of Assignment in favor of Tayagassigning to the
latter their rights to purchase the lands as tenant-tillers of the landholdings possessed by them at P50.00 per
sqm. This was subject to the conditions that (1) Lacson, the landowner, would agree to sell the same parels and
(2) that there are no more legal impediments to the assignment. Tayag invited the tenants to a meeting to
discuss the agreement, but the latter did not attend and wrote Tayag that they have decided to sell their rights
to the Lacsons instead because he allegedly betrayed their trust by filing a certain lawsuit. Tayag thus filed a
Complaint before the RTC asking that the court fix the period for the payment; he also asked for a Writ of
Preliminary Injunction against Lacson and the tenants to enjoin them from accepting any offers for sale made
by the tenants.
ISSUE: W/N the assignment was in the form of an option contract
HELD: NO. The Deeds of Assignment were not option contracts, which may be enforced by Tayag. Not being
the legal owners of the property, the tenants had no right to confer upon Tayag the option, more so, the
exclusive right to buy the property.
4. VILLAMOR v CA
FACTS: The Villamors purchased from Macaria 12 of the latters land for a price considerably higher than the
prevailing market price. They then executed a Deed of Option stating that the only reason why the Villamors
agreed to purchase the said lot is because Macaria agreed to confer upon them the exclusive right to purchase
the other half of the land. Such sale under the deed may be imposed whenever the need for the sale arises on
the part of either party. Macaria sought to repurchase the land, but the Villamors refused. Instead, the
Villamors exercised their option to purchase the other half of the property. Macaria refused, thus the Villamors
filed a case for specific performance. Macaria averred that the option is void for lack of consideration.
ISSUE: W/N the option contract is void for lack of consideration
HELD: NO. The Option Contract is supported by a considerationthat being the difference of the agreed price
and the market price of the other half of the land, which was sold to the Villamors. Thus, it is valid and may be
enforced by the Villamors. The consideration may consist of anything of value.
The option was, in fact, the only reason why they purchased the other half for an expensive price. Since the
Villamors exercised their option, this is tantamount to an acceptance of the offera valid and obligatory
contract of sale was thus perfected.
5. SANCHEZ v RIGOS
FACTS: Sanchez and Rigos executed an Option to Purchase where Rigos agreed, promised, and committed to
sell to Sanchez a parcel of land in Nueva Ecija for P1,510. In spite of the repeated tenders made by Sanchez,
Rigos refused to sell the same. Thus, Sanchez consigned the amounts and filed a case for specific performance.
Rigos alleged that the contract between them was a unilateral promise to sell, which is not supported by any
consideration, hence, it is not binding.
ISSUE: W/N there was a valid option contract
HELD: NO. The promisee (Sanchez) cannot compel the promissor (Rigos) to comply with the promise unless
the former can establish that the promise was for a consideration. The burden of proof to establish the
existence of the consideration lies with Sanchez. Therefore, there was no valid option contract in this case.
However, an option without consideration is a mere offer, which is not binding until accepted. But from the
moment it is accepted before it is withdrawn, a valid contract of sale arises. In this case, even though there was
no option contract, there was nevertheless an offer and acceptance enough to constitute a valid contract of sale.
6. VASQUEZ v CA
FACTS: The Vallejera spouses sought to recover from Vasquez an agricultural lot, which they previously sold
to him. Along with the previous execution of a Deed of Sale, the parties also executed a Right of Repurchase
allowing Vallejera to repurchase the said estate. Vasquez resisted the redemption arguing that the option to
buy was not supported by any considerationand thus not binding upon him.
ISSUE: W/N there was a valid option contract
HELD: NO. It is apparent that the Right to Repurchase was not supported by any consideration. Thus, in order
for the doctrine under Sanchez v Rigos to apply, giving rise to a valid contract of sale, it must be shown that
the promissee (Vallejera) accepted the right of repurchase before it was withdrawn by Vasquez. In this case, no
such acceptance was made. The vendor a retro (Vallejera) must make actual and simultaneous tender of
payment and consignation. Mere expressions of readiness and willingness to repurchase are insufficient. Their
ineffectual acceptance allowed Vasquez to withdraw the offer through his refusal to sell the lot. Vasquez thus
cannot be compelled to sell the lot.
7. NIETES v CA
FACTS: Nietes leased from Dr. Garcia the Angeles Educational Institute; the contract contained an Option to
Buy the land and school buildings within the period of the lease. It also stipulated that the unused payment
will be applied to the purchase price of the school. Nietes paid Garcia certain sums in excess of the rent, which
Garcia acknowledged as forming partial payment of the purchase price of the property. Later on, Garcia,
through counsel, wrote Nietes informing him of his decision to rescind the contract due to certain violations of
the contractsuch as poor maintenance, lack of inventory of school equipment, and the use of another name
for the said school. Nietes replied by informing Garcia that he decided to exercise his Option to Buy, but
Garcia refused to sell. Nietes thereafter deposited the balance of the price to Agro-Industrial Bank, but he later
withdrew the said amounts. CA ruled in favor of Garcia stating that the full purchase price must be paid
before the Option to Buy may be exercised. Thus, Nietes brought the matter to the SC.
