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G.R. No. 164587, February 04, 2008
Rockland Construction Company, Inc. in a letter dated March 1, 2000, offered to lease from MidPasig Land Development Corporation the latters 3.1-hectare property in Pasig City. This property is
covered by Transfer Certificate of Title Nos. 469702 and 337158 under the control of the Presidential
Commission on Good Government. Upon instruction of Mid-Pasig to address the offer to the PCGG,
Rockland wrote the PCGG on April 15, 2000. The letter, addressed to PCGG Chairman Magdangal
Elma, included Rockland proposed terms and conditions for the lease. This letter was also received by
Mid-Pasig on April 18, 2000, but Mid-Pasig made no response.
Again, in another letter dated June 8, 2000 addressed to the Chairman of Mid-Pasig, Mr. Ronaldo
Salonga, Rockland sent a Metropolitan Bank and Trust Company Check No. 2930050168 for P1 million
as a sign of its good faith and readiness to enter into the lease agreement under the certain terms and
conditions stipulated in the letter. Mid-Pasig received this letter on July 28, 2000.
In a subsequent follow-up letter dated February 2, 2001, Rockland then said that it presumed that
Mid-Pasig had accepted its offer because the P1 million check it issued had been credited to Mid-Pasigs
account on December 5, 2000.
Mid-Pasig, however, denied it accepted Rocklands offer and claimed that no check was attached
to the said letter. It also vehemently denied receiving the P1 million check, much less depositing it in its
In its letter dated February 6, 2001, Mid-Pasig replied to Rockland that it was only upon receipt
of the latters February 2 letter that the former came to know where the check came from and what it
was for. Nevertheless, it categorically informed Rockland that it could not entertain the latters lease
application. Mid-Pasig reiterated its refusal of Rocklands offer in a letter dated February 13, 2001.
Rockland then filed an action for specific performance. Rockland sought to compel Mid-Pasig to
execute in Rocklands favor, a contract of lease over a 3.1-hectare portion of Mid-Pasigs property in
Pasig City.
The RTCs decision:
1. the plaintiff and the defendant have duly agreed upon a valid and enforceable lease agreement of
subject portions of defendants properties comprising an area of 5,000 square meters, 11,000
square meters and 15,000 square meters, or a total of 31,000 square meters;
2. the principal terms and conditions of the aforesaid lease agreement are as stated in plaintiffs
June 8, 2000 letter;
3. defendant to execute a written lease contract in favor of the plaintiff containing the principal
terms and conditions mentioned in the next-preceding paragraph, within sixty (60) days from
finality of this judgment, and likewise ordering the plaintiff to pay rent to the defendant as
specified in said terms and conditions;
4. defendant to keep and maintain the plaintiff in the peaceful possession and enjoyment of the
leased premises during the term of said contract;
5. defendant to pay plaintiff attorneys fees in the sum of One Million Pesos (P1,000,000.00), plus
P2,000.00 for every appearance made by counsel in court;
6. The temporary restraining order dated April 2, 2001 is made PERMANENT;
7. Dismissed defendants counterclaim.
The Court of Appeals reversed the trial courts decision.
1. Was there a perfected contract of lease?
2. Had estoppel in pais set in?

1. A close review of the events in this case, in the light of the parties evidence, shows that there was no
perfected contract of lease between the parties. Mid-Pasig was not aware that Rockland deposited the P1
million check in its account. It only learned of Rocklands check when it received Rocklands February
2, 2001 letter. Mid-Pasig, upon investigation, also learned that the check was deposited at the Philippine
National Bank San Juan Branch, instead of PNB Ortigas Branch where Mid-Pasig maintains its
account. Immediately, Mid-Pasig wrote Rockland on February 6, 2001 rejecting the offer, and proposed
that Rockland apply the P1 million to its other existing lease instead. These circumstances clearly show
that there was no concurrence of Rocklands offer and Mid-Pasigs acceptance.
2. Mid-Pasig is also not in estoppel in pais. The doctrine of estoppel is based on the grounds of public
policy, fair dealing, good faith and justice, and its purpose is to forbid one to speak against his own act,
representations, or commitments to the injury of one to whom they were directed and who reasonably
relied thereon. Since estoppel is based on equity and justice, it is essential that before a person can be
barred from asserting a fact contrary to his act or conduct, it must be shown that such act or conduct has
been intended and would unjustly cause harm to those who are misled if the principle were not applied
against him.
Hence, the petition was denied



G.R. No. 166862 December 20, 2006
Petitioner was the owner of a 8,015 square meter parcel of land and to secure a P900,000.00 loan
it had obtained from respondent PNB, petitioner executed a real estate mortgage over the lot.
Respondent PNB later granted petitioner a new credit accommodation of P1,000,000.00; and, on
November 16, 1973, petitioner executed an Amendment of Real Estate Mortgage over its property. On
March 31, 1981, petitioner secured another loan of P653,000.00 from respondent PNB, payable in
quarterly installments of P32,650.00, plus interests and other charges.
PNB filed a petition for extrajudicial foreclosure of the real estate mortgage and sought to have
the property sold at public auction for P911,532.21, petitioner's outstanding obligation to respondent
PNB as of June 30, 1982, plus interests and attorney's fees. After due notice and publication, the property
was sold at public auction where respondent PNB was declared the winning bidder for P1,000,000.00.
The period to redeem the property was to expire on February 17, 1984. Petitioner sent a letter dated
August 25, 1983 to respondent PNB, requesting that it be granted an extension of time to
redeem/repurchase the property. Respondent PNB informed petitioner that the request had been referred
to its Pasay City Branch for appropriate action and recommendation
Petitioner reiterated its request for a one year extension from February 17, 1984 within which to
redeem/repurchase the property on installment basis. It reiterated its request to repurchase the property
on installment. Meanwhile, some PNB Pasay City Branch personnel informed petitioner that as a matter
of policy, the bank does not accept "partial redemption.
Since petitioner failed to redeem the property, the Register of Deeds cancelled TCT No. 32098
and issued a new title in favor of respondent PNB. Petitioner's offers had not yet been acted upon by
respondent PNB.
Meanwhile, the Special Assets Management Department (SAMD) had prepared a statement of
account, and as of June 25, 1984 petitioner's obligation amounted to P1,574,560.47. This included the
bid price of P1,056,924.50, interest, advances of insurance premiums, advances on realty taxes,
registration expenses, miscellaneous expenses and publication cost. When apprised of the statement of
account, petitioner remitted P725,000.00 to respondent PNB as "deposit to repurchase," and an Official
Receipt was issued. The SAMD recommended to the management of respondent PNB that petitioner be
allowed to repurchase the property for P1,574,560.00. In a letter dated November 14, 1984, the PNB
management informed petitioner that it was rejecting the offer and the recommendation of the SAMD. It
was suggested that petitioner purchase the property for P2,660,000.00, its minimum market value.
Respondent PNB gave petitioner until December 15, 1984 to act on the proposal; otherwise, its
P725,000.00 deposit would be returned and the property would be sold to other interested buyers.
Petitioner, however, did not agree to respondent PNB's proposal. Instead, it wrote another letter
dated December 12, 1984 requesting for a reconsideration. Respondent PNB replied in a letter dated
December 28, 1984, wherein it reiterated its proposal that petitioner purchase the property for
P2,660,000.00. PNB again informed petitioner that it would return the deposit should petitioner desire to
withdraw its offer to purchase the property. On February 25, 1985, petitioner, through counsel, requested
that PNB reconsider its letter dated December 28, 1984. Petitioner declared that it had already agreed to
the SAMD's offer to purchase the property for P1,574,560.47, and that was why it had paid
P725,000.00. Petitioner warned respondent PNB that it would seek judicial recourse should PNB insist
on the position.
On June 4, 1985, respondent PNB informed petitioner that the PNB Board of Directors had
accepted petitioner's offer to purchase the property, but for P1,931,389.53 in cash less the P725,000.00
already deposited with it. Petitioner did not respond, so PNB requested petitioner in a letter dated June
30, 1988 to submit an amended offer to repurchase. Petitioner rejected respondent's proposal in a letter
dated July 14, 1988. It maintained that respondent PNB had agreed to sell the property for
P1,574,560.47, and that since its P725,000.00 downpayment had been accepted, respondent PNB was
proscribed from increasing the purchase price of the property. Petitioner averred that it had a net balance
payable in the amount of P643,452.34. Respondent PNB, however, rejected petitioner's offer to pay the
balance of P643,452.34 in a letter dated August 1, 1989.

Petitioner filed a complaint against respondent PNB for "Annulment of Mortgage and Mortgage
Foreclosure, Delivery of Title, or Specific Performance with Damages. Respondent PNB averred, as a
special and affirmative defense, that it had acquired ownership over the property after the period to
redeem had elapsed. It claimed that no contract of sale was perfected between it and petitioner after the
period to redeem the property had expired. The trial court rendered judgment dismissing the amended
complaint and respondent PNB's counterclaim. It ordered respondent PNB to refund the P725,000.00
deposit petitioner had made. The trial court ruled that there was no perfected contract of sale between the
parties; hence, petitioner had no cause of action for specific performance against respondent. The Court
of Appeals affirmed the RTCs decision.
Whether or not petitioner and respondent PNB had entered into a perfected contract for petitioner
to repurchase the property from respondent.
The ruling of the appellate court that there was no perfected contract of sale between the parties
is correct.
It appears that although respondent requested petitioner to conform to its amended counter-offer,
petitioner refused and instead requested respondent to reconsider its amended counter-offer. Petitioner's
request was ultimately rejected and respondent offered to refund its P725,000.00 deposit. In sum, then,
there was no perfected contract of sale between petitioner and respondent over the subject property.

385 SCRA 244
Respondents Ignacia Reynes and spouses Abucay filed on June 20, 1984 a complaint for
Declaration of Nullity and Quieting of Title against petitioner Rico Montecillo. Reynes asserted that she
is the owner of a lot situated in Mabolo, Cebu City. In 1981 Reynes sold 185 square meters of the
Mabolo Lot to the Abucay Spouses who built a residential house on the lot they bought.
Reynes alleged further that she signed a Deed of Sale of the Mabolo Lot in favor of Montecillo.
Reynes, being illiterate signed by affixing her thumb-mark on the document. Montecillo promised to
pay the agreed P47,000.00 purchase price within one month from the signing of the Deed of Sale. And
that Montecillo failed to pay the purchase price after the lapse of the one-month period, prompting
Reynes to demand from Montecillo the return of the Deed of Sale. Since Montecillo refused to return
the Deed of Sale, Reynes executed a document unilaterally revoking the sale and gave a copy of the
document to Montecillo.
Subsequently, on May 23, 1984 Reynes signed a Deed of Sale transferring to the Abucay
Spouses the entire Mabolo Lot, at the same time confirming the previous sale in 1981 of a 185 square
meter portion of the lot.
Reynes and the Abucay Spouses alleged that they received information that the Register of
Deeds of Cebu City issued a Certificate of Title in the name of Montecillo for the Mabolo Lot. They
argued that for lack for consideration there (was no meeting of the minds) between Reynes and
Montecillo. Thus, the trial court should declare null and void ab initio Monticellos Deed of sale, and
order the cancellation of certificates of title No. 90805 in the name of Montecillo.
In his Answer, Montecillo a bank executive claimed he was a buyer in good faith and had
actually paid the P47,000.00 consideration stated on his Deed of Sale. Montecillo however admitted he
still owned Reynes a balance of P10,000.00. He also alleged that he paid P50,000.00 for the release of
the chattel mortgage which he argued constituted a lien on the Mabolo Lot. He further alleged that he
paid for the real property tax as well as the capital gains tax on the sale of the Mabolo Lot.
In their reply, Reynes and the Abucay Spouses contended that Montecillo did not have authority
to discharge the chattel mortgage especially after Reynes revoked Montecillos Deed of Sale and gave
the mortgagee a copy of the document of revocation. Reynes and the Abucay Spouses claimed that
Montecillo secured the release of the chattel mortgage through machination. They further asserted that
Montecillo took advantage of the real property taxes paid by the Abucay Spouses and surreptitiously
caused the transfer of the title to the Mabolo Lot in his name.
During pre-trial Montecillo claimed that the consideration for the sale of the Mabolo Lot was the
amount he paid to Cebu Iced and Cold Storage Corporation for the mortgage debt of Bienvenido Jayag.
Montecillo argued that the release of the mortgage was necessary since the mortgage constituted a lien
on the Mabolo Lot.
Reynes, however stated that she had nothing to do with Jayags mortgage debt except that the
house mortgaged by Jayag stood on a portion of the Mabolo Lot. Reynes further stated that the payment
by Montecillo to release the mortgage on Jayags house is a matter between Montecillo and Jayag. The
mortgage on the house being a chattel mortgage could not be interpreted in any way as an encumbrance
on the Mabolo Lot. Reynes further claimed that the mortgage debt had long prescribed since the
P47,000.00 mortgage debt was due for payment on January 30,1967.

