Nool & Almojera v. CA, Nool & Nebre / GR No. 116635 / 7.24.

97 /
Sales / PANGANIBAN, J p:
F: One lot formerly owned by Victorio Nool has an area of 1 hectare.
Another lot previously owned by Francisco Nool has an area of 3.0880
hectares. Spouses (plaintiffs) Conchita Nool and Gaudencio Almojera
alleged that they are the owners of the subject lands. They are in dire
need of money, they obtained a loan DBP, secured by a real estate
mortgage on said parcels of land, which were still registered in the names
of Victorino and Francisco Nool, at the time, Since the plaintiffs failed to
pay the said loan, the mortgage was foreclosed; that within the period of
redemption, the plaintiffs contacted Anacleto Nool for the latter to
redeem the foreclosed properties from DBP, which the latter did; and as a
result, the titles of the 2 parcels of land in question were transferred to
Anacleto; that as part of their arrangement or understanding, Anacleto
agreed to buy from Conchita the 2 parcels of land, for a total price of
P100,000.00, P30,000.00 of which price was paid to Conchita, and upon
payment of the balance of P14,000.00, the plaintiffs were to regain
possession of the 2 hectares of land, which amounts spouses Anacleto
Nool and Emilia Nebre failed to pay. Anacleto Nool signed the private
writing, agreeing to return subject lands when plaintiffs have the money
to redeem the same; defendant Anacleto having been made to believe,
then, that his sister, Conchita, still had the right to redeem the said
properties.
I: Is the purchase of the subject lands to Anacleto valid?
R: Nono dat quod non habet, No one can give what he does not have;
Contract of repurchase inoperative thus void.
Article 1505 of the Civil Code provides that where goods are sold by a
person who is not the owner thereof, and who does not sell them under
authority or with consent of the owner, the buyer acquires no better title
to the goods than the seller had, unless the owner of the goods is by his
conduct precluded from denying the sellers authority to sell.
Jurisprudence, on the other hand, teaches us that a person can sell only
what he owns or is authorized to sell; the buyer can as a consequence
acquire no more than what the seller can legally transfer. No one can
give what he does not have nono dat quod non habet. In the present
case, there is no allegation at all that petitioners were authorized by DBP
to sell the property to the private respondents. Further, the contract of

repurchase that the parties entered into presupposes that petitioners

could repurchase the property that they sold to private respondents. As
petitioners sold nothing, it follows that they can also repurchase
nothing. In this light, the contract of repurchase is also inoperative and by
the same analogy, void.

Nool & Almojera v. CA, Nool & Nebre / GR No. 116635 / 7.24.97 /
Sales / PANGANIBAN, J p:
F: Two parcels of land were mortgaged by herein petitioners to DBP to
secure a loan. The subject properties were foreclosed by the bank for
failure of the private petitioners to pay their loan. After DBP became the
absolute owner of the two parcels of land, Anacleto, a younger brother of
Conchita, during the redemption period negotiated with DBP and
succeeded in buying the lands. New titles were issued in name private
respondents. Petitioners seek recovery of the aforementioned parcels of
land from the respondents on the strength of two private documents. The
first, an agreement which appeared to have sold to respondents the two
parcels of land and the second, in which there was an agreement that
Conchita can repurchase the said lands when she has the money. The
trial court voided both contracts and decided in favor of the respondents.
The Court of Appeals affirmed the decision of the lower court, hence, this
petition for review on certiorari.
I: WON the sale to PR by the bank is void.
R: Affirmed. The principal contract of sale contained and the auxiliary
contract of Repurchase are both void. It is clear that the seller had no
longer had any title to the parcels of land at the time the Contract of Sale
was drawn.
This conclusion of the two lower courts appears to find support in Dignos
vs. Court of Appeals, where the Court held: "Be that as it may, it is
evident that when petitioners sold said land to the Cabigas spouses, they
were no longer owners of the same and the sale is null and void." In the
present case, it is clear that the sellers no longer had any title to the
parcels of land at the time of sale. Since Exhibit D, the alleged contract of
repurchase, was dependent on the validity of Exhibit C, it is itself void. A
void contract cannot give rise to a valid one. Verily, Article 1422 of the
Civil Code provides that "(a) contract which is the direct result of a
previous illegal contract, is also void and inexistent."
Moreover, the Civil Code itself recognizes a sale where the goods are to
be "acquired . . . by the seller after the perfection of the contract of sale,"
clearly implying that a sale is possible even if the seller was not the
owner at the time of sale, provided he acquires title to the property later
on. In the present case however, it is likewise clear that the sellers can no
longer deliver the object of the sale to the buyers, as the buyers
themselves have already acquired title and delivery thereof from the