ISSUE: W/N actual payment is needed before one may exercise the option to buy
HELD: NO. There is nothing in the contract that required Nietes to pay the full price before he could exercise
the option. It was sufficient that he informed Garcia of his choice and that he was at that time ready to pay.
Theexercise of the option need not be coupled with actual payment so long as such payment is made upon the
fulfillment of the owners undertaking to deliver the property. This is based on the principle that such option
contracts involve reciprocal obligationsand one does not incur delay if the other party fails or refuses to
comply with his respective obligation. That being the case, there was no need for Nietes to deposit the said
amountsand his withdrawal thereof does not affect his right.
8. ANG YU ASUNCION v CA
FACTS: The Unijeng spouses owned certain residential and commercial spaces leased by Ang Yu. They offered
to sell the said units to Ang Yu on several occasions and for P6M. Ang Yu made a counter offer for P5M. The
Unijeng spouses asked Ang Yu to specify his terms in writing but the latter failed to do so. They failed to
arrive at any definite agreement. When Ang Yu discovered that the spouses were planning to sell the property
to others, he sued them for specific performance. While the case was pending, the spouses sold the units to
Buen Realty for P15M.
ISSUE: W/N there was a perfected contract of sale between Unijeng and Ang Yu
HELD: NO. There was no perfected contract of sale yet since there was yet any meeting of the minds. Thus,
there is no ground for specific performance. During the negotiation stage, any party may withdraw the offer
madeespecially if it was not supported by any consideration.
An Option Contract of a Right of First Refusal is separate and distinct from the actual contract of sale which
is the basis for specific performance. The remedy available to Any Yu, in case the withdrawal was made
capriciously and arbitrarily, would be to sue on the basis of abuse of right. In case there was an option
contract, timely acceptance would create an obligation to sell on the part of the vendor; but no such
circumstance attends in this case.
9. EQUATORIAL REALTY DEV. INC. v MAYFAIR THEATER INC.
FACTS: For its theaters, Mayfair was leasing a portion of the property in CM Recto, which Carmelo owns.
Under the lease agreement, if Carmelo should decide to sell the leased premises, Mayfair shall be given 30
days exclusive option to purchase the same. Carmelo, through Henry Yang, informed the president of
Mayfair that the former is interested in selling the whole CM Recto propertyand that Araneta offered to
purchase the same for $1.2M. Mayfair twice replied through a letter of its intention to exercise its right to
repurchasebut Carmelo never replied. Thereafter , Carmelo sold the entire property to Equatorial Realty for
some P11M. Thus, Mayfair instituted an action for specific performance and annulment of the sale.
Carmelo alleges that the right, being an option contract, is void for lack of consideration.
ISSUE: W/N the right to repurchase is an option contract and void for lack of consideration
HELD: NO. The clause in the lease agreement was NOT an option contract, but a RIGHT OF FIRST REFUSAL.
It was premised on Carmelos decision to sell the said property. It also did not contain a stipulation as to the
price of said property. The requirement of separate consideration does not apply to a right of 1
st
refusal
because consideration is already an integral part of the lease. Carmelo violated such right by not affording
Mayfair a fair chance to negotiate. It abandoned the negotiations arbitrarily.
Equatorial was likewise in bad faith; it was well aware of the right conferred upon Mayfair because its lawyers
had ample time to review the contract. That being the case, the contract between Carmelo and Equatorial is
rescissible. Mayfair should be allowed to purchase the entire property for the price offered by Equatorial.
Rights of First Refusal are also governed by the law on contracts, not the amorphous principles on human
relations.
10. PARANAQUE KINGS ENTERPRISES INC v CA
FACTS: Catalina owned 8 parcels of land leased to Chua, who assigned its rights thereto to Lee Ching Bing,
who, in turn, assigned said rights to Paranaque King Enterprises, which introduced significant improvements
on the premises. Under the lease agreement, in case of sale, the lessee shall have the option or priority to buy
the said properties. Catalina, in violation of the said stipulation, sold the lot to Raymundo for P5M.
Paranaque King notified her of the said breach, and she immediately had the lots reconveyed. She then offered
the lot to Paranaque King for P15M; but the latter refused claiming that the offer was ridiculous. Catalina
thereafter sold it again to Raymundo for P9M.
ISSUE: W/N there was compliance with the Right of First Refusal assigned to Paranaque King
HELD: NO. In a Right of First Refusal, the seller cannot offer the property to another for a lower price or under
terms more favorable. It must be offered under the same terms & conditions to Paranaque King; otherwise, the
right of first refusal becomes illusory. Only if Paranaque King fails to meet the offer may the property be
offered for sale to another buyerand under the same terms and conditions as well. The Right of First Refusal
may also be validly transferred or assignedas in this case.