Whether or not there was a valid consent in the case at bar to have a valid contract.
One of the three essential requisites of a valid contract is consent of the parties on the object and
cause of the contract. In a contract of sale, the parities must agree not only on the price, but also on the
manner of payment of the price. An agreement on the price but a disagreement on the manner of its
payment will not result in consent, thus preventing the existence of a valid contract for a lack of consent.
This lack of consent is separate and distinct for lack of consideration where the contract states that the
price has been paid when in fact it has never been paid.
Reynes expected Montecillo to pay him directly the P47, 000.00 purchase price within one
month after the signing of the Deed of Sale. On the other hand, Montecillo thought that his agreement
with Reynes required him to pay the P47,000.00-purchase price to Cebu Ice Storage to settle Jayags
mortgage debt. Montecillo also acknowledged a balance of P10, 000.00 in favor of Reynes although this
amount is not stated in Montecillos Deed of Sale. Thus, there was no consent or meeting of the minds,
between Reynes and Montecillo on the manner of payment. This prevented the existence of a valid
contract because of lack of consent.
In summary, Montecillos Deed of Sale is null and void ab initio not only for lack of
consideration, but also for lack of consent. The cancellation of TCT No. 90805 in the name of
Montecillo is in order as there was no valid contract transferring ownership of the Mabolo Lot from
Reynes to Montecillo.

G.R. No. 123892 May 2, 2001

Petitioner is a professional interior designer. In November 1986, her friend Rosario Pardo asked
her to talk to Nida Lopez, who was manager of the COMBANK Ermita Branch for they were planning
to renovate the branch offices. Even prior to November 1986, petitioner and Nida Lopez knew each
other because of Rosario Pardo, the latters sister. During their meeting, petitioner was hesitant to accept
the job because of her many out of town commitments, and also considering that Ms. Lopez was asking
that the designs be submitted by December 1986, which was such a short notice. Ms. Lopez insisted,
however, because she really wanted petitioner to do the design for renovation. Petitioner acceded to the
request. Ms. Lopez assured her that she would be compensated for her services. Petitioner even told Ms.
Lopez that her professional fee was P10,000.00, to which Ms. Lopez acceded.
During the November 1986 meeting between petitioner and Ms. Lopez, there were discussions as
to what was to be renovated. Ms. Lopez again assured petitioner that the bank would pay her fees. After
a few days, petitioner requested for the blueprint of the building so that the proper design, plans and
specifications could be given to Ms. Lopez in time for the board meeting in December 1986. Petitioner
then asked her draftsman Jackie Barcelon to go to the jobsite to make the proper measurements using the
blue print. Petitioner also did her research on the designs and individual drawings of what the bank
wanted. Petitioner hired Engineer Ortanez to make the electrical layout, architects Frison Cruz and De
Mesa to do the drafting. For the services rendered by these individuals, petitioner paid their professional
fees. Petitioner also contacted the suppliers of the wallpaper and the sash makers for their quotation. So
come December 1986, the lay out and the design were submitted to Ms. Lopez. She even told petitioner
that she liked the designs.
Subsequently, petitioner repeatedly demanded payment for her services but Ms. Lopez just
ignored the demands. In February 1987, by chance petitioner and Ms. Lopez saw each other in a concert
at the Cultural Center of the Philippines. Petitioner inquired about the payment for her services, Ms.
Lopez curtly replied that she was not entitled to it because her designs did not conform to the banks
policy of having a standard design, and that there was no agreement between her and the bank.
Petitioner, through her lawyers, who wrote Ms. Lopez, demanding payment for her professional
fees in the amount of P10,000.00 which Ms. Lopez ignored. The lawyers wrote Ms. Lopez once again
demanding the return of the blueprint copies petitioner submitted which Ms. Lopez refused to return.
The petitioner then filed at the trial court a complaint against COMBANK and Ms. Lopez for collection
of professional fees and damages.
In its answer, COMBANK stated that there was no contract between COMBANK and petitioner;
that Ms. Lopez merely invited petitioner to participate in a bid for the renovation of the COMBANK
Ermita Branch; that any proposal was still subject to the approval of the COMBANKs head office.
The trial court rendered judgment in favor of plaintiff. On appeal, the Court of Appeals reversed
the decision. Hence, this petition.
Whether or not the Court of Appeals erred in ruling that there was no contract between petitioner
and respondents, in the absence of the element of consent.

A contract is a meeting of the minds between two persons whereby one binds himself to give
something or to render some service to bind himself to give something to render some service to another
for consideration. There is no contract unless the following requisites concur: 1. Consent of the
contracting parties; 2. Object certain which is the subject matter of the contract; and 3. Cause of the
obligation which is established.
In the case at bar, there was a perfected oral contract. When Ms. Lopez and petitioner met in
November 1986, and discussed the details of the work, the first stage of the contract commenced. When
they agreed to the payment of the P10,000.00 as professional fees of petitioner and that she should give
the designs before the December 1986 board meeting of the bank, the second stage of the contract
proceeded, and when finally petitioner gave the designs to Ms. Lopez, the contract was consummated.
Petitioner believed that once she submitted the designs she would be paid her professional fees. Ms.
Lopez assured petitioner that she would be paid.
It is familiar doctrine that if a corporation knowingly permits one of its officers, or any other
agent, to act within the scope of an apparent authority, it holds him out to the public as possessing the
power to do those acts; and thus, the corporation will, as against anyone who has in good faith dealt with
it through such agent, be estopped from denying the agents authority.
Also, petitioner may be paid on the basis of quantum meruit. "It is essential for the proper
operation of the principle that there is an acceptance of the benefits by one sought to be charged for the
services rendered under circumstances as reasonably to notify him that the lawyer performing the task
was expecting to be paid compensation therefor. The doctrine of quantum meruit is a device to prevent
undue enrichment based on the equitable postulate that it is unjust for a person to retain benefit without
paying for it."
The designs petitioner submitted to Ms. Lopez were not returned. Ms. Lopez, an officer of the
bank as branch manager used such designs for presentation to the board of the bank. Thus, the designs
were in fact useful to Ms. Lopez for she did not appear to the board without any designs at the time of
the deadline set by the board.
Decision reversed and set aside. Decision of the trial court affirmed.

381 SCRA 681 MAY 7, 2002
Petitioner Yolanda Palattao entered into a lease contract whereby she leased to private respondent
a house and a 490-square-meter lot located in 101 Caimito Road, Caloocan City, covered by a Transfer
Certificate of Title and registered in the name of petitioner. The duration of the lease contract was for
three years, commencing from January 1, 1991, to December 31, 1993, renewable at the option of the
parties. The agreed monthly rental was P7,500.00 for the first year; P 8,000.00 for the second year: and
P8,500.l00 for the third year. The contract gave respondent lessee the first option to purchase the leased
During the last year of the contract, the parties began negotiations for the sale of the leased
premises to private respondent. In a letter, petitioner offered to sell to private respondents 413.28 square
meters of the leased lot at P 7,800.00 per square meter, or for the total amount of P3,223,548.00. Private
respondents replied on April 15, 1993 wherein he informed petitioner that he shall definitely exercise
his option to buy the leased property. Private respondent, however, manifested his desire to buy the
whole 490-square meters inquired from petitioner the reason why only 413.28 square meters of the
leased lot were being offered for sale. In a letter dated November 6, 1993, petitioner made a final offer
to sell the lot at P7,500.00 per square meter with a down payment of 50% upon the signing of the
contract of conditional sale, the balance payable in one year with a monthly lease/interest payment P
14,000.00 which must be paid on or before the fifth day every month that the balance is still outstanding.
Private respondents accepted petitioners offer and reiterated his request for respondent accepted
petitioners offers and reiterated his request for clarification as to the size of the lot for sale. Petitioner
acknowledged private respondents acceptance of the offer in his letter dated November 10, 1993.
Petitioner gave private respondent on or before November 24, 1993, within which to pay the
50% downpayment in cash or managers check. Petitioner stressed that failure to pay the downpayment
on the stipulated period will enable petitioner to freely sell her property to others. Petitioner likewise
notified private respondent, that she is no longer renewing the lease agreement upon its expiration on
December 31, 1993.
Private respondent did not accept the terms proposed by petitioner. Neither were there any
documents of sale nor payment by private respondent of the required downpayment. Private respondent
wrote a letter to petitioner on November 29, 1993 manifesting his intention to exercise his option to
renew their lease contract for another three years, starting January 1, 1994 to December 31, 1996. This
was rejected by petitioner, reiterating that she was no longer renewing the lease. Petitioner demanded
that private respondent vacate the premises, but the latter refused.
Hence, private respondent filed with the Regional Trial Court a case for specified performance
seeking to compel petitioner to sell to him the leased property. Private respondent further prayed for the
issuance of a writ preliminary injunction to prevent petitioner from filing an ejectment case upon the
expiration of the lease contract on December 31, 1993.
During the proceedings in the specific performance case, the parties agreed to maintain the status
quo. After they failed to reach an amicable settlement, petitioner filed the instant ejectment case before
the Metropolitan Trial Court. In his answer, private respondent alleged that he refused to vacate the
leased premises because there was a perfected contract of sale of the leased property between him and
petitioner. Private respondent argued that he did not abandon his option to buy the leased property and
that his proposal to renew the lease was but an alternative proposal to the sale. He further contended that
the filing of the ejectment case violated their agreement to maintain the status quo.
Whether or not there was a valid consent in the case at bar.

There was no valid consent in the case at bar.
Contracts that are consensual in nature, like a contract of sale, are perfected upon mere meeting
of the minds. Once there is concurrence between the offer and the acceptance upon the subject matter,
consideration, and terns of payment, a contract is produced. The offer must be certain. To convert the
offer into a contract, the acceptance must be absolute and must not qualify the terms of the offer; it must
be plain, unequivocal, unconditional, and without variance of any sort from the proposal. A qualified
acceptance, or one that involves a new proposal, constitutes a counter-offer and is a rejection of the
original offer. Consequently, when something is desired which is not exactly is proposed in the offer,
such acceptance is not sufficient to generate consent because any modification or variation from the
terms of the offer annuals the offer.
In the case at bar, while it is true that private respondent informed petitioner that he is accepting
the latters offer to sell the leased property, it appears that they did not reach an agreement as to the
extent of the lot subject of the proposed sale.
Letters reveal that private respondent did not give his consent to buy only 413.28 square meters
of the leased lot, as he desired to purchase the whole 490 square-meter- leased premises which, however,
was not what was exactly proposed in petitioners offer. Clearly, therefore, private respondents
acceptance of petitioners offer was not absolute, and will consequently not generate consent that would
perfect a contract.

301 SCRA 573
G.R. No. 128690 January 21, 1999
In 1990, ABS-CBN and VIVA executed a Film Exhibition Agreement whereby Viva gave ABSCBN an exclusive right to exhibit some Viva films. Viva, through defendant Del Rosario, offered ABSCBN, through its vice-president Charo Santos-Concio, a list of three film packages (36 title) from which
ABS-CBN may exercise its right of first refusal under the afore-said agreement. ABS-CBN, however
through Mrs. Concio, "can tick off only ten titles" (from the list) "we can purchase" and therefore did not
accept said list. The titles ticked off by Mrs. Concio are not the subject of the case at bar except the film
"Maging Sino Ka Man."
On February 27, 1992, defendant Del Rosario approached ABS-CBNs Ms. Concio, with a list
consisting of 52 original movie titles (i.e., not yet aired on television) including the 14 titles subject of
the present case, as well as 104 re-runs (previously aired on television) from which ABS-CBN may
choose another 52 titles, as a total of 156 titles, proposing to sell to ABS-CBN airing rights over this
package of 52 originals and 52 re-runs for P60,000,000.00 of which P30,000,000.00 will be in cash and
P30,000,000.00 worth of television spots.
On April 2, 1992, defendant Del Rosario and ABS-CBNs general manager, Eugenio Lopez III
discussed the package proposal of VIVA. Mr. Lopez testified that he and Mr. Del Rosario allegedly
agreed that ABS-CBN was granted exclusive film rights to fourteen (14) films for a total consideration
of P36 million; that he allegedly put this agreement as to the price and number of films in a "napkin" and
signed it and gave it to Mr. Del Rosario. On the other hand, Del Rosario denied having made any
agreement with Lopez regarding the 14 Viva films; denied the existence of a napkin in which Lopez
wrote something; and insisted that what he and Lopez discussed at the lunch meeting was Vivas film
package offer of 104 films (52 originals and 52 re-runs) for a total price of P60 million.
Del Rosario and Mr. Graciano Gozon of RBS Senior vice-president for Finance discussed the
terms and conditions of Vivas offer to sell the 104 films, after the rejection of the same package by
ABS-CBN. On the following day, Del Rosario received a draft contract from Ms. Concio which contains
a counter-proposal of ABS-CBN on the offer made by VIVA including the right of first refusal to 1992
Viva Films. However, the proposal was rejected by the Board of Directors of VIVA and such was
relayed to Ms. Concio.
On April 29, 1992, after the rejection of ABS-CBN and following several negotiations and
meetings defendant Del Rosario and Vivas President Teresita Cruz, in consideration of P60 million,
signed a letter of agreement dated April 24, 1992, granting RBS the exclusive right to air 104 Vivaproduced and/or acquired films including the fourteen films subject of the present case.
On 27 May 1992, ABS-CBN filed before the RTC a complaint for specific performance with a
prayer for a writ of preliminary injunction and/or temporary restraining order against private
respondents Republic Broadcasting System (now GMA Network Inc.) On 28 May 1992, the RTC issued
a temporary restraining order.
The RTC then rendered decision in favor of RBS and against ABS-CBN. On appeal, the same
decision was affirmed. Hence, this decision.
Whether or not there exists a perfected contract between ABS-CBN and VIVA.
A contract is a meeting of minds between two persons whereby one binds himself to give
something or render some service to another [Art. 1305, Civil Code.] for a consideration. There is no
contract unless the following requisites concur:


consent of the contracting parties;

object certain which is the subject of the contract; and
cause of the obligation, which is established. [Art. 1318, Civil Code.]
A contract undergoes three stages:
preparation, conception, or generation, which is the period of negotiation and bargaining
rending at the moment of agreement of the parties;
perfection or birth of the contract, which is the moment when the parties come to agree
on the terms of the contract; and
consummation or death, which is the fulfillment or performance of the terms agreed upon
in the contract.

