Case Doctrines: SALES

Midterms Cases
1. Dignos vs. CA- A deed of sale is absolute in nature although
denominated as a "Deed of Conditional Sale" where nowhere in the
contract in question is a proviso or stipulation to the effect that title to the
property sold is reserved in the vendor until full payment of the purchase
price, nor is there a stipulation giving the vendor the right to unilaterally
rescind the contract the moment the vendee fails to pay within a fixed
period. The contract is what the law defines it to be, not what it is called by
the parties.
2. Artates vs. Urbi- A sale of homestead land in satisfaction of a debt
contracted before the expiration of five years is null and void. Whether it be
viewed as an exemption or as a condition attached to the grant to
encourage people to settle and cultivate public land, the immunity in
question is in consonance with the definite public policy underlying these
grants, which is to "preserve and keep in the family of the homesteader
that portion of public land which the State has given to him" so he may
have a place to live with his family and become a happy citizen and a
useful member of society, and the exemption should not be given
restrictive application.
3. Heirs of Enrique Zambales vs. CA- The bilateral promise to buy and sell
the homestead lot at a price certain, which was reciprocally demandable,
was entered into within the five-year prohibitory period and is therefore,
illegal and void. Further, the agency to sell the homestead lot to a third
party was coupled with an interest inasmuch as a bilateral contract was
dependent on it and was not revocable at will by any of the parties. To all
intents and purposes, therefore, there was an actual executory sale
perfected during the period of prohibition except that it was reciprocally
demandable thereafter and the agency to sell to any third party was
deferred until after the expiration of the prohibitory period. The law does
not distinguish between executory and consummated sales. The"rentals"
were ostensibly to be paid during the five-year prohibitory period, and the
agency to sell made effective only after the lapse of the said period, was
merely a devise to circumvent the prohibition.
4. Quiroga vs. Parsons- A contract is what the law defines it to be, and not
what it is called by the contracting parties. There was the obligation on
the part of the plaintiff to supply the beds, and, on the part of the
defendant, to pay their price. These features exclude the legal conception

of an agency or order to sell whereby the agent received the thing to sell it,
and does not pay its price, but delivers to the principal the price he obtains
from the sale of the thing to a third person, and if he does not succeed in
selling it, he returns it. By virtue of the contract between the plaintiff and
the defendant, the latter, on receiving the beds, was necessarily obliged to
pay their price within the term fixed, without any other consideration and
regardless as to whether he had or had not sold the beds.
5. CONCRETE AGGREGATES, Inc. vs. CTA- A specialty contractor is one
whose operations pertain to construction work requiring special skill and
involves the use of specialized building trades or crafts. The manufacture
of concrete and cement mix do not involve the foregoing requirements as
to put it within such special category. The habituality of the production of
goods for the general public characterizes the business of petitioner
6. PEOPLE'S HOMESITE & HOUSING CORPORATION vs. CA- When a
lot was conditionally or contingently awarded, and the proposed
consolidation of the subdivision plan is subject to the approval by a board,
such as the city council in the case, such withdrawal of the same is within
the rights of the directors of the board.The contract of sale is perfected at
the moment there is a meeting of minds upon the thing which is the object
of the contract and upon the price. From that moment, the parties may
reciprocally demand performance, subject to the law governing the form of
contracts.
7. Toyota Shaw v. CA- A definite agreement on the manner of payment of
the price is an essential element in the formation of a binding and
enforceable contract of sale. This is so because the agreement as to the
manner of payment goes into the price such that a disagreement on the
manner of payment is tantamount to a failure to agree on the price.
Definiteness as to the price is an essential element of a binding agreement
to sell personal property.
8. SOUTHWESTERN SUGAR AND MOLASSES COMPANY vs.
ATLANTIC GULF- It is true that under article 1324 of the new Civil Code,
the general rule regarding offer and acceptance is that, when the offerer
gives to the offeree a certain period to accept, "the offer may be withdrawn
at any time before acceptance" except when the option is founded upon
consideration, but this general rule must be interpreted as modified by the
provision of article 1479 above referred to, which applies to "a promise to
buy and sell" specifically. As already stated, this rule requires that a
promise to sell to be valid must be supported by a consideration distinct
from the price.
9. ATKINS, KROLL and CO., INC. vs. CUA HIAN TEK- If the option is