11. VASQUEZ v AYALA CORP.
FACTS: In 1984, Ayala Corp. entered into a Memorandum of Agreement with Dr. Vasquez buying the latters
shares with Conduit Developmentwhich constitute some 50 hectares of the land in Ayala Alabang. Under
the MOA, Ayala was to undertake the development of the lands except the retained area. Under Par. 5.15 of
the MOA, Ayala agreed to give Vasquez a first option to purchase the 4 adjacent lots to the retained area at
the prevailing market price at the time of the purchase. A case was filed by one of the former sub-contractors
of Conduit against Ayala causing a 6-year delay in the development of the project. Now, Vasquez comes
forward invoking Par. 5.15 claiming that it was a valid option contract, and that Ayala should sell to him the
said property at the 1984 prevailing price. Ayala offered to sell the said properties to Vasquez at the prevailing
prices (1990); but the latter refused to accept. Ayala discounted the price from P6,500/sqm to P5,000/sqm, but
still, Vasquez refused.
ISSUE: W/N there was a valid option contract given to Vasquez
HELD: NO. Par. 5.15 was NOT an option contract, but a RIGHT OF FIRST REFUSAL. It was predicated upon
Ayalas decision to sell the said properties. The price was also not specified. It was also not supported by any
independent consideration. By twice refusing to accept Ayalas offers, Vasquez lost his right to repurchase.
Ayala did not breach its obligation.
12. RIVERA FILIPINA INC v CA
FACTS: In 1982, Reyes executed a 10-year (renewable) Contract of Lease with Riivera Filipina over a parcel of
land in EDSA. Under such contract, the lessee is given a right of first refusal should the lessor decide to sell the
property during the terms of the lease.
Such property was subject of a mortgage executed by Reyes in favor of Prudential Bank. Since Reyes failed to
pay the loan with the bank, it foreclosed the mortgage and it emerged as the highest bidder in the auction sale.
Realizing that he could not redeem the property, Reyes decided to sell it and offered it to Riviera Filipina for
P5,000/sqm. However , it bargained for P3,500/sqm. Reyes rejected such offer. After 7 months, it again
bargained for P4,000/sqm, which again was rejected by Reyes who asked for P6,000/sqm price. After 2
months, it again bargained for P5,000/sqm, but since Reyes insisted on P6,000/sqm price, he rejected Riviera's
offer .
Nearing the expiry of the redemption period, Reyes and Traballo (his friend) agreed that the latter would buy
the same for P5,300. But such deal was not yet formally concluded and negotiations with Riviera Filipina once
again transpired but to no avail.
In 1989, Cypress and Cornhill Trading were able to come up with the amount sufficient to cover the
redemption money, with which Reyes paid to Prudential Bank to redeem the property. Subsequently, a Deed
of Absolute Sale was executed in favor of Cypress and Cornhill for P5.4M. Cypress and Cornhill mortgaged
the property in favor of Urban Dev. Bank for P3M.
Riviera Filipina filed a suit against Reyes, Cypress and Cornhill on the ground that they violated its right of
first refusal under the lease contract. RTC ruled in favor of Reyes, Cypress, and Cornhill. On appeal, CA
affirmed the decision of the RTC.
ISSUE: W/N Riviera Filipina lost its right of first refusal
HELD: YES. As clearly shown by the records and transcripts of the case, the actions of the parties to the
contract of lease, Reyes and Riviera, shaped their understanding and interpretation of the lease provision
"right of first refusal" to mean simply that should the lessor Reyes decide to sell the leased property during the
term of the lease, such sale should first be offered to the lessee Riviera. And that is what exactly ensued
between Reyes and Riviera, a series of negotiations on the price per square meter of the subject property with
neither party, especially Riviera, unwilling to budge from his offer, as evidenced by the exchange of letters
between the two contenders.
It can clearly be discerned from Rivieras letters that Riviera was so intractable in its position and took obvious
advantage of the knowledge of the time element in its negotiations with Reyes as the redemption period of the
subject foreclosed property drew near. Riviera strongly exhibited a "take-it or leave- it" attitude in its
negotiations with Reyes. It quoted its "fixed and final" price as Five Thousand Pesos (P5,000.00) and not any
peso more. It voiced out that it had other properties to consider so Reyes should decide and make known its
decision "within fifteen days." Riviera even downgraded its offer when Reyes offered anew the property to it,
such that whatever amount Reyes initially receives from Riviera would absolutely be insufficient to pay off the
redemption price of the subject property. Naturally, Reyes had to disagree with Rivieras highly
disadvantageous offer.