In the present case, when Mr. Del Rosario of Viva met Mr. Lopez of ABS-CBN on 2 April 1992
to discuss the package of films, said package of 104 VIVA films was VIVAs offer to ABS-CBN to enter
into a new Film Exhibition Agreement. But ABS-CBN, sent through Ms. Concio, counter-proposal in
the form a draft contract proposing exhibition of 53 films for a consideration of P35 million. This
counter-proposal could be nothing less than the counter-offer of Mr. Lopez during his conference with
Del Rosario at Tamarind Grill Restaurant. Clearly, there was no acceptance of VIVAs offer, for it was
met by a counter-offer which substantially varied the terms of the offer.
Furthermore, ABS-CBN made no acceptance of VIVAs offer hence, they underwent period of
bargaining. ABS-CBN then formalized its counter-proposals or counter-offer in a draft contract. VIVA
through its Board of Directors, rejected such counter-offer. Even if it be conceded arguendo that Del
Rosario had accepted the counter-offer, the acceptance did not bind VIVA, as there was no proof
whatsoever that Del Rosario had the specific authority to do so.
The instant petition was GRANTED.

357 SCRA 209
G. R. No. 135929 April 20, 2001
In July 1978, respondent spouses Lorenzo de Vera and Asuncion Santos-de Vera, through their
agent Marcosa Sanchez, offered to sell to petitioner Lourdes Ong Limson a parcel of land. The
respondent spouses were the owners of the subject property.
On July 31, 1978, she agreed to but the property at the price of P34. 00 per square meter and
gave P20, 000.00 as earnest money. The respondent spouses signed a receipt thereafter and gave her a
10-day option period to purchase the property. Respondent spouses informed petitioner that the subject
property was mortgaged to Emilio Ramos and Isidro Ramos. Petitioner was asked to pay the balance of
the purchase price to enable the respondent spouses to settle their obligation with the Ramoses.
Petitioner agreed to meet respondent spouses and the Ramoses on August 5, 1978, to consummate the
transaction; however, the respondent spouses and the Ramoses did not appear, same with their second
On August 23, 1978, petitioner allegedly gave respondent spouses three checks for the settlement
the back taxes of property. On September 5, 1978, the agent of the respondent spouses informed
petitioner that the property was the subject of a negotiation for the sale to respondent Sunvar Realty
Development Corporation.
Petitioner alleged that it was only on September 15, 1978, that TCT No. S-72946 covering the
property was issued to respondent spouses. On the same day, petitioner filed and Affidavit of Adverse
Claim with the Office of the Registry of Deeds of Makati, Metro Manila. The Deed of Sale between
respondent spouses and respondent Sunvar was executed on September 15, 1978 and TCT No. S-72377
was issued in favor of Sunvar on September 26, 1978 with the Adverse Claim of petitioner annotated
Respondent spouses and Sunvar filed their Answers and Answers to Cross-Claim, respectively.
On appeal, the Court of Appeals completely reversed the decision of the trial court and ordered the
Register of Deeds of Makati City to lift the Adverse Claim and ordered petitioner to pay respondent
Sunvar and respondent spouses exemplary and nominal damages and attorneys fees. Hence, this
Whether or not the agreement between petitioner and respondent spouses was a mere option or a
contract to sell.
The Supreme Court held that the agreement between the parties was a contract of option and not
a contract to sell. An option is continuing offer or contract by which the owner stipulates with another
that the latter shall have the right to buy the property at a fixed price within a time certain, or under, or in
compliance with, certain terms and conditions, or which gives the owner of the property the right to sell
or demand a sale. It is also sometimes called an unaccepted offer. An option is not of itself a purchase,
but merely secures the privilege to buy. It is not a sale of property but a sale of the right to purchase. Its
distinguishing characteristic is that it imposes no binding obligation on the person holding the option,
aside from the consideration for the offer.

G.R. NO. 154493 December 6, 2006
The Special Assets Management Department (SAMD) of PNB issued an advertisement for the
sale thru bidding of certain PNB properties including Lot No. 17, covered by TCT No. T-15042, with an
advertised floor price of P1,409,000.00, and Lot No. 19, covered by TCT No. T-15036, with an
advertised floor price of P2,268,000.00. Bidding was subject to the following conditions: 1) that cash
bids be submitted not later than April 27, 1989; 2) that said bids be accompanied by a 10% deposit in
managers or cashiers check; and 3) that all acceptable bids be subject to approval by PNB authorities.
In a June 28, 1990 letter to the Manager, Reynaldo Villanueva offered to purchase Lot Nos. 17
and 19 for P3,677,000.00. He also manifested that he was depositing P400,000.00 to show his good faith
but with the understanding that said amount may be treated as part of the payment of the purchase price
only when his offer is accepted by PNB. At the bottom of said letter there appears an unsigned marginal
note stating that P400,000.00 was deposited into Villanuevas account (Savings Account No. 43612)
with PNB-General Santos Branch.
Guevara, the vice-president informed Villanueva that only Lot No. 19 is available and that the
asking price therefor is P2,883,300.00. PNB also stated that if quoted price is acceptable to Villanueva,
then the latter must submit a revised offer to purchase. And Sale shall be subject to its Board of
Directors approval and to other terms and conditions imposed by the Bank on sale of acquired assets.
Instead of submitting a revised offer, Villanueva merely inserted at the bottom of Guevaras letter
a July 11, 1990 marginal note, which reads:
C O N F O R M E:
PRICE OF P2,883,300.00 (downpayment of P600,000.00 and the balance payable in two (2)
years at quarterly amortizations.)
Villanueva paid P200,000.00 to PNB which issued O.R. No. 16997 to acknowledge receipt of
the partial payment deposit on offer to purchase. On the dorsal portion of Official Receipt No. 16997,
Villanueva signed a typewritten note, stating:
This is a deposit made to show the sincerity of my purchase offer with the understanding that it
shall be returned without interest if my offer is not favorably considered or be forfeited if my offer is
approved but I fail/refuse to push through the purchase.
Also, on July 24, 1990, P380,000.00 was debited from Villanuevas Savings Account No. 43612
and credited to SAMD.
On October 11, 1990, however, Guevara wrote Villanueva that upon orders of the PNB Board of
Directors to conduct another appraisal and public bidding of Lot No. 19, SAMD is deferring
negotiations with him over said property and returning his deposit of P580,000.00. Undaunted,
Villanueva attempted to deliver postdated checks covering the balance of the purchase price but PNB
refused the same.
Hence, Villanueva filed with the RTC a Complaint for specific performance and damages against
PNB. The RTC rendered judgment in favor of the plaintiff and against the defendant directing it to
execute a deed of sale in favor of the plaintiff over Lot 19 comprising after payment of the balance in
cash in the amount of P2,303,300.00 and to pay the plaintiff P1,000,000.00 as moral damages;
P500,000.00 as attorneys fees, plus litigation expenses and costs of the suit.

PNB appealed to the CA which reversed and set aside the RTC decision.

Whether or not a perfected contract of sale exists between petitioner and respondent PNB.
The Court sustained the CA. The CA held that the case at bench, consent, in respect to the price
and manner of its payment, is lacking. The record shows that appellant, thru Guevaras July 6, 1990
letter, made a qualified acceptance of appellees letter-offer dated June 28, 1990 by imposing an asking
price of P2,883,300.00 in cash for Lot 19. The letter dated July 6, 1990 constituted a counter-offer (Art.
1319, Civil Code), to which appellee made a new proposal, i.e., to pay the amount of P2,883,300.00 in
staggered amounts, that is, P600,000.00 as downpayment and the balance within two years in quarterly
A qualified acceptance, or one that involves a new proposal, constitutes a counter-offer and a
rejection of the original offer (Art. 1319, id.). Consequently, when something is desired which is not
exactly what is proposed in the offer, such acceptance is not sufficient to generate consent because any
modification or variation from the terms of the offer annuls the offer. Appellees new proposal, which
constitutes a counter-offer, was not accepted by appellant, its board having decided to have Lot 19
reappraised and sold thru public bidding.

JULY 31, 2007
On October 20, 1948, FELICIANO CATALAN Feliciano was discharged from active military
service. The Board of Medical Officers of the Department of Veteran Affairs found that he was unfit to
render military service due to his schizophrenic reaction, catatonic type, which incapacitates him
because of flattening of mood and affect, preoccupation with worries, withdrawal, and sparse and
pointless speech.
On September 28, 1949, Feliciano married Corazon Cerezo.
On June 16, 1951, a document was executed, titled Absolute Deed of Donation, wherein
Feliciano allegedly donated to his sister MERCEDES CATALAN one-half of the real property
described, viz:
A parcel of land located at Barangay Basing, Binmaley, Pangasinan. Bounded on the North by
heirs of Felipe Basa; on the South by Barrio Road; On the East by heirs of Segundo Catalan; and on the
West by Roman Basa. Containing an area of Eight Hundred One (801) square meters, more or less. The
donation was registered with the Register of Deeds.
On December 11, 1953, Peoples Bank and Trust Company filed a Special Proceedings before
the Court of First Instance to declare Feliciano incompetent. On December 22, 1953, the trial court
issued its Order for Adjudication of Incompetency for Appointing Guardian for the Estate and Fixing
Allowance of Feliciano. The following day, the trial court appointed Peoples Bank and Trust Company
as Felicianos guardian. Peoples Bank and Trust Company has been subsequently renamed, and is
presently known as the Bank of the Philippine Islands (BPI).
On November 22, 1978, Feliciano and Corazon Cerezo donated Lots 1 and 3 of their property,
registered under Original Certificate of Title (OCT) No. 18920, to their son Eulogio Catalan.
Mercedes sold the property in issue in favor of her children Delia and Jesus Basa. The Deed of
Absolute Sale was registered with the Register of Deeds and a Tax Declaration was issued in the name
of respondents.
Feliciano and Corazon Cerezo donated Lot 2 of the aforementioned property registered under
OCT No. 18920 to their children Alex Catalan, Librada Catalan and Zenaida Catalan. On February 14,
1983, Feliciano and Corazon Cerezo donated Lot 4 (Plan Psu-215956) of the same OCT No. 18920 to
Eulogio and Florida Catalan.
BPI, acting as Felicianos guardian, filed a case for Declaration of Nullity of Documents,
Recovery of Possession and Ownership, as well as damages against the herein respondents. BPI alleged
that the Deed of Absolute Donation to Mercedes was void ab initio, as Feliciano never donated the
property to Mercedes. In addition, BPI averred that even if Feliciano had truly intended to give the
property to her, the donation would still be void, as he was not of sound mind and was therefore
incapable of giving valid consent. Thus, it claimed that if the Deed of Absolute Donation was void ab
initio, the subsequent Deed of Absolute Sale to Delia and Jesus Basa should likewise be nullified, for
Mercedes Catalan had no right to sell the property to anyone. BPI raised doubts about the authenticity
of the deed of sale, saying that its registration long after the death of Mercedes Catalan indicated fraud.
Thus, BPI sought remuneration for incurred damages and litigation expenses.
On August 14, 1997, Feliciano passed away. The original complaint was amended to substitute
his heirs in lieu of BPI as complainants in Civil Case No. 17666.
The trial court found that the evidence presented by the complainants was insufficient to
overcome the presumption that Feliciano was sane and competent at the time he executed the deed of
donation in favor of Mercedes Catalan. Thus, the court declared, the presumption of sanity or
competency not having been duly impugned, the presumption of due execution of the donation in
question must be upheld. The Court of Appeals upheld the trial courts decision.
Whether said decision of the lower courts is correct.