given without a consideration, it is a mere offer of a contract of sale, which

is not binding until accepted. If, however, acceptance is made before a
withdrawal, it constitutes a binding contract of sale, even though the option
was not supported by a sufficient consideration.
10. SANCHEZ vs. RIGOS- Even supposing that petitioner granted an
option which is not binding for lack of consideration, the authorities hold
that: If the option is given without a consideration, it is a mere offer of a
contract of sale, which is not binding until accepted. If, however,
acceptance is made before a withdrawal, it constitutes a binding contract
of sale, even though the option was not supported by a sufficient
consideration
11. NATINO vs. IAC- A commitment by the bank to resell a property within
a specified period, although accepted by the party in whose favor it was
made, is considered an option not supported by consideration distinct from
the price and therefore not binding upon the promissor.
12. SERRA vs. CA- In a unilateral promise to sell, where the debtor fails to
withdraw the promise before the acceptance by the creditor, the
transaction becomes a bilateral contract to sell and to buy, because upon
acceptance by the creditor of the offer to sell by the debtor, there is already
a meeting of the minds of the parties as to the thing which is determinate
and the price which is certain. In which case, the parties may then
reciprocally demand performance. On the other hand, Article 1479 of the
Code provides that an accepted unilateral promise to buy and sell a
determinate thing for a price certain is binding upon the promisor if the
promise is supported by a consideration distinct from the price. In the
present case, the consideration is even more onerous on the part of the
lessee since it entails transferring of the building and/or improvements on
the property to petitioner, should respondent bank fail to exercise its option
within the period stipulated.
An optional contract is a privilege existing only in one party, the buyer. For
a separate consideration paid he is given the right to decide to purchase or
not, a certain merchandise or property at anytime within the agreed period
at a fixed price. This being, his prerogative, he may not be compelled to
exercise the option to buy before the time expires.
13. ROMAN vs. GRIMALT- A sale shall be considered perfected and
binding as between vendor and vendee when they have agreed as to the
thing which is the object of the contract and as to the price, even though
neither has been actually delivered. The sale of the schooner was not

perfected and the purchaser did not consent to the execution of the deed
of transfer for the reason that the title of the vessel was in the name of one
Paulina Giron and not in the name of Plaintiff. Plaintiff promised, to perfect
his title to the vessel, but he failed to do so. If no contract of sale was
actually executed by the parties the loss of the vessel must be borne by its
owner.
14. NORKIS DISTRIBUTORS, INC. vs. CA- The issuance of a sales
invoice does not prove transfer of ownership of the thing sold to the buyer.
An invoice is nothing more than a detailed statement of the nature, quantity
and cost of the thing sold and has been considered a bill of sale. In all
forms of delivery, it is necessary that the act of delivery whether
constructive or actual be couple with intention of delivering the thing
15. SOUTHERN MOTORS, INC., vs. MOSCOSO- In sales on
installements, where the action instituted is for specific performance and
the mortgaged property is subsequently attached and sold, the sale thereof
does not amount to a foreclosure of the mortgage, hence, the sellercreditor is entitled to deficiency judgment.
16. PASCUAL vs. UNIVERSAL MOTORS CORP.- To sustain defendant's
argument is to overlook the fact that if the guarantor should be compelled
to pay the balance of the purchase price, the guarantor will in turn be
entitled to recover what she has paid from the debtor-vendee (Art. 2066,
Civil Code); so that ultimately, it will be the vendee who will be made to
bear the payment of the balance of the price, despite the earlier
foreclosure of the chattel mortgage given by him. Thus, the protection
given by Article 1484 would be indirectly subverted, and public policy
overturned.

17. FILINVEST CREDIT CORPORATION vs.CA- The device contract of

lease with option to buy is at times resorted to as a means to circumvent
Article 1484, particularly paragraph (3) thereof.Through the set-up, the
vendor, by retaining ownership over the property in the guise of being the
lessor, retains, likewise, the right to repossess the same, without going
through the process of judicial foreclosure, in the event the vendee-lessee
defaults in the payment of the installments. There arises therefore no need
to constitute a chattel mortgage over the movable sold. The vendor, after