rightful owner, the DBP. Thus, such contact may be deemed to be

inoperative and may thus fall, by analogy, under item no. 5 of Article
1409 of the Civil Code: "Those which contemplate an impossible service."
Article 1459 of the Civil Code provides that "the vendor must have a right
to transfer the ownership thereof [object of the sale] at the time it is
delivered." Here, delivery of ownership is no longer possible. It has
become impossible.
S. Dignos & I. Lumungsod v. CA & Jabil / GR No. 59266 / 2.29.88 /
Sales / Bidin, J p:
F: Sps Dignos (P) sold a land to PR in Cebu for 28K: for 2 instalments w/
assumption of indebtedness with the bank for 12k. Paid and
acknowledged thru a DOS. On 11.25.6 Sps P sold the same land to Sps
Cabigas who were US Citz for 35K, in a DOS. After w/c Sps P refused to
accept payment from PR, for w/c they sued, the court rescinded the sale
to Sps Cabigas and ordered PR to pay the balance, P was also ordered to
pay the Sps Cabigas for everything, including the fencing made by the
latter. Appealing to the CA, w/c affirmed the same but modified as to the
payment of the fencing, hence this, arguing that the contract was one of
a contract to sell.
I: WON subject contract is a deed of absolute sale or a contract to
sell.
R: Affirmed in toto. It has been held that 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.
On the contrary, all the elements of a valid contract of sale under Article
1458 of the Civil Code, are present, such as: (1) consent or meeting of the
minds; (2) determinate subject matter; and (3) price certain in money or
its equivalent. In addition, Article 1477 of the same Code provides that
"The ownership of the thing sold shall be transferred to the vendee upon
actual or constructive delivery thereof." As applied in the case of Froilan v.
Pan Oriental Shipping Co., et al. (12 SCRA 276), this Court held that in the
absence of stipulation to the contrary, the ownership of the thing sold
passes to the vendee upon actual or constructive delivery thereof.

As found by the trial court, the Dignos spouses delivered the possession
of the land in question to Jabil as early as March 27, 1965 so that the
latter constructed thereon Sally's Beach Resort also known as Jabil's
Beach Resort in March, 1965; Mactan White Beach Resort on January 15,
1966 and Bevirlyn's Beach Resort on September 1, 1965. Such facts were
admitted by petitioner spouses.
It has been ruled, however, that "where time is not of the essence of the
agreement, a slight delay on the part of one party in the performance of
his obligation is not a sufficient ground for the rescission of the
agreement" (Taguba v. Vda. de Leon, supra). Considering that private
respondent has only a balance of P4,000.00 and was delayed in payment
only for one month, equity and justice mandate as in the aforecited case
that Jabil be given an additional period within which to complete payment
of the purchase price.
Peoples Homesite & Housing Co. v. CA & Mendoza sps. / GR No.
61623 / 12.26.84 / Sales / Aquino, J p:
F: PHHC (P) prepared and awarded a parcel of land to PR sps, subject to
the approval of the QC Council, which the latter disapproved, PR was
advised. P then prepared a new parcel w/ a smaller area for PR, submitted
for approval - approved. P then, after a while, issued a resolution recalling
all awards to persons who failed to pay, PR failed to pay, P then offered
the land (tentatively awarded to PR) to others. The new awardees paid,
and deeds of sale where executed. PR moved for reconsideration of P, but
before that they sued. CFI ruled in favor of P, CA reversed, hence this.
I: WON there was a perfected sale w/ PR.
R: Reversed.
There was no perfected sale of Lot 4. It was conditionally or
contingently awarded to the Mendozas subject to the approval by
the city council of the proposed consolidation subdivision plan and the
approval of the award by the valuation committee and higher authorities.
The city council did not approve the subdivision plan. The Mendozas were
advised in 1961 of the disapproval. In 1964, when the plan with the area
of Lot 4 reduced to 2,608.7 square meters was approved, the Mendozas
should have manifested in writing their acceptance of the award
for the purchase of Lot 4 just to show that they were still
interested in its purchase although the area was reduced and to
obviate any doubt on the matter. They did not do so. The People's

Homesite and Housing corporation (PHHC) board of directors

acted within its rights in withdrawing the tentative award.
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." (Art. 1475, Civil Code). "In conditional
obligations. the acquisition of rights, as well as the extinguishment or loss
of those already acquired, shall depend upon the happening of the event
which constitutes the condition." (Art. 1181, Civil Code). Under the facts
of the case, there was no meeting of minds on the purchase of
Lot 4 with an area of 2,608.7 square meters at P21 a square
meter.