Petitioners questioned Felicianos capacity at the time he donated the property, yet did not see fit
to question his mental competence when he entered into a contract of marriage with Corazon Cerezo or
when he executed deeds of donation of his other properties in their favor. The presumption that
Feliciano remained competent to execute contracts, despite his illness, is bolstered by the existence of
these other contracts. Competency and freedom from undue influence, shown to have existed in the
other acts done or contracts executed, are presumed to continue until the contrary is shown.
Needless to state, since the donation was valid, Mercedes had the right to sell the property to
whomever she chose. Not a shred of evidence has been presented to prove the claim that Mercedes sale
of the property to her children was tainted with fraud or falsehood. It is of little bearing that the Deed of
Sale was registered only after the death of Mercedes. What is material is that the sale of the property to
Delia and Jesus Basa was legal and binding at the time of its execution. Thus, the property in question
belongs to Delia and Jesus Basa.
petitioners raised the issue of prescription and laches for the first time on appeal before this
Court. It is sufficient for this Court to note that even if the present appeal had prospered, the Deed of
Donation was still a voidable, not a void, contract. As such, it remained binding as it was not annulled in
a proper action in court within four years.
IN VIEW WHEREOF, there being no merit in the arguments of the petitioners, the petition is
DENIED. The CA decision was affirmed in toto.

G.R. No. 127540. October 17, 2001
Paulina Rigonan owned three parcels of land including the house and warehouse on one parcel. She
allegedly sold them to private respondents, the spouses Felipe and Concepcion Rigonan, who claim to
be her relatives. In 1966, petitioners who claim to be her closest surviving relatives, allegedly took
possession of the properties by means of stealth, force and intimidation, and refused to vacate the same.
According to defendants, the alleged deed of absolute sale was void for being spurious as well as lacking
consideration. They said that Paulina Rigonan did not sell her properties to anyone. As her nearest
surviving kin within the fifth degree of consanguinity, they inherited the three lots and the permanent
improvements thereon when Paulina died. They said they had been in possession of the contested
properties for more than 10 years.
1.) Whether or not the consideration in Deed of Sale can be used to impugn the validity of the Contract
of Sale.
2.) Whether or not the alleged Deed of Sale executed by Paulina Rigonan in favor of the private
respondents is valid.
1.) Consideration is the why of a contract, the essential reason which moves the contracting parties to
enter into the contract. The Court had seen no apparent and compelling reason for her to sell the subject
9 parcels of land with a house and warehouse at a meager price of P850 only. On record, there is
unrebutted testimony that Paulina as landowner was financially well off. She loaned money to several
people. Undisputably, the P850.00 consideration for the nine (9) parcels of land including the house and
bodega is grossly and shockingly inadequate, and the sale is null and void ab initio.
2.) The Curt ruled in the negative. Private respondents presented only a carbon copy of this deed. When
the Register of Deeds was subpoenaed to produce the deed, no original typewritten deed but only a
carbon copy was presented to the trial court. None of the witnesses directly testified to prove positively
and convincingly Paulinas execution of the original deed of sale. The carbon copy did not bear her
signature, but only her alleged thumbprint. Juan Franco testified during the direct examination that he
was an instrumental witness to the deed. However, when cross-examined and shown a copy of the
subject deed, he retracted and said that said deed of sale was not the document he signed as witness.

G.R. No. 143370, February 6, 2002
Petitioner spouses Mario J. Mendezona and Teresita M. Mendezona, petitioner spouses Luis J.
Mendezona and Maricar L. Mendezona, and petitioner Teresita Adad Vda. de Mendezona own a parcel
of land each with almost similar areas of 3,462 square meters, 3,466 square meters and 3,468 square
meters. The petitioners ultimately traced their titles of ownership over their respective properties from a
notarized Deed of Absolute Sale executed in their favor by Carmen Ozamiz. The petitioners initiated the
suit to remove a cloud on their said respective titles caused by the inscription thereon. The respondents
opposed the petitioners claim of ownership of the said parcels of land alleging that the titles issued in
the petitioners names are defective and illegal, and the ownership of the said property was acquired in
bad faith and without value inasmuch as the consideration for the sale is grossly inadequate and
unconscionable. Respondents further alleged that at the time of the sale as alleged, Carmen Ozamiz was
already ailing and not in full possession of her mental faculties; and that her properties having been
placed in administration, she was in effect incapacitated to contract with petitioners. They argue that the
Deed of Absolute sale is a simulated contract.
Whether or not the Deed of Absolute Sale in the case at bar was simulated.
The Court ruled that the Deed in the case at bar is not a simulated contract. Simulation is defined
as the declaration of a fictitious will, deliberately made by agreement of the parties, in order to produce,
for the purposes of deception, the appearances of a juridical act which does not exist or is different from
what that which was really executed. The requisites of simulation are:
(a) an outward declaration of will different from the will of the parties; (b) the false appearance must
have been intended by mutual agreement; and (c) the purpose is to deceive third persons.
None of these were clearly shown to exist in the case at bar. The Deed of Absolute Sale is a notarized
document duly acknowledged before a notary public. As such, it has in its favor the presumption of
regularity, and it carries the evidentiary weight conferred upon it with respect to its due execution. It is
admissible in evidence without further proof of its authenticity and is entitled to full faith and credit
upon its face. The burden fell upon the respondents to prove their allegations attacking the validity and
due execution of the said Deed of Absolute Sale. Respondents failed to discharge that burden; hence, the
presumption in favor of the said deed stands.

G.R. No. 55201, February 3, 1994
The deceased spouses Tan Quico and Josefa Oraa, who both died intestate left 96 hectares of
land. The late spouses were survived by four children; Cresencia, Lorenzo, Hermogenes and Elias. Elias
died on May 2, 1935. Cresencia died on December 20, 1967. She was survived by her husband, Lim
Chay Sing, and children, Mariano, Jaime, Jose Jovita, Anacoreta, Antonietta, Ruben, Benjamin and
Rogelio who are now the petitioners in the case at bench.
The Cresencia only reached the second grade of elementary school. She could not read or write in
English. On the other hand, Lorenzo is a lawyer and a CPA. Heirs of Cresencia alleged that since the
demise of the spouses Tan Quico and Josefa Oraa, the subject properties had been administered by
respondent Lorenzo. They claimed that before her death, Cresencia had demanded their partition from
Lorenzo. After Cresencias death, they likewise clamored for their partition. Their effort proved
Respondents Lorenzo and Hermogenes unyielding stance against partition is based on various
contentions. They cited as evidence the Deed of Confirmation of Extra Judicial Settlement of the Estate
of Tan Quico and Josefa Oraa and a receipt of payment. Principally, they urge that the properties had
already been partitioned, albeit, orally; and during her lifetime, the late Cresencia had sold and conveyed
all her interests in said properties to respondent Lorenzo.
Whether or not there is error or mistake in the signing of the Deed.
There is an error in the signing of the Deed.
Article 1332 of the Civil Code provides: When 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 the case at bar, the questioned Deed is written in English, a language not understood by Cresencia an
illiterate in the said language. It was prepared by the respondent Lorenzo, a lawyer and CPA. Lorenzo
did not cause the notarization of the Deed. Considering these circumstances, the burden was on private
respondents to prove that the content of the Deed was explained to the illiterate Cresencia before she
signed it. In this regard, the evidence adduced by the respondents failed to discharge their burden.
This substantive law came into being due to the finding of the Code Commission that there is still a
fairly large number of illiterates in this country, and documents are usually drawn up in English or
Spanish. It is also in accord with our state policy of promoting social justice. It also supplements
Article 24 of the Civil Code which calls on court to be vigilant in the protection of the rights of those
who are disadvantaged in life.

G.R. NO. 146942 APRIL 22, 2003
Petitioner Corazon Ruiz is engaged in the business of buying and selling jewelry. She obtained
loans from private respondent Consuelo Torres on different occasions and in different amounts. Prior to
their maturity, the loans were consolidated under 1 promissory note worth P750 000 secured by real
estate mortgage of a land registered to petitioner.
Petitioner obtained 3 more loans from private respondent worth P100 000 each. These combined
loans of P300 000 were secured by jewelry pledged by petitioner to private respondent worth P571 000.
Petitioner paid the stipulated 3% monthly interest on the P750 000 loan, amounting to P270 000. After
March 1996, petitioner was unable to make interest payments as she had difficulties collecting from her
clients in her jewelry business.
Because of petitioners failure to pay the principal loan of P750 000, as well as the interest payment,
private respondent demanded payment not only of the P750 000 loan but also of the P300 000 loan.
When petitioner failed to pay, private respondent sought the extrajudicial foreclosure of the
aforementioned real estate mortgage.
Whether or not there is undue influence in the signing of the promissory note.
The fact that petitioner and private respondent had entered into not only one but several loan
transactions shows that petitioner was not in any way compelled to accept the terms allegedly imposed
by private respondent.
The promissory notes in question did not contain any fine print provision which could have escaped the
attention of the petitioner. Petitioner had all the time to go over and study the stipulations embodied in
the promissory notes. These promissory notes contain similar terms and conditions, with a little variance
in the terms of interests and surcharges. Moreover, petitioner, in her complaint never claimed that she
was forced to sign the subject note.

G.R. No. 163770 February 17, 2005
Epifania Dela Cruz alleged that in 1992, she discovered that her rice land in has been transferred
and registered in the name of her nephew, Eduardo C. Sison, without her knowledge and consent,
purportedly on the strength of a Deed of Sale she executed.
Epifania then filed a complaint praying to declare the deed of sale null and void. She alleged that
Eduardo tricked her into signing the Deed of Sale, by inserting the deed among the documents she
signed pertaining to the transfer of her residential land, house and camarin, in favor of Demetrio, her
foster child and the brother of Eduardo.
Respondents, spouses Eduardo and Eufemia Sison denied that they employed fraud or trickery in the
execution of the Deed of Sale. They claimed that they purchased the property from Epifania for P20 000
and that the deed was duly notarized, complied with all requisites for its registration, as evidenced by the
Investigation Report by the Department of Agrarian Reform, Affidavit of Seller/Transferor, Affidavit of
Buyer/Transferee, Certification issued by the Provincial Agrarian Reform Officer, Letter for the
Secretary of Agrarian Reform, Certificate Authorizing Payment of Capital Gains Tax, and the payment
of the registration fees. Some of these documents even bore the signature of Epifania which only proves
that she agreed to the transfer of the property.
1.) Whether fraud attended the execution of a contract
2.) Whether the deed of absolute sale is valid.

1.) A comparison of the deed of sale in favor of Demetrio and the deed of sale in favor Eduardo, draws
out the conclusion that there was no trickery employed. One can readily see that the first deed of sale is
in all significant respects different from the second deed of sale. A casual perusal, even by someone as
old as Epifania, would enable one to easily spot the differences. Epifania could not have failed to miss
The Court is bound by the appellate courts findings, unless they are contrary to those of the trial court,
in which case we may wade into the factual dispute to settle it with finality.
2.) After a careful perusal of the records, we sustain the Court of Appeals ruling that the Deed of
Absolute Sale dated November 24, 1989 is valid.
There being no evidence adduced to support her bare allegations, thus, Epifania failed to satisfactorily
establish her inability to read and understand the English language.
Although Epifania was 79 years old at the time of the execution of the assailed contract, her age did not
impair her mental faculties as to prevent her from properly and intelligently protecting her rights. Even
at 83 years, she exhibited mental astuteness when she testified in court. It is, therefore, inconceivable
for her to sign the assailed documents without ascertaining their contents, especially if, as she alleges,
she did not direct Eduardo to prepare the same.