repossessing the property and, in effect, canceling the contract of sale,

gets to keep all the installments-cum-rentals already paid. It is thus for
these reasons that Article 1485 of the new Civil Code provides that: The
preceding article shall be applied to contracts purporting to be leases of
personal property with option to buy, when the lessor has deprived the
lessee of possession or enjoyment of the thing.
18. LAYUG vs. IAC- R.A. 6552, which took effect at the time the execution
of the contract, shall govern the sales of real estate on instalments as in
the case at bar. It recognizes the vendor's right to cancel such contracts
upon failure of the vendee to comply with the terms of the sale, but
imposes, chiefly for the latter's protection, certain conditions thereon. Even
in residential properties, at Act recognizes and re-affirms the vendors right
to cancel the contract to sell upon breach and non-payment of the
stipulated instalments. In such a case of cancelled contract, only a right to
refund of the cash surrender value of payments equivalent to 50% of total
payments made is attributable to the buyer
19. Spouses dela Cruz v. CARemedies under Recto Law are alternative
and not cumulative. The seller-mortgagee may still recover unpaid balance
of purchase price where property was not sold at public auction. If there is
no actual foreclosure of mortgaged property, mortgagee may still resort to
an ordinary action for collection of the unpaid balance of the purchase
price.
20. AGUSTIN vs. CA- Where the mortgagor plainly refuses to deliver the
chattel subject of the mortgage upon his failure to pay two or more
installments, or if he conceals the chattel to place it beyond the reach of
the mortgagee, it logically follows as a matter of common sense, that the
necessary expenses incurred in the prosecution by the mortgagee of the
action for replevin so that he can regain possession of the chattel, should
be borne by the mortgagor. Recoverable expenses would, in our view,
include expenses properly incurred in effecting seizure of the chattel and
reasonable attorneys fees in prosecuting the action for replevin.
20. FIESTAN vs. CA- The prohibition mandated by par. (2) of Article 1491
in relation to Article 1409 of the Civil Code does not apply in the instant
case where the sale of the property in dispute was made under a special
power inserted in or attached to the real estate mortgage pursuant to Act
No. 3135, as amended. It is a familiar rule of statutory construction that, as
between a specific statute and general statute, the former must prevail
since it evinces the legislative intent more clearly than a general statute

does. The Civil Code is of general character while Act No. 3135, as
amended, is a special enactment and therefore the latter must prevail.
The representation is not ordinary agency but primarily an authority
conferred upon the mortgagee for his own protection.
21. DIZON vs. SUNTAY- Where the owner delivered the diamond ring to
another solely for sale on commission but the latter instead pawned the
same without authority to do so, the owner is not estopped from pursuing
an action against the pawnshop for the recovery of the possession of said
ring. An exception to Art. 559 where the possession of movable property
acquired in good faith is equivalent to a title is, when one has lost any
movable or has been unlawfully deprived thereof may recover it from the
person in possession of the same. If the possessor of a movable lost of
which the owner has been unlawfully deprived, has acquired it in good faith
at a public sale, the owner cannot obtain its return without reimbursing the
price paid therefor.
22. EDCA vs. SANTOS- It is the contention of the petitioner that the
private respondents have not established their ownership of the disputed
books because they have not even produced a receipt to prove they had
bought the stock. Actual delivery of the books having been made, Cruz
acquired ownership over the books which he could then validly transfer to
the private respondents. The fact that he had not yet paid for them to
EDCA was a matter between him and EDCA and did not impair the title
acquired by the private respondents to the books. Furthermore, Article 559
provides that "the possession of movable property acquired in good faith is
equivalent to a title.
FINALS CASES
1. Carbonell vs. CAThe annotation of the adverse claim by the first
buyer in good faith is deemed to have been equivalent to the registration
required under Article 1544. What is registered is not the document but the
right of ownership over the property.
2. Olivares vs. Gonzales In a consolidation case where the property
was subjected to two different sales, one, with pacto de retro which was
unregistered and an absolute sale which was registered, and the
possession of the property is with the vendee of the latter sale, who were
not included as party-defendant in the case. Justice and equity demand