Heirs of J. San Andres, V. Ziga, & S. Tria v. Vicente rodriguez / GR

No. 135634 / 5.31.00 / Sales / MENDOZA, J p:
F: Juan San Andres was the registered owner of Lot 1914-B-2 situated in
Liboton, Naga City. On September 28, 1964, he sold a portion thereof,
consisting of 345 square meters to respondent Vicente Rodriguez for
P2,415.00. A Deed of Sale evidenced the sale. Upon the death of Juan San
Andres on May 5, 1985, Ramon San Andres was appointed judicial
administrator of the decedent's estate. A sketch plan of the 345-square
meter lot sold to respondent was prepared and from there it was found
that respondent had enlarged the area, which he purchased, by 509
square meters. Thereafter, the judicial administrator brought an action, in
behalf of the estate of Juan San Andres, for recovery of possession of the
509-square meter lot. Respondent alleged that apart from the 345-square
meter lot which had been sold to him by Juan San Andres, the latter
likewise sold to him the following day the remaining portion of the lot
consisting of 509 square meters, with both parties treating the two lots as
one whole parcel with a total area of 854 square meters. As proof of the
sale to him of 509 square meters, respondent attached to his answer a
receipt signed by the late Juan San Andres. Respondent also attached to
his answer a letter of judicial administrator Ramon San Andres asking
payment of the balance of the purchase price. CFI ruled in favor of
petitioner. It ruled that there was no contract of sale to speak of for lack
of a valid object because there was no sufficient indication in the receipt
presented to identify the property subject of the sale, hence, the need to
execute a new contract. Respondent appealed to the Court of Appeals
(CA). The CA reversed the decision of the trial court. The appellate court
held that the object of the contract was determinable, and that there was
conditional sale with the balance of the purchase price payable within five
years from the execution of the deed of sale. Hence, this petition.
I: WON the sale was conditional or absolute.
R: Affirmed. The Supreme Court ruled that since the lot
subsequently sold to respondent was said to adjoin the
"previously paid lot" on three sides thereof, the subject lot was
capable of being determined without the need of any new
contract. Thus, all of the essential elements of a contract of sale
were present, i.e. that there was a meeting of the minds between
the parties, by virtue of which the late Juan San Andres
undertook to transfer ownership of and to deliver a determinate
thing for a price certain in money. The perfected contract of sale was

confirmed by the former administrator of the estate, who wrote a letter to

respondent asking P300.00 as partial payment for the subject lot. It
cannot be gainsaid that the contract of sale between the parties was
absolute, not conditional. There was no reservation of ownership nor a
stipulation providing for a unilateral rescission by either party. The
decision of the Court of Appeals was affirmed with the modification that
respondent was ordered to reimburse petitioners for the expenses of the
survey.
Sps Galang (P) v. CA & Buenaventura(s) (PR) / GR No. 80645 /
8.3.93 / Sales / Romero, J p:
F: On 7.16.76, PR sold to P 2 parcels of land in Tagaytay, under an
instalment term: 25% signing; 25%, 3 months or upon removal of the
encargado in the lots, and the delivery of the duplicate CT; 50%, 1Yr from
upon TCT; but if payment is late a 12% interest will accrue every year.
After payment of the 1st term, they demanded that the encargados be
removed, they also offered to do the 2nd term immediately after doing so.
PRs were unable, to wit, P sued for specific performance w/ damages. PR
denies, and argued that the contract did not state the true intention of P,
and that it wasnt their fault that the encargados wont leave, for which
they also sued said encargados, w/c was dismissed. CFI ordered PRs to
pay back w/ interest. CA affirmed in toto CFIs ruling, hence this.
I: WON Rescission was proper instead of specific performance.
R: Reversed, set aside. Reviewing the terms of the Deed of Sale quoted
earlier, it is clear that the parties had reached the stage of
perfection of the contract of sale, there being already "a meeting
of the minds upon the thing which is the object of the contract
and upon the price," (Art. 1475, Civil Code) and on the basis of
which both parties had the personal right to reciprocally demand
from the other the fulfillment of their respective obligations. But
contracts of sale may either be absolute or conditional. (Art. 1458, Civil
Code)
One form of conditional sales, is what is now popularly termed as a
"Contract to Sell," where ownership or title is retained until the
fulfillment of a positive condition, normally the payment of the
purchase price in the manner agreed upon. The breach of that
condition can prevent the obligation to convey title from
acquiring a binding force. (Roque v. Lapuz, 96 SCRA 741) Where the
condition is imposed, instead, upon the perfection of the contract, the