G.R. No. 110672. September 14, 1999
Real Estate Mortgage as a security for loans obtained amounting to P156 270 was executed by
Manuel Behis on a land in favor of Rural Bank of St. Maria, Pangasinan. But Manuel, being a
delinquent, sold the land, evidenced by a Deed of Absolute Sale with Assumption of Mortgage to
Rayandayan and Arceo for the sum of P250 000. On the same day, Rayandayan and Arceo, together
with Manual Behis executed another Agreement embodying the consideration of the sale of the land in
the sum of P2.4 million. The land, however, remained in the name of Behis because the former did not
present to the Register of Deeds the contracts.
Rayandaran and Arceo presented the Deed of Absolute Sale to the bank and negotiated with the
principal stockholder of the bank for the assumption of the indebtedness of Manuel Behis and the
subsequent release of the mortgage on the property by the bank. Rayandaran and Arceo did not show
to the bank the agreement with Manuel Behis providing for the real consideration of P2.4 million.
Subsequently, the bank consented to the substitution of plaintiffs as mortgage debtors in place of Manuel
Behis in a Memorandum of Agreement between private respondents and the bank with restricted and
liberalized terms for the payment of the mortgage debt including the initial payment of P143 782.22.
Due to the appearance of Christina Behis, Manuels wife and a co-signatory in the mortgaged land
alleging that her signature in the deed of sale was forged, the bank discontinued to comply with the
Memorandum of Agreement considering it to be void.
In a letter, plaintiffs demanded that the bank comply with its obligation under the Memorandum of
Agreement to which the latter denied. Petitioner bank argued that the Memorandum of Agreement is
voidable on the ground that its consent to enter said agreement was vitiated by fraud because private
respondents withheld from petitioner bank the material information that the real consideration for the
sale with assumption of mortgage of the property by Manuel Behis to Rayandayan and Arceo is
P2,400,000.00, and not P250,000.00 as represented to petitioner bank. According to petitioner bank, had
it known for the real consideration for the sale, i.e. P2.4 million, it would not have consented into
entering the Memorandum of Agreement with Rayandayan and Arceo as it was put in the dark as to the
real capacity and financial standing of private respondents to assume the mortgage from Manuel Behis.
Whether or not there existed a fraud in the case at bar.
The Court ruled that there was no fraud in the case at bar. It is believed that the non-disclosure to the
bank of the purchase price of the sale of the land between private respondents and Manuel Behis cannot
be the fraud contemplated by Article 1338 of the Civil Code.
The kind of fraud that will vitiate a contract refers to those insidious words or machinations resorted to
by one of the contracting parties to induce to the other to enter into a contract which without them he
would not have agreed to. Simply stated, the fraud must be determining cause of the contract, or must
have caused the consent to be given.
Pursuant to Art. 1339 of the Code, silence or concealment, by itself, does not constitute fraud unless
there is a special duty to disclose certain facts. In the case at bar, private respondents had no duty to do
From the sole reason submitted by the petitioner bank that it was kept in the dark as to the financial
capacity of private respondents, the Court cannot see how the omission or concealment of the real
purchase price could have induced the bank into giving its consent to the agreement; or that the bank
would not have otherwise given its consent had it known of the real purchase price.

G.R. No. 190823, April 04, 2011
On July 10, 1990, Domingo Carabeo (petitioner) entered into a contract denominated as "Kasunduan sa
Bilihan ng Karapatan sa Lupa" with Spouses Norberto and Susan Dingco (respondents) whereby
petitioner agreed to sell his rights over a 648 square meter parcel of unregistered land situated in Purok
Respondents tendered their initial payment of P10,000 upon signing of the contract, the remaining
balance to be paid on September 1990. Respondents were later to claim that when they were about to
hand in the balance of the purchase price, petitioner requested them to keep it first as he was yet to settle
an on-going "squabble" over the land. Sometime in 1994, respondents learned that the alleged problem
over the land had been settled and that petitioner had caused its registration in his name on December
21, 1993 under Transfer Certificate of Title No. 161806. They thereupon offered to pay the balance but
petitioner declined, drawing them to file a complaint before the Katarungan Pambarangay. No
settlement was reached, however, hence, respondent filed a complaint for specific performance before
the Regional Trial Court (RTC) of Balanga, Bataan.
The trial court ruled in favor of respondents. CA affirmed RTC. Hence this petition.
Whether or not the CA erred in their decision by favoring respondents.

The Supreme Court denied the petition. The court contends that the KASUNDUAN which
pertinent portion reads Na ako ay may isang partial na lupa na matatagpuan sa Purok 111, Tugatog,
Orani Bataan, na may sukat na 27 x 24 metro kuwadrado, ang nasabing lupa ay may sakop na dalawang
punong santol at isang punong mangga, kaya't ako ay nakipagkasundo sa mag-asawang Norby Dingco at
Susan Dingco na ipagbili sa kanila ang karapatan ng nasabing lupa sa halagang P38,000.00, That the
kasunduan did not specify the technical boundaries of the property did not render the sale a nullity. The
requirement that a sale must have for its object a determinate thing is satisfied as long as, at the time the
contract is entered into, the object of the sale is capable of being made determinate without the necessity
of a new or further agreement between the parties. As the above-quoted portion of the kasunduan
shows, there is no doubt that the object of the sale is determinate. In the present case, respondents are
pursuing a property right arising from the kasunduan, whereas petitioner is invoking nullity of the
kasunduan to protect his proprietary interest. Assuming arguendo, however, that the kasunduan is
deemed void, there is a corollary obligation of petitioner to return the money paid by respondents, and
since the action involves property rights. The death of a client immediately divests the counsel of
authority. Thus, in filing a Notice of Appeal, petitioner's counsel of record had no personality to act on
behalf of the already deceased client who, it bears reiteration, had not been substituted as a party after
his death.

G.R No. L-24732, April 30, 1968
Juliana Melliza owned three parcels of residential land. She sold to the Municipality of Iloilo a
certain lot to serve as site for the municipal hall. The donation was however revoked by the parties for
the reason that area was found inadequate to meet the requirements of the development plan.
Subsequently the said lot was divided into several divisions. She then sold her remaining interest on the
said lot to Remedios San Villanueva. Remedios in turn transferred the rights to said portion of land to
Pio Sian Melliza. The transfer Certificate of title in Mellizas name bears on annotation stating that a
portion of said lot belongs to the Municipality of Iloilo.
Later the City of Iloilo donated the city hall site to the University of the Philippines, Iloilo which fenced
the same with iron wires.
Pio Sian Melliza then filed action against Iloilo City and the University of the Philippines for recovery
of the parcel of land or of its value.
Petitioner contends that the claimed lot was not included in those lots which were sold by Juliana
Melliza to Iloilo City and further asserts that the Deed of Sale invalid because the law requires as an
essential element of sale, determinate object, which was blur in the case at bar.
Whether or not the Deed of Sale should be declared invalid because the object is not determinate as
required by law.
Article 1460 of the Civil Code states that the sale must have for its object a determinate thing, is fulfilled
as long as, at the time the contract is entered into, the object of the sale is cable of being determinate
without the necessity of a new or further agreement between the parties.
The specific mention of some of the lots plus the statement that the lots object of the sale are the ones
needed for city hall site sufficient provides a basis, as of the time, of the execution of the contract, for
rendering determinate said lots without the need of a new further agreement of the parties.

G.R. No. 176841 : June 29, 2010
This case involves a residential lot with an area of 74 square meters located at Fairview
Subdivision, Baguio City, originally registered in the name of Armando Gabriel, Sr. under Transfer
Certificate of Title (TCT) No. 67181 of the Registry of Deeds of Baguio City.
Sometime in 1996 or thereabouts, Gabriel Sr. sold the subject lot to petitioner Antonita Ordua,
but no formal deed was executed to document the sale. The contract price was apparently payable in
installments as Antonita remitted from time to time and Gabriel Sr. accepted partial payments. One of
the Orduas would later testify that Gabriel Sr. agreed to execute a final deed of sale upon full payment of
the purchase price.
In 1979, Antonita and her sons, Dennis and Anthony Ordua, were already occupying the subject
lot on the basis of some arrangement undisclosed in the records and even constructed their house
thereon. They also paid real property taxes for the house and declared it for tax purposes, as evidenced
by Tax Declaration in which they place the assessed value of the structure at PhP 20,090.
After the death of Gabriel Sr., his son and namesake, respondent Gabriel Jr., secured TCT No. T-71499
over the subject lot and continued accepting payments from the petitioners. On December 12, 1996,
Gabriel Jr. wrote Antonita authorizing her to fence off the said lot and to construct a road in the adjacent
lot. On December 13, 1996, Gabriel Jr. acknowledged receipt of a PhP 40,000 payment from petitioners.
Through a letter dated May 1, 1997, Gabriel Jr. acknowledged that petitioner had so far made an
aggregate payment of PhP 65,000, leaving an outstanding balance of PhP 60,000. A receipt Gabriel Jr.
issued dated November 24, 1997 reflected a PhP 10,000 payment. Despite all those payments made for
the subject lot, Gabriel Jr. would later sell it to Bernard Banta (Bernard) obviously without the
knowledge of petitioners.
On July 3, 2001, petitioners, joined by Teresita, filed a Complaint for Annulment of Title, Reconveyance
with Damages against the respondents before the RTC.
The RTC ruled for the respondents. The CA dismissed the appeal, hence this petition.
Whether or not the sale of the subject lot by Gabriel Sr. to Antonita is unenforceable under the Statute of
Whether or not such sale has adequate consideration;
Whether the instant action has already prescribed; and whether or not respondents are purchasers in
good faith.
On the first issue, the court notices that Gabriel Sr., during his lifetime, sold the subject property
to Antonita, the purchase price payable on installment basis. Gabriel Sr. appeared to have been a
recipient of some partial payments. After his death, his son duly recognized the sale by accepting
payments and issuing what may be considered as receipts therefor. Gabriel Jr., in a gesture virtually
acknowledging the petitioners' dominion of the property, authorized them to construct a fence around it.
And no less than his wife, Teresita, testified as to the fact of sale and of payments received. Eduardo's
assertion in his Answer that "persons appeared in the property" only after "he initiated ejectment
proceedings" is clearly baseless.
On the second issue, the trial court's posture, with which the CA effectively concurred, is patently
flawed. For starters, they equated incomplete payment of the purchase price with inadequacy of price or
what passes as lesion, when both are different civil law concepts with differing legal consequences, the

first being a ground to rescind an otherwise valid and enforceable contract. Perceived inadequacy of
price, on the other hand, is not a sufficient ground for setting aside a sale freely entered into, save
perhaps when the inadequacy is shocking to the conscience. The Court to be sure takes stock of the fact
that the contracting parties to the 1995 or 1996 sale agreed to a purchase price of PhP 125,000 payable
on installments. But the original lot owner, Gabriel Sr., died before full payment can be effected.
Nevertheless, petitioners continued remitting payments to Gabriel, Jr., who sold the subject lot to
Bernard on June 30, 1999. Gabriel, Jr., as may be noted, parted with the property only for PhP 50,000.
On the other hand, Bernard sold it for PhP 80,000 to Marcos and Benjamin. From the foregoing price
figures, what is abundantly clear is that what Antonita agreed to pay Gabriel, Sr., albeit in installment,
was very much more than what his son, for the same lot, received from his buyer and the latter's buyer
later. The Court, therefore, cannot see its way clear as to how the RTC arrived at its simplistic
conclusion about the transaction between Gabriel Sr. and Antonita being without "adequate
On the third issue, the court finds no quibbling about the fraudulent nature of the conveyance of the
subject lot effected by Gabriel Jr. in favor of Bernard. It is understandable that after his father's death,
Gabriel Jr. inherited subject lot and for which he was issued TCT No. T-71499. Since the Gabriel Sr. Antonita sales transaction called for payment of the contract price in installments, it is also
understandable why the title to the property remained with the Gabriels. And after the demise of his
father, Gabriel Jr. received payments from the Orduas and even authorized them to enclose the subject
lot with a fence. In sum, Gabriel Jr. knew fully well about the sale and is bound by the contract as
predecessor-in-interest of Gabriel Sr. over the property thus sold. The prescriptive period for the
reconveyance of fraudulently registered real property is 10 years, reckoned from the date of the issuance
of the certificate of title, if the plaintiff is not in possession, but imprescriptible if he is in possession of
the property. Thus, one who is in actual possession of a piece of land claiming to be the owner thereof
may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right.
As it is, petitioners' action for reconveyance is imprescriptible.
In view of this case, the court ruled that petitioner Antonita Ordua is recognized to have the right of
ownership over subject lot covered by TCT No. T-3276 of the Baguio Registry registered in the name of
Eduardo J. Fuentebella and therefore granted the petition and set aside the decision of the lower court.