Nary a howl of protest or shout of defiance spewed forth from Rivieras lips, as it were, but a seemingly
whimper of acceptance when the counsel of Reyes strongly expressed in a letter dated December 5, 1989 that
Riviera had lost its right of first refusal. Riviera cannot now be heard that had it been informed of the offer of
Five Thousand Three Hundred Pesos (P5,300.00) of Cypress and Cornhill it would have matched said price. Its
stubborn approach in its negotiations with Reyes showed crystal-clear that there was never any need to
disclose such information and doing so would be just a futile effort on the part of Reyes. Reyes was under no
obligation to disclose the same. Pursuant to Article 1339 of the New Civil Code, silence or concealment, by
itself, does not constitute fraud, unless there is a special duty to disclose certain facts, or unless according to
good faith and the usages of commerce the communication should be made. The general rule is applicable in
the case at bar since Riviera failed to convincingly show that either of the exceptions are relevant to the case at
bar.
13. MACION v GUIANI
FACTS: Macion and Dela Vida Institute entered into a contract to sell, where the latter assured the former that
it will buy the 2 parcels of land in Cotabato City on or before July 31, 1991 at P1.75M. In the meantime, Dela
Vida took possession of it and promptly built an edifice worth P800,000. However, on the said date, the sale
did not materialize. Consequently, Macion filed a complaint for unlawful detainer against Dela Vida, while
Dela Vida countered with a complaint for reformation of the contract to sell. These differences were eventually
settled.
In 1992, both parties entered into a compromise agreement where Macion will give Dela Vida 5 months to
raise P2.06M and in case of failure to do so, Dela Vida would vacate the premises. After 2 months, Dela Vida
alleged that they had negotiated a loan from BPI and requested Macion to execute the contract to sell in its
favor . However , Macion refused, which prompted Dela Vida to file an urgent motion for an order to direct
Macion to execute the contract to sell. In return, Macion filed a motion for execution of judgment alleging that
after 5 months, Dela Vida was not able to settle their obligations with Macion. RTC ruled in favor of Dela Vida.
ISSUE: W/N it was proper to execute a contract to sell in favor of Dela Vida
HELD: YES. Although the compromise agreement (par. 7) does NOT give Dela Vida the right to demand from
Macion the execution of the contract to sell in its favor. From this paragraph, it is clear that Macion is obliged
to execute a Deed of Sale and not a Contract to Sell upon payment of the full price of P2.06M. Thereafter,
Macion will turn over to Dela Vida the TCT.
HOWEVER, a review of the facts reveals that even prior to the signing of the compromise agreement, both
parties had entered into a contract to sell, which was superseded by a compromise agreement. This
compromise agreement must be interpreted as bestowing upon Dela Vida the power to demand a contract to
sell from Macion. Where Macion promised to execute a deed of absolute sale upon completing payment of the
price, it is a contract to sell. In the case at bar, the sale is still in the executory stage since the passing of title is
subject to a suspensive condition--that if Dela Vida is able to secure the needed funds to purchase the
properties from Macion. A mere executory sale, one where the sellers merely promise to transfer the property
at some future date, or where some conditions have to be fulfilled before the contract is converted from an
executory to an executed one, does not pass ownership over the real estate being sold. It cannot be denied that
the compromise agreement, having been signed by both parties, is tantamount to a bilateral promise to buy
and sell a certain thing for a price certain. Hence, this gives the contracting parties rights in personam, such that
each has the right to demand from the other the fulfillment of their respective undertakings. Demandability
may be exercised at any time after the execution of the Deed.
14. VILLONCO v BORMAHECO
FACTS: Cervantes and his wife owned 3 parcels of land along Buendia where he buildings of Bormaheco Inc
were situated. Beside their property were lots owned by Villonco Realty. Cervantes entered into several
negotiations with Villonco for sale of the Buendia property. Cervantes made a written offer of P400/sqm with
a downpayment of P100,000 to serve as earnest money. The offer also made the consummation of the sale
dependent upon the acquisition by Bormaheco of a Sta. Ana property. Villonco made a counter-offer stating
that the earnest money was to earn 10% interest p.a. The check was enclosed with the reply letter. Cervantes
accepted and cashed the check. The Sta. Ana Property was awarded to Bormaheco; the transfer was also duly
approved. However, Cervantes sent the check back to Villonco with the interest thereonstating that he was
no longer interested in selling the property. He also claims that no contract was perfected; Villonco sues for
specific performance.
ISSUE: W/N there was a perfected contract of sale
HELD: YES. There was a perfected contract of sale. The alleged changes made in the counter-offer are
immaterial and are mere clarifications. The changes of the words Sta. Ana property to another property as
well as the insertion of the number 12 in the date, and the words per annum in the interest are trivial.
There is no incompatibility in the offer and counter- offer. Cervantes assented to the interest and he, in fact,
paid the same. Also, earnest money constitutes prood of the perfection of the contract of sale and forms part of
the consideration. The condition regarding the acquisition of the Sta. Ana property was likewise fulfilled; there
is thus no ground for the refusal of Cervantes to consummate the sale.
15. OESMER v PARAISO DEV CORP.
FACTS: Oesmers are co-owners of undivided shares of 2 parcels of agricultural and tenanted land in Cavite,
which are unregistered and originally owned by their parents. When their parents died, they acquired the lots
as heirs by right of succession.