failure of such condition would prevent such perfection. (People's

Homesite and Housing Corporation v. Court of Appeals, 133 SCRA 777).
What we have here is a contract to sell for it is the transfer of ownership,
not the perfection of the contract that was subjected to a condition.
Ownership was not to vest in the buyers until full payment of the
purchase price and the transfer of the title to the buyers.
To summarize, we hold that there was no basis for rescinding the
contract because the removal of the "encargado" was not a
condition precedent to the contract of sale. Rather, it was one of
the alternative periods for the payment of the second installment
given by the seller himself to the buyers. Secondly, even granting
that it was indeed a condition precedent rendering necessary the
determination of the legal status of the "encargado," the lower courts
were rash in holding that the "encargado" was a tenant of the land in
question.

Filoil v. IAC & Pabalan / GR No. 67115 / 1.20.89 / Sales / CRUZ, J p:

F: PR sold his land to Villa Rey Transit (VRT & Villarama) on 12.22.71 for
140K, in instalments, VRT was issued with a new clean TCT w/o any
annotations, and said transferred appeared to be an ADS. On the same
day VRT mortgaged said land to P for 350k failing to pay said land was
foreclosed and to a public auction, P, the highest bidder, was awarded
with the TCT, duly annotated. PR suddenly sued VRT and Villarama
claiming that he is yet to be fully paid, praying for rescission. VRT
countered that they had all the right to mortgage because since a new
TCT was issued. Filoil defense was as an innocent purchaser. CFI ruled
infavor of PR, appealing to IAC which was affirmed, hence this (P is the
only one who petitioned in the SC).
I: WON there was no bad faith in the sales.
R: The sale was valid, but P should pay for atonement. The Court of
Appeals erred in holding that the contract of sale was subject to rescission
on the ground of noncompliance with one of its conditions, presumably
the payment of the purchase price, under Article 1191 of the said Code.
That ground was merely assumed and not established. In fact, it did not
exist at the time of the filing of the complaint. We find that the
petitioner, if not knowingly involved in the scheme to deceive
Pabalan, was at least negligent in not closely examining the facts
before accepting the land as security for the loan to Villa Rey
Transit.
Filoil must bear the consequences of its own omission. But more
than this, it must also share the blame for the injury suffered by
the private respondent, who now finds herself with neither the
disputed property nor the balance of the purchase price. Accordingly, we
hereby order the petitioner to pay the private respondent, in atonement
for its part in the impairment of her interests
We agree with the trial court, as sustained by the respondent court, that
Villarama acted with less than good faith and candor when he secured the
cancellation of the vendor's certificate of title and replaced it with one in
his name without even informing the complainant about it. Worse, he
thereafter mortgaged the property, also without her knowledge, and then,
to add insult to injury, also omitted to advise her that it had been sold at
public auction because he had defaulted in the payment of his mortgage
debt.

An instrument is not a contract to sell where title to the subject

land was transferred to the vendee as of the date of the
transaction notwithstanding that the purchase price had not yet
been fully paid at that time.

Servicewide Specialist Inc. v. IAC, Siton & Judge De Dumo / GR

No. 74553 / 6.8.89 / Sales / MEDIALDEA, J p:
F: PR bought a car for 25k (down payment remaining 68.4K), issuing a
promisory note that balance shall be paid in installments. Siton made a
promissory note to the car dealer, in addition, he mortgaged the same to
a Chattel Mortgage Car Traders Phils (CTP). The mortgage was assigned
by CTP to Filininvest, w/c in turn reassigned the same to P. PR was
advised. Alleging that PR failed to pay, P moved for a writ of replevin
(recovery of the chattel) or payment. De Dumo, claiming that he bought
the car from PR, claims that he paid regularly. CFI dismissed, and ordered
PRs to pay, P appealed to IAC, w/c affirmed in toto, hence this.
I: WON the sale of Sito to De Dumo was valid.
R: Reversed. Pay in Full w/ Interest. We cannot ignore the findings,
however, that before the sale, prompt inquiries were made by
private respondents with Filinvest Credit Corporation regarding
any possible future sale of the mortgaged property; and that it
was upon the advice of the company's credit lawyer that such a
verbal notice is sufficient and that it would be convenient if the
account would remain in the name of the mortgagor Siton. Even
the personal checks of de Dumo were accepted by petitioner as
payment of some of the instalments under the promissory note
(p. 92, Rollo). If it is true that petitioner has not acquiesced in
the sale, then, it should have inquired as to why de Dumo's
checks were being used to pay Siton's obligations. Based on the
foregoing circumstances, the petitioner is bound by its
predecessor company's representations. This is based on the
doctrine of estoppel.
The chattel mortgagor continues to be the owner of the property,
and therefore, has the power to alienate the same; however, he
is obliged under pain of penal liability, to secure the written
consent of the mortgagee. Thus, the instruments of mortgage are
binding, while they subsist, not only upon the parties executing
them but also upon those who later, by purchase or otherwise,
acquire the properties referred to therein. The absence of the
written consent of the mortgagee to the sale of the mortgaged
property in favor of a third person, therefore, affects not the
validity of the sale but only the penal liability of the mortgagor
under the Revised Penal Code and the binding effect of such sale on
the mortgagee under the Deed of Chattel Mortgage.