that said vendees in possession of property should be heard first before

adjudication of the ownership of the property. In other words, it would be
more in keeping with substantial justice if the controversy between the
parties to be resolved on the merits rather than on a procedural technicality
in the light of the express mandate of the Rules that they be "liberally
construed in order to promote their object and to assist the parties in
obtaining just, speedy and inexpensive determination of every action and
proceeding."
3. Nuguid vs. CAAlthough the second sale was made by the heirs of the
deceased the said heirs are deemed the judicial continuation of the
personality of the decedent. Essentially, therefore, the first and second
sales were made by the same person, as envisioned under Article 1544 of
the Civil Code. The disputed property being immovable property, the
ownership should belong to the vendee who in good faith first recorded it in
the Registry of Property, pursuant to the same article. Good faith is
deemed to be present (a) when the original certificate of title was clean
and free from any annotation or encumbrance and (b) when there is lack of
knowledge of the prior sale.
4. Valdes vs. CA The rule is clear that a prior right is accorded to the
vendee who first recorded his right in good faith over an immovable
property. An annotation of an adverse claim made prior to a deed of
assignment, establishes a superior right over the property and it was
effectively a notice to the whole world. This is equivalent to registration in
good faith which Article 1544 provides.
5. Taedo vs. CAWhen two deeds of sale for an inherited property
which were executed after the death of the decedent and after a deed of
extra-judicial settlement. And which said deeds of sale where made on
different dates, the ownership would vest in the deed which was registered,
even if the other deed is executed earlier. The same rule applies even if
actual possession is in the vendee of the deed executed earlier.
6. Radiowealth Finance Co. vs. PalileoArticle 1544 is not applicable to
land not registered under Act no. 496. Under Act. No. 3344, registration of
instruments affecting registered lands is without prejudice to a third party
with a better right. Mere registration of a sale in ones favor does not give
him any right over the land if the vendor was not anymore the owner of the
land having previously sold the same to somebody else even if the earlier
sale was unrecorded.
Article 1544 cannot be invoked to benefit the purchaser at the execution
sale though the latter was a buyer in good faith and even if this second

sale was registered. This is because, the purchaser of the unregistered

land at a sheriffs execution sale only steps into the shoes of the judgment
debtor, and merely acquires the latter's interest in the property sold as of
the time the property was levied upon.
7. Dagupan Trading Co. vs. MacamThe subsequent registration of the
land is a technicality that could not cancel and render of no effect the
previous unregistered sale and conveyance of title and ownership in favor
of the first buyer, especially when the first buyer took possession of the
land conveyed as owner thereof and introduced considerable
improvements thereon.
8. Cruz vs. Cabana In order that the provisions of Article 1544 of the
new Civil Code may be invoked, it is necessary that the conveyance must
have been made by a party who has an existing right in the thing and the
power to dispose of it. It cannot be set up by a second purchaser who
comes into possession of the property that has already been acquired by
the first purchaser in full dominion, this not withstanding that the second
purchaser records his title in the public registry, if the registration be done
in bad faith, the philosophy underlying this rule being that the public
records cannot be covered into instruments of fraud and oppression by
one who secures an inscription therein in bad faith. A purchaser who has
knowledge of fact which would put him upon inquiry and investigation as to
possible defects of the title of the vendor and fails to make such inquiry
and investigation, cannot claim that he is a purchaser in good faith.
Although the buyers were not able to register the absolute deed of sale,
they are considered to be the first ones to register in good faith their right
over the property. As their failure to register the deed of absolute sale was
because the owners duplicate certificate was in the hands of the bank
where the property was mortgaged. Likewise, a buyer who succeeded in
registering the later sale in his favor was made in bad faith when he knew
and he was informed of the prior sale in favor of respondents-spouses.
Such "knowledge of a prior transfer of a registered property by a
subsequent purchaser makes him a purchaser in bad faith and his
knowledge of such transfer vitiates his title acquired by virtue of the latter
instrument of conveyance which creates no right as against the first
purchaser."
9. Caram v. LauretaOne who purchases real estate with knowledge of a
defect or lack of title in his vendor can not claim that he has acquired title
thereto in good faith, as against the true owner of the land or of an interest
therein, and the same rule must be applied to one who has knowledge of
facts which should have put him upon such inquiry and investigation as