In 1989, Paular, a resident and former Mun. Sec. of Carmona Cavite, brought Ernesto Oesmer (one of the heirs)
to meet with Lee, President of Paraiso Development Corp, in Manila for the purpose of brokering the sale of
Ernesto's properties to Paraiso Dev. Corp. A contract to sell was entered into between Paraiso Dev. Corp and
Ernesto as well as Enriqueta. A check in the amount of P100,000 payable to Ernesto was given as option
money. Eventually, Rizalino, Leonora, Bibiano Jr, and Librado also signed the Contract to Sell. However, 2 of
their brothers, Adolfo and Jesus, refused to sign the document.
A couple of months after, the Oesmers informed Paraiso (through a letter) that it is rescinding the Contract to
Sell and returning the option money. However, Paraiso did not respond and thus, Oesmers filed a complaint
for declaration of nullity of the Contract to Sell with the RTC, which ruled in favor of Paraiso Dev. Corp. On
appeal, CA modified by declaring that the Contract to Sell is valid and binding as to the undivided shares of
the six signatories of the document.
ISSUE: W/N the Contract to Sell is valid as to all
signatories
HELD: NO. It is true that the signatures of the 5 siblings did not confer authority on Ernesto as agent to sell
their respective shares in the properties, because such authority to sell an immovable is required to be in
writing. However, those signatures signify their act of directly (not through an agent) selling their personal
shares to Paraiso Dev. Corp.
In the case at bar, the Contract to Sell was perfected when the petitioners consented to the sale to the
respondent of their shares in the subject parcels of land by affixing their signatures on the said contract. Such
signatures show their acceptance of what has been stipulated in the Contract to Sell and such acceptance was
made known to respondent corporation when the duplicate copy of the Contract to Sell was returned to the
latter bearing petitioners signatures.
As to petitioner Enriquetas claim that she merely signed as a witness to the said contract, the contract itself
does not say so. There was no single indication in the said contract that she signed the same merely as a
witness. The fact that her signature appears on the right-hand margin of the Contract to Sell is insignificant.
The contract indisputably referred to the Heirs of Bibiano and Encarnacion Oesmer, and since there is no
showing that Enriqueta signed the document in some other capacity, it can be safely assumed that she did so
as one of the parties to the sale.
In the instant case, the consideration of P100,000.00 paid by respondent to petitioners was referred to as
option money. However, a careful examination of the words used in the contract indicates that the money is
not option money but earnest money. Earnest money and option money are not the same but
distinguished thus: (a) earnest money is part of the purchase price, while option money is the money given as
a distinct consideration for an option contract; (b) earnest money is given only where there is already a sale,
while option money applies to a sale not yet perfected; and, (c) when earnest money is given, the buyer is
bound to pay the balance, while when the would-be buyer gives option money, he is not required to buy, but
may even forfeit it depending on the terms of the option.
16. FULE v CA
FACTS: Fule, a banker and a jeweler, acquired a 10- hectare property in Rizal (Tanay Property), which used to
be under the name of Fr. Antonio Jacobe, who mortgaged it to Rural Bank of Alaminos to secure a loan of
P10,000. However, the mortgage was foreclosed.
In 1984, Fule asked Dichoso and Mendoza to look for a buyer of the Tanay property. They found one in the
person of Cruz, who owns a pair of diamond earrings. Fule was interested to buy these earrings, but Cruz
refused to sell them to him for the price he offered. Subsequently, negotiations for the barter between the
earrings and the property ensued. But it turned out that the redemption period for the property has not yet
expired. Thus, Fule executed a deed of redemption on behalf of Fr. Jacobe in the amount of P16,000, and on
even date, Fr. Jacobe sold the property to Fule for P75,000. The Deed of Sale was notarized ahead of the Deed
of Redemption.
Subsequently, a Deed of Sale over the earrings was executed and when it was delivered, Fule contends that the
earrings were fake, even using a tester to prove such allegation. Thereafter, they decided to Dimayuga, a
jeweler, to have the earrings tested. After a glance, Dimayuga declared them fake.
Fule filed a complaint with the RTC against Cruz and her lawyer, Belarmino, praying that the contract of sale
over the Tanay property be declared null and void on the ground of fraud and deceit. RTC ruled in favor of
Cruz and Belarmino.
ISSUE: W/N the Deed of Sale over the Tanay Property is valid
HELD: YES. It is evident from the facts of the case that there was a meeting of the minds between petitioner
and Dr. Cruz. As such, they are bound by the contract unless there are reasons or circumstances that warrant
its nullification. The records, however, are bare of any evidence manifesting that private respondents
employed such insidious words or machinations to entice petitioner into entering the contract of barter.