It is clear from the prayer of petitioner in its brief on appeal to the

appellate court that it had chosen the remedy of fulfillment when it asked
the appellate court to order private respondents to pay the remaining
unpaid sums under the promissory note. By having done so, it has
deemed waived the third remedy of foreclosure, and it cannot therefore
ask at the same time for a Writ of Replevin as preparatory remedy to
foreclosure of mortgage.
Traders Royal Bank v. CA, FGA, & CB / GR No. 93397 / 3.3.97 /
Sales Right to Transfer Ownership / TORRES, JR., J p:
F: On 11.27.79, Filriters (thru Alfredo Banaria) sold and transferred to
Philfinance CBCIs worth 3.5M. On 2.4.81, P repurchased CBCI D891 for
500k, the repurchase agreement stipulated that such will be repurchased
again from P for 519.3k on 4.27.81, w/c Philfinance failed to do because
the checks was dishonored. Because of this Philfinance executed a
Detached Assignment in favor of P, by which Philfinance transferred and
assigned all its rights & title in the said CBCI, and authorized CB to
transfer the same to P. When P went to CB for the issuance of a new
certificate for absolute ownership it was refused. CB holds that the
requirements arent complied with. Suing ensued, Filriters claimed the
ownership to be void, as such, the assignment was w/o authorization from
the board, purportedly for and in favor of Filriters, and ultimately it was
fictitious, and therefore void and inexistent, also, since such CBCI isnt a
negotiable instrument. CFI ruled in favor of CB, appealed in the CA
failed, hence this.
I: WON such instrument may be transferred, even though it isnt
a negotiable instrument.
R: Petition dismissed. The transfer made by Filriters to Philfinance
did not conform to the said Central Bank Circular, which for all
intents, is considered part of the law.
The language of negotiability which characterizes a negotiable paper as a
credit instrument is its freedom to circulate as a substitute for money.
This freedom in negotiability is totally absent in a certificate of
indebtedness as it merely acknowledges to pay a sum of money
to a specified person or entity for a period of time.
Petitioner, being a commercial bank, cannot feign ignorance of Central
Bank Circular 769, and its requirements. An entity which deals with
corporate agents within circumstances showing that the agents
are acting in excess of corporate authority, may not hold the

corporation liable. The unauthorized use or distribution of the

same by a corporate officer of Filriters cannot bind the said
corporation, not without the approval of its Board of Directors,
and the maintenance of the required reserve fund. Consequently,
the title of Filriters over the subject certificate of indebtedness must be
upheld over the claimed interest of Traders Royal Bank. Piercing the veil
of corporate entity requires the court to see through the protective
shroud which exempts its stockholders from liabilities that ordinarily, they
could be subject to or distinguishes one corporation from a seemingly
separate one, were it not for the existing corporate fiction. But to do
this, the court must be sure that the corporate fiction was
misused, to such an extent that injustice, fraud, or crime was
committed upon another, disregarding, thus, his, her, or its
rights. It is the protection of the interests of innocent third
persons dealing with the corporate entity which the law aims to
protect by this doctrine.
Bocaling & Co (P). v. R.S.V. Bonnevie (PR) / GR No. 86150 /
3.2.92 / Sales / Cruz, J p:
F: A land owned J.L. Reynoso, that was leased to Sps Bonnevie, by the
administratrix, of JL Reynoso: A.V. Reynoso; for 1 year @ 4K/month. In the
contract, stipulated is a first priority in favour of PR. On 11.3.76, Reynoso
notified PR by mail that she was selling @ 600k, and was given 30 days to
accept, and expects PR to vacate after. On 1.20.77 Reynoso adviced PRs
that the land was already sold. Upon receiving, PR denied receiving the
11.5.76 letter. On 3.7.77 said land was formally sold to P, giving 137.5K
and the rest, upon leaving of PR. On 4.12.77 Reynoso wrote to PR,
demanding that they vacate w/in 15D, for failing to pay rentals for 4
months, refusing, Reynoso sued for ejectment, after w/c a settlement was
reached that PR will vacate peacefully not later than 10.31.79, failing to
leave, Reynoso motioned for execution. PR demanded that receipts be
presented to argue their claim that they paid. PR then sued for annulment
of the sale to P, and asked that said property be sold to him. Ejectment
was granted, appealed City court ruled in favour of PR, affirmed by the
CA, hence this.
I: WON the sale to P may be Annulled.
R: Petition Denied. Under Article 1380 to 1381(3) of the Civil Code,
a contract otherwise valid may nonetheless be subsequently
rescinded by reason of injury to third persons, like creditors. The
status of creditors could be validly accorded the Bonnevies for they had