G.R. No. 114950, December 19, 1995
Respondent Federico Suntay is the owner of a parcel of land and a rice mill, warehouse, and
other improvements situated in the said land. A rice miller, Federico, in a letter applied as a millercontractor of the National Rice and Corn Corporation (NARIC). He informed the NARIC that he had a
daily rice mill output of 400 cavans of palay and warehouse storage capacity of 150,000 cavans of palay.
His application, although prepared by his nephew-lawyer, Rafael Suntay, was disapproved, because at
that time he was tied up with several unpaid loans.
For purposes of circumvention, he had thought of allowing Rafael to make the application for
him. Rafael prepared an absolute deed of sale whereby Federico, for and in consideration of P20,000.00
conveyed to Rafael said parcel of land with all its existing structures. Said deed was notarized as
Document No. 57 and recorded on Page 13 of Book 1, Series of 1962, of the Notarial Register of Atty.
Herminio V. Flores. Less than three months after this conveyance, a counter sale was prepared and
signed by Rafael who also caused its delivery to Federico. Through this counter conveyance, the same
parcel of land with all its existing structures was sold by Rafael back to Federico for the same
consideration of P20,000.00. Although on its face, this second deed appears to have been notarized as
Document No. 56 and recorded on Page 15 of Book 1, Series of 1962, of the notarial register of Atty.
Herminio V. Flores, an examination thereof will show that, recorded as Document No. 56 on Page 13, is
not the said deed of sale but a certain "real estate mortgage on a parcel of land with TCT No. 16157 to
secure a loan of P3,500.00 in favor of the Hagonoy Rural Bank."
Nowhere on page 13 of the same notarial register could be found any entry pertaining to Rafael's
deed of sale. Testifying on this irregularity, Atty. Flores admitted that he failed to submit to the Clerk of
Court a copy of the second deed. Neither was he able to enter the same in his notarial register. Even
Federico himself alleged in his Complaint that, when Rafael delivered the second deed to him, it was
neither dated nor notarized.
Upon the execution and registration of the first deed, Certificate of Title No. 0-2015 in the name
of Federico was cancelled and in lieu thereof, TCT No. T-36714 was issued in the name of Rafael. Even
after the execution of the deed, Federico remained in possession of the property sold in concept of
owner. Significantly, notwithstanding the fact that Rafael became the titled owner of said land and rice
mill, he never made any attempt to take possession thereof at any time, while Federico continued to
exercise rights of absolute ownership over the property.
In a letter, dated August 14, 1969, Federico, through his new counsel, Agrava & Agrava,
requested that Rafael deliver his copy of TCT No. T-36714 so that Federico could have the counter deed
of sale in his favor registered in his name. The request having been obviously turned down, Agrava &
Agrava filed a petition with the Court of First Instance of Bulacan asking Rafael to surrender his owner's
duplicate certificate of TCT No. T-36714. In opposition thereto, Rafael chronicled the discrepancy in the
notarization of the second deed of sale upon which said petition was premised and ultimately concluded
that said deed was a counterfeit or "at least not a public document which is sufficient to transfer real
rights according to law." On September 8, 1969, Agrava & Agrava filed a motion to withdraw said
petition, and, on September 13, 1969, the Court granted the same.

On July 8, 1970, Federico filed a complaint for reconveyance and damages against Rafael. In his
answer, Rafael scoffed at the attack against the validity and genuineness of the sale to him of Federico's
land and rice mill. Rafael insisted that said property was "absolutely sold and conveyed . . . for a
consideration of P20,000.00, Philippine currency, and for other valuable consideration".
While the trial court upheld the validity and genuineness of the deed of sale executed by
Federico in favor of Rafael, which deed is referred to above as Exhibit A, it ruled that the counter-deed,
referred to as Exhibit B, executed by Rafael in favor of Federico, was simulated and without
consideration, hence, null and void ab initio.
Moreover, while the trial court adjudged Rafael as the owner of the property in dispute, it did not
go to the extent of ordering Federico to pay back rentals for the use of the property as the court made the
evidential finding that Rafael simply allowed his uncle to have continuous possession of the property
because or their understanding that Federico would subsequently repurchase the same.
From the aforecited decision of the trial court, both Federico and Rafael appealed. The Court of Appeals
rendered judgment affirming the trial court's decision, with a modification that Federico was ordered to
surrender the possession of the disputed property to Rafael. Counsel of Federico filed a motion for
reconsideration of the aforecited decision. While the motion was pending resolution, Atty. Ricardo M.
Fojas entered his appearance in behalf of the heirs of Rafael who had passed away on November 23,
1988. Atty. Fojas prayed that said heirs be substituted as defendants-appellants in the case. The prayer
for substitution was duly noted by the court in a resolution dated April 6, 1993. Thereafter, Atty. Fojas
filed in behalf of the heirs an opposition to the motion for reconsideration. The parties to the case were
heard on oral argument on October 12, 1993. On December 15, 1993, the Court of Appeals reversed
itself and rendered an amended judgment.
Whether or not the deed of sale executed by Federico in favor of Rafael is simulated and fictitious and,
hence, null and void.
In the aggregate, the evidence on record demonstrate a combination of circumstances from which
may be reasonably inferred certain badges of simulation that attach themselves to the deed of sale in
question. The complete absence of an attempt on the part of the buyer to assert his rights of ownership
over the land and rice mill in question is the most protuberant index of simulation.
The deed of sale executed by Federico in favor of his now deceased nephew, Rafael, is absolutely
simulated and fictitious and, hence, null and void, said parties having entered into a sale transaction to
which they did not intend to be legally bound. As no property was validly conveyed under the deed, the
second deed of sale executed by the late Rafael in favor of his uncle, should be considered ineffective
and unavailing.
The allegation of Rafael that the lapse of seven years before Federico sought the issuance of a
new title in his name necessarily makes Federico's claim stale and unenforceable does not hold water.
Federico's title was not in the hands of a stranger or mere acquaintance; it was in the possession of his
nephew who, being his lawyer, had served him faithfully for many years. Federico had been all the
while in possession of the land covered by his title and so there was no pressing reason for Federico to
have a title in his name issued. Even when the relationship between the late Rafael and Federico
deteriorated, and eventually ended, it is not at all strange for Federico to have been complacent and
unconcerned about the status of his title over the disputed property since he has been possessing the
same actually, openly, and adversely, to the exclusion of Rafael. It was only when Federico needed the
title in order to obtain a collaterized loan that Federico began to attend to the task of obtaining a title in
his name over the subject land and rice mill.

G.R. No. 120465, September 9, 1999
Being agents and authorized to sell eight (8) parcels of land by the owners thereof, petitioners William
Uy and Rodel Roxas, by virtue of such authority, offered to sell the lands, to respondent National
Housing Authority (NHA) to be utilized and developed as a housing project. NHA approved the
acquisition of the said parcels of land with an area of 31.8231 hectares at the cost of P23.867 million,
pursuant to which the parties executed a series of Deeds of Absolute Sale covering the subject lands.
NHA eventually cancelled the sale over three (3) parcels of land of the eight parcels of lands because of
the report it received from the Land Geosciences Bureau of the Department of Environment and Natural
Resources that the remaining area is located at an active landslide area and therefore, not suitable for
development into a housing project.
Petitioners then filed a complaint for damages but the trial court rendered the cancellation of
contract to be justified and awarded P1.255 million as damages in favor of petitioners. Upon appeal by
petitioners, the Court of Appeals reversed the decision and entered a new one dismissing the complaint
including the award of damages.
1.) Whether or not the contention of petitioner is correct.
2.) Whether or not a partys entry into a contract affects the validity of the contract.
1.) The Petitioners are not correct. They confuse the cancellation of the contract by the NHA as a
rescission of the contract under Article 1191 of the Civil Code. The right to rescission is predicated on a
breach of faith by the other party that violates the reciprocity between them. The power to rescind is
given to the injured party. In this case, the NHA did not rescind the contract. Indeed, it did not have the
right to do so for the other parties to the contract, the vendors did not commit any breach, much less a
substantial breach, of their obligation. The NHA did not suffer any injury. The cancellation was not
therefore a rescission under Article 1191. Rather, it was based on the negation of the cause arising from
the realization that the lands, which were the objects of the sale, were not suitable for housing.
2.) The general rule is that a partys motives for entering into a contract do not affect the
contract. However, when the motive predetermines the cause, the motive may be regarded as the cause.
As held in Liguez v. CA, It is well to note, however, that Manresa himself, while maintaining the
distinction and upholding the inoperativess of the motives of the parties to determine the validity of the
contract, expressly excepts from the rule those contracts that are conditioned upon the attainment of the
motives of either party.

G.R. No. 174719 : May 05, 2010
This case involves Lot No. 9 which has 1,007 square meter parcel of land located at Kinasangan, Pardo, Cebu City and fronting the Cebu provincial highway. The lot originally belonged to Pastor
Pacres who left it intestate to his heirs Margarita, Simplicia, Rodrigo, Francisco, Mario and Vearanda.
Petitioners admitted that at the time of Pastor's death in 1962, his heirs were already occupying definite
portions of Lot No. 9. The front portion along the provincial highway was occupied by the co-owned
Pacres ancestral home, and beside it stood Rodrigo's hut. Mario's house stood at the back of the ancestral
house according to Valentina's testimony in 1968. On the same year, the heirs leased "the ground floor of
the ancestral home together with a lot area of 300 square meters including the area occupied by the
house" to respondent Hilario Ramirez, who immediately took possession thereof. Subsequently in 1974,
four of the Pacres sibling namely, Rodrigo, Francisco, Simplicia and Margarita sold their shares in the
ancestral home and the lot on which it stood to Ramirez. The deeds of sale described the subjects thereof
as "part and portion of the 300 square meters actually in possession and enjoyment by vendee and her
spouse, Hilario Ramirez, by virtue of a contract of lease in their favor."
In 1984, Ygoa filed a petition to survey and segregate the portions she bought from Lot No. 9.
Mario objected on the ground that he wanted to exercise his right as co-owner to redeem his siblings'
shares. Vendee Rodrigo also opposed on the ground that he wanted to annul the sale for failure of
consideration. On the other hand, Margarita and the widow of Francisco both manifested their assent to
Ygoa's petition. By virtue of such manifestation, the court issued a writ of possession respecting
Margarita's and Francisco's shares in favor of Ygoa.
On June 18, 1993, the Republic of the Philippines, through the Department of Public Works and
Highways (DPWH), expropriated the front portion of Lot No. 9 for the expansion of the Cebu south
On September 30, 1994, Mario, petitioners' predecessor-in-interest, filed an ejectment suit
against Ramirez' successor-in-interest Vicentuan. Mario claimed sole ownership of the lot occupied by
Ramirez/Vicentuan by virtue of the oral partition. He argued that Ramirez/Vicentuan should pay rentals
to him for occupying the front lot and should transfer to the rear of Lot No. 9 where the lots of Ramirez's
vendors are located.
The trial court ruled in favor of respondents. The appellate court sustained the ruling of the trial
court. Hence this petition.
Whether petitioners were able to prove the existence of the alleged oral agreements such as the
partition and the additional obligations of surveying and titling
Whether the issue of ownership regarding the front portion of Lot No. 9 and entitlement to the
expropriation payment may be resolved in this action
On the first issue, the court find no compelling reason to deviate from the foregoing rule and
disturb the trial and appellate courts' factual finding that the existence of an oral partition was not

proven. Our examination of the records indicates that, contrary to petitioners' contention, the lower
courts' conclusion was justified. Petitioners' only piece of evidence to prove the alleged oral partition
was the joint affidavit supposedly executed by some of the Pacres siblings and their heirs in 1993, to the
effect that such an oral partition had previously been agreed upon. Petitioners did not adequately
explain why the affidavit was executed only in 1993, several years after respondents Ygoa and Ramirez
took possession of the front portions of Lot No. 9.
On the second issue, the Supreme Court affirmed the decision of the Court of Appeals, they
found that the parties did not provide the Court with the pleadings filed in the expropriation case, which
makes it impossible to know the extent of the issues already submitted by the parties in the expropriation
case and thereby assess whether there was forum-shopping. Nonetheless, while the court cannot rule on
the existence of forum-shopping for insufficiency of evidence, it is correct that the issue of ownership
should be litigated in the expropriation court. The court hearing the expropriation case is empowered to
entertain the conflicting claims of ownership of the condemned property and adjudge the rightful owner
thereof, in the same expropriation case. This is due to the intimate relationship of the issue of ownership
with the claim for the expropriation payment. Petitioners' objection regarding respondents' claim over
the expropriation payment should have been brought up in the expropriation court as opposition to
respondent's motion. The SC cannot agree with the trial court's order to partition the lot in accordance
with Exhibit No. 1 or the sketch prepared by petitioner Valentina. To do so would resolve the issue of
ownership over portions of Lot No. 9 and effectively preempt the expropriation court, based solely on
actual occupation.
In sum, the Supreme Court denied the petition.