might be necessary to acquaint him with the defects in the title of his
vendor.
--The fact that the second contract is not void under Article 1409 and that
Article 1544 does not declare void a deed of sale registered in bad faith
does not mean that said contract is not void. Article 1544 specifically
provides who shall be the owner in case of double sales. To give full effect
to this provision, the status of the two contracts must be determined and
clarified. One contract must be declared valid so that one vendor may
exercise all the rights of an owner. While the other contract must be
declared void to cut-off all rights which may arise from said contract.
10. David vs. BandinThe issue of good faith or bad faith of the buyer in
case of double sales is only relevant where the subject of the sale is a
registered land and the purchaser is buying the same from the registered
owner whose title to the land is clean, which incidentally is not in the case
at bar, where the subject properties where extra-judicially partitioned. One
who purchases an unregistered land should have been diligent regarding
the true ownership of the properties they bought. They should not have
merely relied on the tax declaration shown to them by the seller.
11. Mole vs IACIt is generally held that in the sale of a designated and
specific article sold as secondhand, there is no implied warranty as to its
quality or fitness for the purpose intended, at least where it is subject to
inspection at the time of the sale. On the other hand, there is also authority
to the effect that in a sale of a secondhand articles there may be, under
some circumstances, an implied warranty of fitness for the ordinary
purpose of the article sold or for the particular purpose of the buyer. An
express warranty such as the certification in this case of the A1 condition
of the machine would make the seller liable.
A redhibitory defect must be an imperfection or defect of such nature as to
engender a certain degree of importance. An imperfection or defect of little
consequence does not come within the category of being redhibitory.
Therefore, a machine requiring major repairs before it could be used is a
redhibitory defect, which warrants rescission of the contract.
12. ENGINEERING & MACHINERY CORP. vs. CAWhere an action is
one for breach or damages and not for the enforcement of the warranties
against hidden defects, Article 1715 on contract for piece of work applies.
However, inasmuch as this provision does not contain a specific
prescriptive period, the general law on prescription, which is Article 1144 of
the Civil Code, will apply. Said provision states, that actions upon a written
contract" prescribe in ten years.

13. De Leon v. SalvadorHaving acquired jurisdiction over the case and

rendered judgment that had become final and executory, a court retained
jurisdiction over its judgment to the exclusion of all other co-ordinate courts
for its execution. Execution of its judgment having been carried out by the
sheriff with the levy and sale of the judgment debtors properties, the
judgment debtor could not in the guise of a new and separate second
action ask another court of co-ordinate jurisdiction to interfere by injunction
with execution proceedings to set them aside and to order the holding of a
new execution sale. The action should be brought in the first court.
14. Ramos vs. CAThe following undisputed circumstances prove that a
Conditional Sale was an equitable mortgage: (1) plaintiff vendor remained
in possession of the properties she allegedly sold to defendants; (2) the
sums representing the alleged purchase price were actually advanced to
plaintiff by way of loans, and (3) the properties allegedly purchased by
defendant have never been declared for taxation purposes in their names.
Settled is the rule that to create the presumption enunciated by Article
1602, the existence of one circumstance is enough. The said article
expressly provides therefor "in any of the following cases," hence the
existence of any of the circumstances enumerated therein, not a
concurrence nor an overwhelming number of such circumstances, suffices
to give rise to the presumption that the contract with the right of repurchase
is an equitable mortgage.
Sales with a right to repurchase, as defined by the Civil Code, are not
favored. We will not construe instruments to be sales with a right to
repurchase, with the stringent and onerous effects which follow, unless the
terms of the document and the surrounding circumstances require it.
Whenever, under the terms of the writing, any other construction can fairly
and reasonably be made, such construction will be adopted and the
contract will be construed as a mere loan unless the court can see that, if
enforced according to its terms, it is not an unconscionable one.
Article 1607 contemplates a contentious proceeding wherein the vendor a
retro must be named respondent in the caption and title of the petition for
consolidation of ownership and duly summoned and heard. An order
granting the vendee's petition for consolidation of ownership, without the
vendor a retro being named as respondent, summoned and heard, is a
patent nullity for want of jurisdiction of the court over the person of the
latter.
15. FLORES vs. SO The new civil code shall not be applicable to a
Pacto De retro Sale executed before it was enacted, hence the old civil
code governs. It is provided in Article 1509 Old Civil Code that if the vendor
does not comply with the provisions of Article 1518, (i.e. to return the price,