substantial interests that were prejudiced by the sale of the subject

property to the petitioner without recognizing their right of first priority
under the Contract of Lease.
We nevertheless agree with the observation of the respondent
court that: If Guzman-Bocaling failed to inquire about the terms
of the Lease Contract, which includes Par. 20 on priority right
given to the Bonnevies, it had only itself to blame. Having known
that the property it was buying was under lease, it behooved has
a prudent person to have required Reynoso or the broker to show
to it the Contract of Lease in which Par. 20 is contained.
Reynoso claimed to have sent the November 3, 1976 letter by registered
mail, but the registry return card was not offered in evidence. What she
presented instead was a copy of the said letter with a photocopy of only
the face of a registry return card claimed to refer to the said letter. A copy
of the other side of the card showing the signature of the person who
received the letter and the date of the receipt was not submitted. There is
thus no satisfactory proof that the letter was received by the Bonnevies.

PUP v. CA & Firestone Ceramics (Consolidated) / GR No(s).

143513&143590 / 11.14.01 / Sales / Bellosillo, J p:
F: To pre-empt the impending sale of the (National Devt Co.) NDC
compound to petitioner PUP, FIRESTONE filed an action for specific
performance to compel NDC to sell the leased property in its favor in the
exercise of its contractual right of first refusal. After trial, the lower court
and the CA held that FIRESTONE could exercise its option to purchase the
property until 2 June 1999 inasmuch as its lease contract with NDC dated
22 December 1978 embodied a covenant to renew the lease for another
ten (10) years at the option of FIRESTONE (the lessee) as well as an
agreement giving FIRESTONE the right of first refusal. On appeal,
petitioners claimed: that there was no consideration paid by FIRESTONE
to entitle it to the exercise of the right of first refusal; and that public
welfare or the constitutional priority accorded to education would greatly
be prejudiced. CFI and CA ruled in favour of Firestone, hence this.
I: WON there is a right of first refusal.
R: Dismissed. The right of first refusal is an integral and indivisible
part of the contract of lease and is inseparable from the whole
contract. The consideration for the right is built into the
reciprocal obligations of the parties. Thus, it is not correct for
petitioners to insist that there was no consideration paid by FIRESTONE to
entitle it to the exercise of the right, inasmuch as the stipulation is part
and parcel of the contract of lease making the consideration for the lease
the same as that for the option. It is a settled principle in civil law
that when a lease contract contains a right of first refusal, the
lessor is under a legal duty to the lessee not to sell to anybody at
any price until after he has made an offer to sell to the latter at a
certain price and the lessee has failed to accept it.
Education may be prioritized for legislative or budgetary purposes, but we
doubt if such importance can be used to confiscate private property such
as FIRESTONE's right of first refusal.