Neither is there any evidence showing that Dr. Cruz induced petitioner to sell his Tanay property or that she
cajoled him to take the earrings in exchange for said property. On the contrary, Dr. Cruz did not initially
accede to petitioner's proposal to buy the said jewelry. Rather, it appears that it was petitioner, through his
agents, who led Dr. Cruz to believe that the Tanay property was worth exchanging for her jewelry as he
represented that its value was P400,000.00 or more than double that of the jewelry which was valued only at
P160,000.00. If indeed petitioner's property was truly worth that much, it was certainly contrary to the nature
of a businessman- banker like him to have parted with his real estate for half its price. In short, it was in fact
petitioner who resorted to machinations to convince Dr. Cruz to exchange her jewelry for the Tanay property.
Furthermore, petitioner was afforded the reasonable opportunity required in Article 1584 of the Civil Code
within which to examine the jewelry as he in fact accepted them when asked by Dr. Cruz if he was satisfied
with the same. By taking the jewelry outside the bank, petitioner executed an act which was more consistent
with his exercise of ownership over it. This gains credence when it is borne in mind that he himself had earlier
delivered the Tanay property to Dr. Cruz by affixing his signature to the contract of sale. That after two hours
he later claimed that the jewelry was not the one he intended in exchange for his Tanay property, could not
sever the juridical tie that now bound him and Dr. Cruz. The nature and value of the thing he had taken
preclude its return after that supervening period within which anything could have happened, not excluding
the alteration of the jewelry or its being switched with an inferior kind.
17. DAILON v CA
FACTS: Sabesaje sues to recover ownership of a parcel of land based on a private document of absolute sale
executed by Dailon. Dailon denies the fact of the sale alleging that the same being embodied in a private
instrument, the same cannot convey title under Art. 1358 of the Civil Code which requires that contracts which
have for their object the creation, transmission, modification, or extinction of real rights over immovable
property must appear in a public instrument.
ISSUE: W/N there was a valid/perfected contract of sale
HELD: YES. The necessity of a public instrument is only for conveniencenot for validity and enforceability.
Such is not a requirement for the validity of a contract of sale, which is perfected by mere consent. Dailon
should thus be compelled to execute the corresponding deed of conveyance in a public instrument in favor of
Sabesaje. If the sale is made through a public instrument, it amounts to constructive delivery.
18. SECUYA v VDA DE SELMA
FACTS: Caballero owned certain friar lands. She entered into an Agreement of Partition where she parted with
1/3 of the said property in favor of Sabellona. Sabellona took possession thereof and sold a portion to
Dalmacio Secuya through a private instrument that is already lost. Secuya, along with his many relatives took
possession of the said land. Later on, Selma bought a portion of the said land, including that occupied by
Secuya; she bought it from Caesaria Caballero. She presented a Deed of Absolute Sale and a TCT. Secuya filed
a case for quieting of title. CA upheld Selmas title considering that she had a TCT and a Deed of Sale.
ISSUE: Who has a better right, Secuya or Selma?
HELD: The Secuyas have nothing to support their supposed ownership over the parcel of land. The best
evidence they could have had was the private instrument indicating the sale to their predecessor-in- interest.
But the instrument is lost. Even so, it is only binding as between the parties and cannot prejudice 3
rd
persons
since it is not embodied in the public document. Selma, on the other hand, has all the supporting documents
necessary; she also acted in good faith and thought that the Secuyas were merely tenants. They did not even
pay realty taxes and did not have their claim annotated to the certificate of sale.
19. YUVIENGCO v DACUYCUY
FACTS: Yuvienco entered into a contract with Yao King Ong and the other occupants, wherein the former will
sell to the latter the Sotto property in Tacloban City for P6.5M provided that the latter made known their
decision to buy it or not later than July 31, 1978. When Yuvienco's representative went to Cebu with a prepared
and duly signed contract for the purpose of perfecting and consummating the transaction, Yao King Ong and
other occupants found variance between the terms of payment stipulated in the document and what they had
in mind. Thus, it was returned unsigned. Thus, the action for specific performance.
ISSUE: W/N the claim for specific performance of Yao King Ong is enforceable under the Statute of Frauds
HELD: YES. It is nowhere alleged in the complaint that there is any writing or memorandum, much less a duly
signed agreement to the effect, that the price of P6,500,000 fixed by petitioners for the real property herein
involved was agreed to be paid not in cash but in installments as alleged by Yao King Ong. The only
documented indication of the non-wholly-cash payment extant in the record is the deeds already signed by
Yuvienco and taken to Tacloban by Atty. Gamboa for the signatures of the respondents. In other words, the 90-
day term for the balance of P4.5 M insisted upon by respondents choices not appear in any note, writing or
memorandum signed by either the petitioners or any of them, not even by Atty. Gamboa. Hence, looking at
the pose of respondents that there was a perfected agreement of purchase and sale between them and
petitioners under which they would pay in installments of P2 M down and P4.5 M within ninety 90) days
afterwards it is evident that such oral contract involving the "sale of real property" comes squarely under the
Statute of Frauds (Article 1403, No. 2(e), Civil Code.)