plus expenses) the vendee shall acquire irrevocably the ownership of the
thing sold. Under the old Civil Code, the ownership was consolidated in the
vendee a retro by operation of law. Hence Articles 1606 and 1607 of the
New Civil Code which requires registration of the consolidation of
ownership in the vendee a retro only by judicial order, does not apply.
16. Alonzo vs. IACIt was not abandoning the necessity under Article
1088 of the Civil Code of written notification to commence the running of
the 30-day period of redemption. However as a matter of exception and
due to the peculiar circumstances of the case where the co-heirs only
brought an action for redemption of hereditary right sold by another co-heir
only after 13 years, after having actual knowledge thereof, by their
actuations, when the co-heirs lived with the purchaser in the same lot, they
are deemed to have lost their right to redeem. The spirit of the law, which is
to make sure that the redemptioners are duly notified is served
notwithstanding the absence of written notice, because there was actual
knowledge among them.
While the general rule is, that to charge a party with laches in the
assertion of an alleged right it is essential that he should have knowledge
of the facts upon which he bases his claim, yet if the circumstances were
such as should have induced inquiry, and the means of ascertaining the
truth were readily available upon inquiry, but the party neglects to make it,
he will be chargeable with laches, the same as if he had known the facts.
17. Lee Chuy Realty v. CAA formal offer to redeem, accompanied by a
bona fide tender of redemption price, is not essential where the right to
redeem is exercised through a judicial action within the redemption period
and simultaneously depositing the redemption price. The filing of the action
itself within the period of redemption is equivalent to a formal offer to
redeem.
What is condition precedent to a valid exercise of the right of legal
redemption is either the formal tender with the consignation or the filing of
a complaint in court. What is paramount is the availment of the fixed and
definite periods within which to exercise the right of legal redemption.
LEASE
1. GUZMAN, BOCALING & CO. vs. BONNEVIEIt is not necessary to
secure approval by the probate court of the Contract of Lease because it
did not involve an alienation of real property of the estate nor did the term
of the lease exceed one year. Only if the stipulations were enforced in the
Contract of Lease which provided for the lessees right of first priority to
purchase the property and when "all things and conditions being equal, is

when it is necessary for the administratrix to secure such approval by the

probate court.
There should be identity of the terms and conditions to be offered to the
lesses and all other prospective buyers, with the lessees to enjoy the right
of first priority, when there is a stipulation that all things and conditions
being equal. It only meant that a good bargain is necessary, such that no
inequity with regards to the purchase price offered to the prospective
buyers as compared to the lessee having the right of first priority
2. YAP vs. CRUZIn the absence of notice or demand to vacate, the
lease contract on a month-to-month basis continues to be in force in favor
of the lessee and cannot be deemed to have expired as of the end of the
month automatically. It must also be shown that the lessee effectively
relinquished his leasehold rights over the premises in view of the failure of
negotiations for the sale of the goodwill. Clearly, the transfer of the
leasehold rights is conditional in nature and has no force and effect if the
condition is not complied with.
3. CLUTARIO vs. CAUnder the Rental Law, non-payment of rentals is a
sufficient ground for ejectment, but the arrears must be for at least 3
months. Corollarily, acceptance of rentals in arrears does not constitute
waiver of default in payment of rentals and would be a ground to dismiss
an action for ejectment.
- The need by the lessor of the leased premises is a valid ground for
ejectment. Thus, if an abode can be used for limited business purposes,
we see no reason why it cannot be used as an abode for persons
rendering services usually necessary or desirable for the maintenance and
enjoyment of a home and who personally minister to the personal comfort
and convenience of the members of the houses.
4. LEGAR MANAGEMENT & REALTY CORP. vs. CALease agreements
with no specified period, but in which rentals are paid monthly, are
considered to be on a month-to-month basis. They are for a definite period
and expire after the last day of any given thirty-day period, upon proper
demand and notice by the lessor to vacate, even if the lease agreement
was verbal in nature.
5. UNITED REALTY CORP. vs. CA When the lease agreement refers to
a dwelling unit or land is for a definite period, the lessor has a right to
judicially eject the lessee from the leased premises, as exception to
Section 4 PD No. 20 which suspends the application of Article 1673(1) of
the Civil Code, providing for the fixed period for the termination of leases.
In addition, other provisions of the Civil Code and the Rules of Court of the

Philippines on lease contracts insofar as they are not in conflict with the
provisions of PD 20 shall apply.
6. YEK SENG CO. vs CAWhen the rental was paid monthly and the
term had not been expressly agreed upon, the lease was understood
under Article 1687 to be terminable from month to month. When the lease
contract has expired it could no longer be extended. However, it could still
be extended upon the sound discretion of the court, but was by no means
obligatory upon it as a merely ministerial duty. It may legally refuse to do
so, if the circumstances surrounding the case warrants such action.