Rosencor Devt Co. & Joaquin v. Inquing et al. / GR No. 140479 /

3.8.01 / Sales / GONZAGA-REYES, J p:
F: PRs are leasing in a residential apartment owned by Sps Tiangco w/ no
contract. When Sps Tiangco died the heirs thru their administrator
Eufrocina de Leon, sent an offer to the lessees that the property is for sale
to them for 2M, PRs countered w/ 1M. Apparently, Sps Tiangco orally gave
the PRs the pre-emptive right to purchase the property. Eufrocina told PRs
that she will consult w/ the other heirs. In Nov. 1990 Rosencor (P) came to
the property and announced that he had already bought the land for
726K. PRs offered to buy said property back from P for 1M, which was
refused. PR sued for the annulment of the DOS. CFI ruled in favour of P,
CA reversed and ordered the rescission of the DOS. Hence this.
I: WON CA erred in ordering the rescission.
R: Reversed and Set Aside. The Court ruled that the appellate court erred
in ordering the rescission of the Deed of Absolute Sale between petitioner
Rosencor and the heirs of the spouses Tiangco thru Eufrocina de Leon. A
contract validly agreed upon may only be rescinded if it is undertaken in
fraud of creditors. In the case at bar, the right of first refusal involved was
an oral one given to respondents by the deceased spouses Tiangco and
subsequently recognized by their heirs. As such, in order to hold that
petitioners were in bad faith, there must be clear and convincing
proof that they were made aware of the said right of first refusal
either by the respondents or by the heirs of the spouses Tiangco.
The evidence on record, however, failed to show that petitioners
acted in bad faith in entering into the deed of sale over the
disputed property with the heirs of the spouses Tiangco.
Respondents, on the other hand, failed to present any evidence
that prior to the sale of the property on September 4, 1990,
petitioners were aware or had notice of the oral right of first
refusal.
The Court, however, made it clear that that its present ruling did
not mean that respondents are left without any remedy. Their
remedy is not an action for the rescission of the Deed of Absolute
Sale but an action for damages against the heirs of the spouses
Tiangco for the unjustified disregard of their right of first refusal.

State Investment v. CA, et al. / GR No. 115548 / 3.5.96 / Sales /

Francisco, J p:
F: 10.15.69, A contract to sell was executed by Sps Canuto & A. Oreta &
the solid homes, involving a land for 39.3K and the rest will be paid
monthly w/ interest. On 11.4.76 Solid executed several real estate
mortgage contracts in favour of P, including the one sold to Oreta. For
failure to pay P extra judicially foreclosed the properties. On 8.15.88
Oreta sued in the HLURB against P and Solid. HLURBs OALLA ruled in
favour of Oreta, ordering the execution of the contract. Solid and P
appealed to OP w/c was dismissed by the OP. Hence this.
I: WON the mortgage was valid.
R: Affirmed. It is a settled rule that a purchaser or mortgagee
cannot close its eyes to facts which should put a reasonable man
upon his guard, and then claim that he acted in good faith under
the belief that there was no defect in the title of the vendor or
mortgagor. Petitioner's constructive knowledge of the defect in the title
of the subject property, or lack of such knowledge due to its negligence,
takes the place of registration of the rights of respondents-spouses.
Respondent court thus correctly ruled that petitioner was not a
purchaser or mortgagee in good faith; hence petitioner cannot
solely rely on what merely appears on the face of the Torrens
Title.
In this case, petitioner was well aware that it was dealing with
SOLID, a business entity engaged in the business of selling subdivision
lots. In fact, the OAALA found that "at the time the lot was mortgaged,
respondent State Investment House, Inc., [now petitioner] had been
aware of the lot's location and that said lot formed part of Capital
Park/Homes Subdivision." In Sunshine Finance and Investment Corp.
v. Intermediate Appellate Court, the Court, noting petitioner
therein to be a financing corporation, deviated from the general
rule that a purchaser or mortgagee of a land is not required to
look further than what appears on the face of the Torrens Title.
The above-enunciated rule should apply in this case as petitioner admits
of being a financing institution. We take judicial notice of the uniform
practice of financing institutions to investigate, examine and
assess the real property offered as security for any loan
application especially where, as in this case, the subject property
is a subdivision lot located at Quezon City, M.M.

Sps David et al. v. A & G Tiongson / GR No. 108169 / 8.25.99 /

Sales / Pardo, J p:
F: On 2.23.89, 3 lots were sold by the PR to Sps Ventura, David & Vda De
Basco. The parties expressly agreed that the DOSs and CTs will be issued
upon their full payment. P then built a house on their lot, and managed to
fully pay (w/ receipts), and demanded the issuance of PRs DOS and CT, PR
refused. Suing ensued, CFI found PRs in default for failure to
answer. At the CA, PRs argued that P and the others have yet to
fully pay, hence they did not issue. CA found for P and Ventura that
there was no meeting of the minds.
I: WON there is a meeting of the minds as to validate the
contract.
R: Reversed. At any rate, we rule that there was a perfected
contract. However, the statute of frauds is inapplicable. The rule
is settled that the statute of frauds applies only to executory and
not to completed, executed, or partially executed contracts. In the
case of spouses David, the payments made rendered the sales contract
beyond the ambit of the statute of frauds. The Court of Appeals erred
in concluding that there was no perfected contract of sale.
However, in view of the stipulation of the parties that the deed of
sale and corresponding certificate of title would be issued after
full payment, then, they had entered into a contract to sell and
not a contract of sale.
We find that the 109 sq. m. lot was adequately described in the receipt, or
at least, can be easily determinable. The receipt issued on June 4, 1983
stated that the lot being purchased by Florencia was the one earlier
earmarked for her sister, Rosita Muslan. Thus, the subject lot is
determinable. Any mistake in the designation of the lot does not vitiate
the consent of the parties or affect the validity and binding effect of the
contract of sale. The receipt issued on September 1, 1983 clearly
described the lot area as 109 sq. m. It also showed that Florencia had
fully paid the purchase price.