In any sale of real property on installments, the Statute of Frauds read together with the perfection
requirements of Article 1475 of the Civil Code must be understood and applied in the sense that the idea of
payment on installments must be in the requisite of a note or memorandum therein contemplated. While such
note or memorandum need not be in one single document or writing and it can be in just sufficiently implicit
tenor, imperatively the separate notes must, when put together', contain all the requisites of a perfected
contract of sale. T o put it the other way , under the Statute of Frauds, the contents of the note or
memorandum, whether in one writing or in separate ones merely indicative for an adequate understanding of
all the essential elements of the entire agreement, may be said to be the contract itself, except as to the form.
20. LIMKETKAI SONS MILLING INC v CA
FACTS: In 1976, Philippine Remnants Co., Inc. constituted the Bank of the Philippine Islands (BPI) as its
trustee to manage, administer, and sell its real estate property, one of which was the disputed lot in Pasig. In
1988, Pedro Revilla, Jr., a licensed real estate broker, was given formal authority by BPI to sell the lot for
P1,000/sqm. Broker Revilla contacted Alfonso Lim of Limketkai Sons Milling (LSM) who agreed to buy the
land. LSM asked that the price of P1,000/sqm. be reduced to P900.00 while Albano stated the price is to be
P1,100.00. The parties finally agreed that the lot would be sold at P1,000/sqm. to be paid in cash.
Notwithstanding the final agreement to pay P1,000/sqm. on a cash basis, Alfonso Lim (LSM official) asked if it
was possible to pay on terms. The bank officials stated that there was no harm in trying to ask for payment on
terms because in previous transactions, the same had been allowed. It was the understanding, however, that
should the term payment be disapproved, then the price shall be paid in cash. It was Albano who dictated the
terms under which the installment payment may be approved, and acting thereon, Alfonso Lim wrote BPI
through Merlin Albano embodying the payment initially of 10% and the remaining 90% within a period of 90
days. 2 or 3 days later, LSM learned that its offer to pay on terms had been frozen. Alfonso Lim went to BPI
and tendered the full payment of P33,056,000.00 to Albano. The payment was refused because Albano stated
that the authority to sell that particular piece of property in Pasig had been withdrawn from his unit. The same
check was tendered to BPI Vice-President Nelson Bona who also refused to receive payment.
LSM filed an action for specific performance with damages against BPI. In the course of the trial, BPI informed
the trial court that it had sold the property under litigation to National Book Store (NBS) in 1989. The
complaint was thus amended to include NBS. RTC ruled in favor of LSM, holding that there was a perfected
contract of sale between LSM and BPI. CA reversed, holding that no contract of sale was perfected because
there was no concurrence of the three requisites enumerated in Article 1318 of the Civil Code.
ISSUE: W/N there was a valid contract of sale
HELD: YES. There was a meeting of the minds between the buyer and the bank in respect to the price of
P1,000/sqm. The requirements in the payment of the purchase price on terms instead of cash were suggested
by BPI Vice-President Albano. Since the authority given to broker Revilla specified cash payment, the
possibility of paying on terms was referred to the Trust Committee but with the mutual agreement that if the
proposed payment on terms will not be approved by our Trust Committee, Limketkai should pay in cash, the
amount was no longer subject to the approval or disapproval of the Committee, it is only on the terms. The
record shows that if payment was in cash, either broker Revilla or Aromin had full authority. But because LSM
took advantage of the suggestion of Vice-President Albano, the matter was sent to higher officials.
Immediately upon learning that payment on terms was frozen and/or denied, Limketkai exercised his right
within the period given to him and tendered payment in full, thus complying with their agreement.
The negotiation or preparation stage started with the authority given by Philippine Remnants to BPI to sell the
lot, followed by the authority given by BPI and confirmed by Philippine Remnants to broker Revilla to sell the
property, the offer to sell to Limketkai, the inspection of the property and the negotiations with Aromin and
Albano at the BPI offices. The perfection of the contract took place when Aromin and Albano, acting for BPI,
agreed to sell and Alfonso Lim with Albino Limketkai, acting for LSM, agreed to buy the disputed lot at
P1,000/sqm. Aside from this there was the earlier agreement between LSM and the authorized broker. There
was a concurrence of offer and acceptance, on the object, and on the cause thereof.
21. ORTEGA v LEONARDO
FACTS: Ortega occupied a parcel of land. After the liberation, the government assigned the lot to the Rural
Progress Admin. She asserted her right thereto; but was disputed by Leonardo. Ortega and Leonardo agreed
to a compromise. The agreement was for Ortega to desist from pressing her claim, and Leonardo, upon getting
the lot, would sell to her a portion thereof provided she paid for the surveying of the lot. If he acquired title,
she could stay as tenant. Ortega thus desisted from her claim, paid for the surveying of the lot and the
preparation of the plan, and regularly paid him a monthly rental. When she remodeled her sons house beside
the lot, it extended over the subject lot. When Leonardo acquired title, he refused to sell the portion agreed
upon. He claims that the contract is unenforceable based on the Statute of Frauds.