G.R. No. 136427, December 17, 2002
The present case stemmed from a battle of ownership over Lots 1320 and 1333 both located in
Barrio Baybay, Roxas City, Capiz. Paulina originally owned these two parcels of land. After Paulinas
death, ownership of the lots passed to her daughter, Filomena. The surviving children of Filomena,
namely, Sonia Fuentes Londres, Armando V. Fuentes, Chi-Chita Fuentes Quintia, Roberto V. Fuentes,
Leopoldo V. Fuentes and Marilou Fuentes Esplana, herein petitioners, now claim ownership over Lots
1320 and 1333. On the other hand, private respondents Consolacion and Elena anchor their right of
ownership over Lots 1320 and 1333 on the Absolute Sale executed by Filomena on April 24, 1959.
Filomena sold the two lots in favor of Consolacion and her husband, Julian. Elena is the daughter of
Consolacion and Julian.
On March 30, 1989, petitioners filed a complaint for the declaration of nullity of contract,
damages and just compensation. Petitioners sought to nullify the Absolute Sale conveying Lots 1320 and
1333 and to recover just compensation from public respondents DPWH and DOTC. Petitioners claimed
that as the surviving children of Filomena, they are the owners of Lots 1320 and 1333. Petitioners
claimed that these two lots were never sold to Julian. Petitioners doubt 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. Petitioners pointed out that Lot
2034, situated in Barrio Culasi, Roxas City, Capiz, was also owned by their grandmother, Paulina. And
that it was only recently that they learned of the claim of private respondents when Consolacion filed a
petition for the judicial reconstitution of the original certificates of title of Lots 1320 and 1333 with the
Capiz Cadastre. Upon further inquiry, petitioners discovered that there exists a notarized Absolute Sale
executed on April 24, 1959 registered only on September 22, 1982 in the Office of the Register of Deeds
of Roxas City. The private respondents copy of the Absolute Sale was tampered so that the second
parcel of lot sold, Lot 2034 would read as Lot 1333. However, the Records Management and Archives
Office kept an unaltered copy of the Absolute Sale. This other copy shows that the objects of the sale
were Lots 1320 and 2034.
Private respondents maintained that they are the legal owners of Lots 1333 and 1320. Julian purchased
the lots from Filomena in good faith and for a valid consideration. Private respondents explained that
Julian was deaf and dumb and as such, was placed in a disadvantageous position compared to Filomena.
Julian had to rely on the representation of other persons in his business transactions. After the sale,
Julian and Consolacion took possession of the lots. Up to now, the spouses successors-in-interest are in
possession of the lots in the concept owners. Private respondents 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. Private respondents filed a counterclaim with damages.
The cross-claim of petitioners against public respondents was for the recovery of just
compensation. Petitioners claimed that during the lifetime of Paulina, public respondents took a 3,200square meter portion of Lot 1320. The land was used as part of the Arnaldo Boulevard in Roxas City
without any payment of just compensation. In 1988, public respondents also appropriated a 1,786-square
meter portion of Lot 1333 as a vehicular parking area for the Roxas City Airport. Sonia, one of the
petitioners, executed a deed of absolute sale in favor of the Republic of the Philippines over this portion

of Lot 1333. According to petitioners, the vendee agreed to pay petitioners P214,320.00. Despite
demands, the vendee failed to pay the stipulated amount.
The trial court issued its decision upholding the validity of the Absolute Sale. This was affirmed by the
Court of Appeals.
Whether or not the notarized copy should prevail.

Decision affirmed with the modification that the cross-claim against public respondents is
Among others, petitioners harp on the fact that the notarized and registered copy of the Absolute
Sale should have, been correspondingly corrected. Petitioners believe that the notarized and archived
copy should prevail. We disagree. A contract of sale is perfected at the moment there is a meeting of the
minds upon the thing which is the object of the contract and upon the price. Being consensual, a contract
of sale has the force of law between the contracting parties and they are expected to abide in good faith
with their respective contractual commitments. Article 1358 of the Civil Code, which requires certain
contracts to be embodied in a public instrument, is only for convenience, and registration of the
instrument is needed only to adversely affect third parties. Formal requirements are, therefore, for the
purpose of binding or informing third parties. Non-compliance with formal requirements does not
adversely affect the validity of the contract or the contractual rights and obligations of the parties.

GR No. 181672, September 20, 2010
Magdalena V. Reyes (Reyes) owned a piece of titled land in Pilar Village, Las Pias City. On August
17, 1979 she got a housing loan from respondent Social Security System (SSS) for which she mortgaged
her land. In late 1979, however, she asked the petitioner spouses Antonio and Leticia Vega (the Vegas) to
assume the loan and buy her house and lot since she wanted to emigrate.
Upon inquiry with the SSS, an employee there told the Vegas that the SSS did not approve of members
transferring their mortgaged homes. The Vegas could, however, simply make a private arrangement
with Reyes provided they paid the monthly amortizations on time. This practice, said the SSS
employee, was commonplace. Armed with this information, the Vegas agreed for Reyes to execute in
their favor a deed of assignment of real property with assumption of mortgage and paid
Reyes P20,000.00 after she undertook to update the amortizations before leaving the country. The Vegas
then took possession of the house in January 1981.
But Reyes did not readily execute the deed of assignment. She left the country and gave her sister,
Julieta Reyes Ofilada (Ofilada), a special power of attorney to convey ownership of the
property. Sometime between 1983 and 1984, Ofilada finally executed the deed promised by her sister to
the Vegas. Ofilada kept the original and gave the Vegas two copies. The latter gave one copy to the
Home Development Mortgage Fund and kept the other. Unfortunately, a storm in 1984 resulted in a
flood that destroyed the copy left with them.
Whether or not the Vegas presented adequate proof of Reyes sale of the subject property to them
The CA ruled that the Vegas were unable to prove that Reyes assigned the subject property to
them, given that they failed to present the deed of assignment in their favor upon a claim that they lost it.
But the rule requiring the presentation of the original of that deed of assignment is not
absolute. Secondary evidence of the contents of the original can be adduced, as in this case, when the
original has been lost without bad faith on the part of the party offering it.
Here, not only did the Vegas prove the loss of the deed of assignment in their favor and what the
same contained, they offered strong corroboration of the fact of Reyes sale of the property to
them. They took possession of the house and lot after they bought it. Indeed, they lived on it and held it
in the concept of an owner for 13 years before PDC came into the picture. They also paid all the
amortizations to the SSS with Antonio Vegas personal check, even those that Reyes promised to settle
but did not. And when the SSS wanted to foreclose the property, the Vegas sent a managers check to it
for the balance of the loan. Neither Reyes nor any of her relatives came forward to claim the
property. The Vegas amply proved the sale to them

G.R. No. 109410, August 28, 1996
The lot in question covered by Transfer Certificate of Title No. 51330 was acquired by plaintiff Aurelio
Roque and Maria Mesina during their conjugal union and the house constructed thereon was likewise
built during their marital union. Out of their union, plaintiff and Maria Mesina had four children. When
Maria Mesina died on August 28, 1966, the only conjugal properties left are the house and lot above
stated of which plaintiff herein, as the legal spouse, is entitled to one-half share pro-indiviso thereof.
With respect to the one-half share pro-indiviso now forming the estate of Maria Mesina, plaintiff and the
four children, the defendants here, are each entitled to one-fifth (1/5) share pro-indiviso.
Aurelio Roque then entered into a contract of Absolute Sale with the spouses Aurora and Jose Repuyan.
However, on August 20, 1980, Aurelio filed a complaint for Rescission of Contract against Spouses
Repuyan for the latters failure to pay the balance of the purchase price. A deed of absolute sale was then
executed on February 4, 1982 between Aurelio S. Roque, Corazon Roque, Feliciano Roque, Severa
Roque and Osmundo Roque and Clara Balatbat, married to Alejandro Balatbat. On April 14, 1982, Clara
Balatbat filed a motion for the issuance of a writ of possession which was granted by the trial court on
September 14, 1982 "subject, however, to valid rights and interest of third persons over the same portion
thereof, other than vendor or any other person or persons privy to or claiming any rights or interests
under it." The corresponding writ of possession was issued on September 20, 1982. The lower court
then rendered judgment in favor of the Spouses Repuyan and declared the Deed of Absolute Sale as
valid. On appeal by petitioner Balatbat, the Court of Appeals affirmed the lower courts decision.
Whether or not the delivery of the owners certificate of title to spouses Repuyan by Aurelio
Roque is for convenience or for validity or enforceability.
The provision of Article 1358 on the necessity of a public document is only for convenience, not for
validity or enforceability. It is not a requirement for the validity of a contract of sale of a parcel of land
that this be embodied in a public instrument.
The Supreme Court found that the sale between Aurelio and the Spouses Repuyan is not merely
for the reason that there was no delivery of the subject property and that consideration/price was not
fully paid but the sale as consummated, hence, valid and enforceable.
The non-delivery of the possession of the subject property to the private respondent, suffice it to
say that ownership of the thing sold is acquired only from the time of delivery thereof, either actual or
constructive. Article 1498 of the Civil Code provides that when the sale is made through a public
instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of
the contract, if from the deed the contrary does not appear or cannot be inferred. The execution of the
public instrument, without actual delivery of the thing, transfers the ownership from the vendor to the

vendee, who may thereafter exercise the rights of an owner over the same. In the instant case, vendor
Roque delivered the owner's certificate of title to herein private respondent. It is not necessary that
vendee be physically present at every square inch of the land bought by him, possession of the public
instrument of the land is sufficient to accord him the rights of ownership. Thus, delivery of a parcel of
land may be done by placing the vendee in control and possession of the land (real) or by embodying the
sale in a public instrument (constructive).
A contract of sale being consensual, it is perfected by the mere consent of the parties. Delivery
of the thing bought or payment of the price is not necessary for the perfection of the contract; and failure
of the vendee to pay the price after the execution of the contract does not make the sale null and void for
lack of consideration but results at most in default on the part of the vendee, for which the vendor may
exercise his legal remedies. Tthe petition for review is hereby dismissed for lack of merit.
G.R. No. 128574, September 18, 2002
Andres Abanto owned two parcels of land situated in Campuyo, Manjuyod, Negros Oriental.
One lot is registered in his name and the other lot is unregistered. When he died, his heirs executed an
"Extrajudicial Settlement of the Estate of the Deceased and Simultaneous Sale." In this document,
Abanto's heirs adjudicated unto themselves the two lots and sold the unregistered lot to the United
Planters Sugar Milling Company, Inc. (UPSUMCO), and the registered lot to Angel M. Teves, for a total
sum of P115,000.00. The sale was not registered.
Out of respect for his uncle Montenegro, who was UPSUMCO's founder and president, Teves
verbally allowed UPSUMCO to use the registered lot for pier and loading facilities, free of charge,
subject to the condition that UPSUMCO shall shoulder the payment of real property taxes and that its
occupation shall be co-terminus with its corporate existence. UPSUMCO then built a guesthouse and
pier facilities on the property. Years later, UPSUMCOs properties were acquired by the Philippine
National Bank (PNB). Later, PNB transferred the same properties to the Asset Privatization Trust (APT)
which, in turn, sold the same to the Universal Robina Sugar Milling Corporation (URSUMCO).
URSUMCO then took possession of UPSUMCOs properties, including Teves' lot.
Upon learning of the acquisition of his lot, Teves formally asked the corporation to turn over to
him possession thereof or the corresponding rentals. He stated in his demand letters that he merely
allowed UPSUMCO to use his property until its corporate dissolution; and that it was not mortgaged by
UPSUMCO with the PNB and, therefore, not included among the foreclosed properties acquired by
URSUMCO refused to heed Teves' demand, claiming that it acquired the right to occupy the
property from UPSUMCO which purchased it from Andres Abanto; and that it was merely placed in the
name of Angel Teves, as shown by the "Deed of Transfer and Waiver of Rights and Possession" dated
November 26, 1987. Under this document, UPSUMCO transferred to URSUMCO its application for
agricultural and foreshore lease. The same document partly states that the lands subject of the foreshore
and agricultural lease applications are bounded on the north by the "titled property of Andres Abanto
bought by the transferor (UPSUMCO) but placed in the name of Angel Teves". URSUMCO further
claimed that it was UPSUMCO, not Teves, which has been paying the corresponding realty taxes.
Consequently, Teves filed a complaint for recovery of possession of real property with damages
against URSUMCO. However, on September 4, 1992, Teves died and was substituted by his heirs. On
April 6, 1994, the RTC held that URSUMCO has no personality to question the validity of the sale of
the property between the heirs of Andres Abanto and Angel Teves since it is not a party thereto; that
Teves' failure to have the sale registered with the Registry of Deeds would not vitiate his right of
ownership, unless a third party has acquired the land in good faith and for value and has registered the
subsequent deed; that the list of properties acquired by URSUMCO from the PNB does not include the
disputed lot and, therefore, was not among those conveyed by UPSUMCO to URSUMCO.

On appeal by URSUMCO, the Court of Appeals affirmed the RTC decision, holding that the
transaction between Angel Teves and Andres Abanto's heirs is a contract of sale, not one to sell, because
ownership was immediately conveyed to the purchaser upon payment of P115,000.00. On October 29,
1996, URSUMCO filed a motion for reconsideration but was denied by the Appellate Court. Hence, the
instant petition for review on certiorari.
Whether or not the respondents have established a cause of action against petitioner.