Villanueva v. CA, Sps Dela Cruz & Sps Guido & Pile / GR No.
107624 / 1.28.97 / Sales / PANGANIBAN, J p:
F: P, is a tenant of PR, in 2.86 PR offered the lot and property, w/c P was
interested in. Said property is in arrears as to realty tax and it was
agreed that 10K will be advanced to PR to pay for the tax. PR then went
to P and discussed that a co-tenant (Mr. Sabio) would also like half of the
property, it was agreed. PR secured two CTs and Sabio immediately paid
for his part. On 3.6.87 PR executed in favour of PR Guido a DOA for the
part of P, apparently PR is in debt to PR Pili and said lot shall be the
payment. Suing ensued. CFI ruled in favour of PR, CA affirmed hence this.
I: The main issue here is whether a contract of sale has been
perfected.
R: Affirmed. The price must be certain, it must be real, not
fictitious. A contract of sale is not void for uncertainty when the
price, though not directly stated in terms of pesos and centavos,
can be made certain by reference to existing invoices identified
in the agreement. In this respect, the contract of sale is perfected. The
price must be certain, otherwise there is no true consent between the
parties. There can be no sale without a price. In the instant case,
however, what is dramatically clear from the evidence is that
there was no meeting of mind as to the price, expressly or
impliedly, directly or indirectly. Sale is a consensual contract. He
who alleges it must show its existence by competent proof. Here,
the very essential element of price has not been proven.
The civil law rule on double sale finds no application because there was
no sale at all to begin with. What took place was only a prolonged
negotiation to buy and to sell, and at most, an offer and a counter-offer
but no definite agreement was reached by the parties. Hence, the rules
on perfected contract of sale, statute of frauds and double sale find no
relevance nor application.

De Leon v. Salvador; Bernabe v. Cruz GR Nos. L-30871; L-31603

12.28.70 / Sales / Teehankee, J p:
F: In the original case (CFI Caloocan Branch of Judge Cruz), Enrique De
Leon obtained favorable decision against judgment debtor or respondent
Bernabe. By virtue of the favorable decision, two properties of Bernabe
were sold in auction. Petitioner De Leon won the auction. The one-year
redemption period lapsed without Bernabe redeeming the property, and
thus, a Certificate of Sale was issued in favor of De Leon.
In the meantime and before the expiration of the one year redemption
period, Bernabe filed a civil case against Enrique De Leon (judgment
creditor), Sheriff of Judge Cruz, and De Leon as the winning bidder on the
alleged irregularity during the auction sale, with another CFI Caloocan
Branch of Judge Salvador). Judge Salvador issued injunction order
enjoining the sale of the properties in favor of De Leon. Further, Judge
Bernabe issued an order to the Sheriff to allow Bernabe to redeem the
properties. Bernabe was able to obtain the titles again. Hence Petitioner
De Leon filed a case of certiorari on the orders issued by Judge Salvador.
One of the reasons alleged by Bernabe on the irregularity of the auction
sale is the inadequate price set during the auction.
I: WON the forced sale/execution is valid. Was the auction sale
invalid due to inadequacy of price?
R: As to the alleged inadequacy of price of Php30,194.00 when
the properties could have been sold for at least Php385,000.00 It
is not a ground to invalidate the auction sale in favor of De Leon.
General Rule: In ordinary sales, for reasons of equity in
transactions, the sale may be invalidated due to gross
inadequacy of price.
Exception: In case of Forced Sales (i.e. sale at public auction)
wherein the law gives the owner the right to redeem, the theory
is that the lesser the price, the easier for the owner to redeem
the property.
As to jurisdiction, the Judge Cruz's court has jurisdiction over the case
from excution sale upto the issuance of Sheriff's Certificate of Sale in
favor of the winning bidder/judgment creditor. Judge Salvador's court
cannot interfere with the orders of the Judge Cruz's court. They are of
equal level of courts and Judge Cruz's court acquired original jurisdiction
of the case.