ISSUE: W/N the contract is unenforceable
HELD: NO. The contract is enforceable because there was partial performance. Ortega made substantial
improvements on the lot, desisted from her claim, continued possession, and paid for the surveying, and also
paid the rentals. All these put together amount to
23. ALFREDO v BORRAS
FACTS: Godofredo & Carmen mortgaged their land to DBP for P7,000. To pay their debt, they sold the land to
Armando & Adelia for P15,000. The latter also assumed to pay the loan. Carmen issued Armando & Adelia a
receipt for the sale. They also delivered to Armando & Adelia the Original Certificate of Title, tax declarations,
and tax receipts. They also introduced Armando & Adelia to the Natanawans, the tenants of the said property
as the new lessors. They thereafter took possession of the said land. Later, they found out that Godofredo &
Carmen sold the land again to other buyers by securing duplicate copies of the OCTs upon petition with the
court. Thus, they filed for specific performance. Godofredo & Carmen claimed that the sale, not being in
writing, is unenforceable under the Statute of Frauds.
ISSUE: W/N the contract of sale is unenforceable under the Statute of Frauds.
HELD: NO. The Statute of Frauds is applicable only to executory contracts, not those that have already been
partially or completely consummated. In this case, the sale of the land to Armando & Adelia had already been
consummated. The ownership of the land was also transferred to Armando & Adelia when they were
introduced to the Natanawans and took possession thereof. Therefore, when Godofredo & Carmen sold the
land to other buyers, it was no longer theirs to sell.
partial performance, which takes the verbal agreement out of the operation of the Statute of Frauds.
22. CLAUDEL v CA
FACTS: Cecilio Claudel acquired a lot from the Bureau of Lands. He occupied the same, declared it in his
name and dutifully paid his taxes. After his death, his heirs and siblings contested each other claiming
ownership thereof. It was his heirs who were in possession of the property. They partitioned it amongst
themselves, registered each portion under the Torrens System, and each paid their respective taxes. The
siblings filed a case for cancellation of titles and reconveyance arguing that there was a verbal sale between
Cecilio and their parents over the lot. As evidence, they presented a subdivision plan. CA ordered the
cancellation of the TCT s in favor of the heirs.
ISSUE: W/N there was a valid sale between Cecilio and his siblings
HELD: NO. As a rule, a sale of land is valid regardless of the form it may have been entered into. However, in
the event that a 3
rd
party disputes the ownership, there is no such proof in support of the ownership. As such,
it cannot prejudice 3
rd
personssuch as the heirs in this case. Also, the heirs had a right to rely upon their
Torrens titles, which, as opposed to the subdivision plans, are definitely more credible.
Further, the subsequent buyers were in bad faith because Armando & Adelia registered their adverse claim
this amounts to constructive notice, which negates good faith.
The Statute of Frauds likewise does not apply considering that Godofredo & Carmen had already derived the
benefits from the salesuch as the money to pay for the loan. The receipt also suffices to constitute the
memorandum required by the Statute of Frauds. Assuming that the sale was voidable because it was conjugal
property, the same was ratified by Godofredo by introducing Armando & Adelia to the Natanawans as the
new lessors. Also, even though titled as Specific Performance, the complaint was one for reconveyance and
prescription does not lie of one who is in actual possession of the property.
23. TOYOTA SHAW INC v CA
FACTS: Luna Sosa wanted to buy a Toyota Lite Ace. He went to Toyota Shaw where he met Popong Bernardo,
a sales rep. Sosa explained that he needed the Lite Ace by June 17, otherwise, he would become a laughing
stock. Bernardo guaranteed that the vehicle would be delivered. They executed a document entitled
Agreements between Sosa & Popong Bernardo of Toyota Shaw where a P100K downpayment was stipulated
and that the Lite Ace would be available at a given date. When the day of reckoning arrived, the Lite Ace was
unavailablethe explanation of Bernardo being nasulot ng ibang malakas. However , according to T oyota,
the true reason was that BA Finance, which was supposed to answer for the balance of the purchase price, did
not approve Sosas application. Toyota also returned the downpayment. Thus, Sosa sued for damages
amounting to P1.2M due to his humiliation, hurt feelings, sleepless nights, and so on.
ISSUE: W/N there was a perfected contract of sale
HELD: NO. Toyota Shaw should NOT be held liable for damages because there was no perfected contract of
sale in the first place. There was no agreement as to the price and the manner of paymentwhich are both
essential to the perfection of the sale. It was also clear that Bernardo signed the document in his personal
capacity and it was up to Sosa to inquire as to the extent of the formers capacity. Sosa did not even sign it. It
was nothing but a mere proposal, which did not mature into a perfected contract of sale in lieu of the
subsequent events. In fact, it made no specific reference to the sale of a vehicle. No obligations could thus arise
therefrom. Sosa has no one else to blame but himself for his humiliation for bragging about something he has
done yet.