There is no established cause of action. Petitioner URSUMCO contends that respondents have no
cause of action because the "Extrajudicial Settlement of the Estate of the Deceased Andres Abanto and
Simultaneous Sale" is merely a promise to sell and not an absolute deed of sale, hence, did not transfer
ownership of the disputed lot to Angel Teves. Assuming that the document is a contract of sale, the
same is void for lack of consideration because the total price of P115,000.00 does not specifically refer
to the registered lot making the price uncertain. Furthermore, the transaction, being unregistered, does
not bind third parties.
Petitioner's contentions lack merit. As held by the RTC and the Court of Appeals, the transaction
is not merely a contract to sell but a contract of sale. In a contract of sale, title to the property passes to
the vendee upon delivery of the thing sold; while in a contract to sell, ownership is, by agreement,
reserved in the vendor and is not to pass to the vendee until full payment of the purchase price. In the
case at bar, the subject contract, duly notarized, provides that the Abanto heirs sold to Teves the lot
covered by TCT No. H-37. There is no showing that the Abanto heirs merely promised to sell the said
lot to Teves.
The absolute ownership over the registered land was indeed transferred to Teves is further shown by his
acts subsequent to the execution of the contract. As found by the trial court, it was Teves, not Andres
Abanto's heirs, who allowed UPSUMCO to construct pier facilities and guesthouse on the land. When
the property was erroneously included among UPSUMCO's properties that were transferred to petitioner
URSUMCO, it was Teves, not the heirs of Andres Abanto, who informed petitioner that he owns the
same and negotiated for an arrangement regarding its use. Teves even furnished petitioner documents
and letters showing his ownership of the lot, such as a copy of the "Extrajudicial Settlement of the Estate
of the Deceased Andres Abanto and Simultaneous Sale" and a certified true copy of TCT No. H-37
covering the disputed lot. Indeed, the trial court and the Court of Appeals correctly ruled that Teves
purchased the lot from the Abanto heirs.
That the contract of sale was not registered does not affect its validity. Being consensual in nature, it is
binding between the parties, the Abanto heirs and Teves. Article 1358 of the New Civil Code, which
requires the embodiment of certain contracts in a public instrument, is only for convenience, and the
registration of the instrument would merely affect third persons. Formalities intended for greater
efficacy or convenience or to bind third persons, if not done, would not adversely affect the validity or
enforceability of the contract between the contracting parties themselves. Thus, by virtue of the valid
sale, Angel Teves stepped into the shoes of the heirs of Andres Abanto and acquired all their rights to the

G.R. No. 134873, September 17, 2002
Petitioner ADR Shipping Services, Inc. entered into a contract with private respondent Gallardo
for the use of the formers vessel MV Pacific Breeze to transport logs to Taiwan. The logs were the
subject of a sales agreement between private respondent as seller being a timber concessionaire and log
dealer, and Stywood Philippines, as buyer. Private respondent paid an advance charter fee of P242,000
representing ten percent of the agreed charter fee. Under the charter agreement, the boat should be ready
to load by February 5, 1988.
The boat failed to arrive on time, prompting private respondent to notify petitioner of its
cancellation of the charter contract and the withdrawal of the advance payment deposited to the account
of ADR shipping. ADR Shipping refused to return the advance payment to Gallardo claiming that the
agreement on the date of February 5, 1988 was just the reference commencing date and the true
loading date was February 16, 1988. This prompted the latter to file a case for sum of money and
damages. The Regional Trial Court ordered ADR Shipping to pay Gallardo the advance payment with 6
percent interest per annum and attorneys fees. The decision of the trial court was affirmed by the Court
of Appeals. Hence, this petition.
Whether or not private respondent is entitled to the refund of the advance payment representing
his deposit for the charter of the ship provided by petitioner.
There was ambiguity in the interpretation of the contract provisions as to the date of the loading
of the ship. Ambiguities in a contract are interpreted strictly, albeit not unreasonably, against the drafter
thereof when justified in light of the operative facts and surrounding circumstances. In this case,
ambiguity must be construed strictly against ADR which drafted and caused the inclusion of the
ambiguous provisions.
The charter agreement explicitly states that February 5, 1988 is the intended date when the ship
is expected ready to load while February 16, 1988 is merely the canceling date. Considering that the
subject contract contains the foregoing express provisions, the parties have no other recourse but to
apply the literal meaning of the stipulations. The cardinal rule is that when the terms of the contract are
clear, leaving no doubt as to the intention of the parties, the literal meaning of its stipulations is
Pursuant to the provision of Art 1191 of the Civil Code, the power to rescind obligations is
implied in reciprocal ones in case one of the obligors should not comply with what is incumbent upon
him, and the injured party may rescind the obligation, with payment of damages. In this case the private

respondent is entitled to the return of his down payment, subject to a legal interest of 6 percent per
annum, and to the payment of damages.

G.R. No. 172279 : February 11, 2010
Respondent Luis Reyes Pastor filed a complaint for specific performance in the Regional Trial
Court of Imus, Cavite, praying that petitioner Valentin Movido be compelled to cause the survey of a
parcel of land subject of their contract to sell. In his complaint, respondent alleged that he and petitioner
executed a kasunduan sa bilihan ng lupa where the latter agreed to sell a parcel of land located in
Paliparan, Dasmarias, Cavite with an area of some 21,000 sq. m. out of the 22,731 sq. m. covered by
Transfer Certificate of Title. Respondent further alleged that another kasunduan was later executed
supplementing the kasunduan sa bilihan ng lupa. It provided that, if a Napocor power line traversed the
subject lot, the purchase price would be lowered to P200/sq. m. beyond the distance of 15 meters on
both sides from the center of the power line while the portion within a distance of 15 meters on both
sides from the center of the power line would not be paid.Lastly, respondent alleged that he already paid
petitioner P5 million out of the original purchase price of P8.4 million stated in the kasunduan sa bilihan
ng lupa . He was willing and ready to pay the balance of the purchase price but due to petitioner's refusal
to have the property surveyed despite incessant demands, his unpaid balance could not be determined
with certainty.In his answer, petitioner alleged that the original negotiation for the sale of his property
involved the entire area of 22,731 sq. m. However, as respondent was not sure whether a Napocor power
line traversed the property, they then executed the kasunduan . After respondent personally inspected the
property, a final agreementthe kasunduan sa bilihan ng lupa was executed where the area to be sold was
21,000 sq. m. for P400/sq. m. for a total sum of P8.4 million. The final agreement also listed a schedule
of payments of the purchase price and included a penalty clause in case of default.The RTC ruled in
favor of petitioner and held that the kasunduan preceded the kasunduan sa bilihan ng lupa. The CA
reversed the RTC and held that the kasunduan sa bilihan ng lupa was the first document executed by the
parties, not the kasunduan. Movido's motion for reconsideration did not have its desired result, hence,
this petition.
Whether the KASUNDUAN comes first and not the kasunduan sa bilihan ng lupa.
The supreme court dismissed the petition. It explains that both contracts were executed and
notarized on the same day , December 6, 1993. More importantly, both contracts, even independent of
the time of their execution but, taken together, clearly spell out in full the respective rights and
obligations of the parties. A reading of the kasunduan sa bilihan ng lupa and the kasunduan would
readily reveal that payment of the purchase price does not depend on the survey of the property. In other
words, the purchase price should be paid whether or not the property is surveyed. The survey of the
property is important only insofar as the right of respondent to the reduction of the purchase price is
concerned. If respondent pays a higher amount without the property being surveyed first (compared to
what he is liable to pay after the survey of the property) it will not be a problem because the excess of
the amount paid can easily be refunded to him. Such would be the plain application of the provisions of
the kasunduan . On the other hand, petitioner cannot successfully reject respondent's demand for

petitioner to perform his obligation to have the property surveyed. Under the kasunduan sa bilihan ng
lupa , petitioner is obligated to conduct the survey on or before the due date of the last installment.
Corollary to this, the CA erred when it proceeded to determine the remaining balance of respondent by
applying a reduced rate on certain portions of the property. Luis Reyes Pastor should thereafter pay the
balance of the purchase price, after which, Marginito should execute the kasulatan ng ganap na bilihan
ng lupa (deed of absolute sale) in favor of Luis Reyes Pastor, reflecting as purchase price the amount
actually paid by the latter.

G.R No. 163419. February 13, 2008
TSPI Corporation entered into a Collective Bargaining Agreement with the corporation Union
for the increase of salary for the latters members for the year 2000 to 2002 starting from January 2000.
thus, the increased in salary was materialized on January 1, 2000. However, on October 6, 2000, the
Regional Tripartite Wage and production Board raised daily minimum wage from P 223.50 to P 250.00
starting November 1, 2000. Conformably, the wages of the 17 probationary employees were increased to
P250.00 and became regular employees therefore receiving another 10% increase in salary. In January
2001, TSPIC implemented the new wage rates as mandated by the CBA. As a result, the nine employees
who were senior to the 17 recently regularized employees, received less wages. On January 19, 2001,
TSPICs HRD notified the 24 employees who are private respondents, that due to an error in the
automated payroll system, they were overpaid and the overpayment would be deducted from their
salaries starting February 2001. The Union on the other hand, asserted that there was no error and the
deduction of the alleged overpayment constituted diminution of pay.
Whether the alleged overpayment constitutes diminution of pay as alleged by the Union.
Yes, because it is considered that Collective Bargaining Agreement entered into by unions and
their employers are binding upon the parties and be acted in strict compliance therewith. Thus, the CBA
in this case is the law between the employers and their employees.
Therefore, there was no overpayment when there was an increase of salary for the members of
the union simultaneous with the increasing of minimum wage for workers in the National Capital
Region. The CBA should be followed thus, the senior employees who were first promoted as regular
employees shall be entitled for the increase in their salaries and the same with lower rank workers.

G.R. No. 178537,February 11, 2008
On July 24,1997, petitioner obtained a loan fro the respondent in the amount of P3,925,000
evidenced by a promissory note and secured by two deeds of chattel mortgage covering two dump trucks
and a bull dozer . Petitioner defaulted entire obligation became due and demandable. A deed of
assignment was drafted by the respondent on October 6, 2000 and March 8, 2001 respectively.
Petitioners completed the delivery of heavy equipment mentioned in the deed of assignment to
respondent which accepted the same without protest or objection. Respondent manifested to admit an
amended complaint for the seizure and delivery of two more heavy equipment which are covered under
the second deed of the chattel mortgage. RTC ruled that the deed of assignment and the petitioners
delivery of the heavy equipment effectively extinguished the petitioners obligation and respondent as
stopped. CA reversed the decision ordering the petitioner the outstanding debt of P4,275,919.69 plus
Did the Deed of Assignment operate to extinguish petitioners debt to the respondent such that
the replevin suit could no longer prosper?
The deed of assignment was a perfected agreement which extinguished petitioners total
outstanding obligation to the respondent. The nature of the assignment was a dacion en pago whereby
property is alienated to the creditor in the satisfaction of a debt in money. Since the agreement was
consummated by the delivery of the last unit of heavy equipment under the deed, petitioners are deemed
to have been released from all their obligations from the respondents.

G.R. No. 166704,December 20, 2006
On May 6, 1999, petitioner Aquintey filed before RTC Baguio, a complaint for sum of money
and damages against respondents. Agrifina alleged that Felicidad secured loans from her on several
occasions at monthly interest rates of 6% to 7%. Despite demands, spouses Tibong failed to pay their
outstanding loans of P773,000,00 exclusive of interests. However, spouses Tiong alleged that they had
executed deeds of assignment in favor of Agrifina amounting to P546,459 and that their debtors had
executed promissory notes in favor of Agrifina. Spouses insisted that by virtue of these documents,
Agrifina became the new collector of their debts. Agrifina was able to collect the total amount of
P301,000 from Felicdads debtors. She tried to collect the balance of Felicidad and when the latter
reneged on her promise, Agrifina filed a complaint in the office of the barangay for the collection of
P773,000.00. There was no settlement. RTC favored Agrifina. Court of Appeals affirmed the decision
with modification ordering defendant to pay the balance of total indebtedness in the amount of
P51,341,00 plus 6% per month.
Whether or not the deeds of assignment in favor of petitioner has the effect of payment of the
original obligation that would partially extinguish the same
Substitution of the person of the debtor ay be affected by delegacion. Meaning, the debtor offers,
the creditor accepts a third person who consent of the substitution and assumes the obligation. It is
necessary that the old debtor be released fro the obligation and the third person or new debtor takes his
place in the relation . Without such release, there is no novation. Court of Appeals correctly found that
the respondents obligation to pay the balance of their account with petitioner was extinguished pro tanto
by the deeds of credit. CA decision is affirmed with the modification that the principal amount of the
respondents is P33,841.