Acap v.

CA
Facts:
Felixberto Oruma sold his inherited land to Cosme Pido, which land is rented by
petitioner Teodoro Acap. When Cosme died intestate, his heirs executed a Declaration of
Heirship and Waiver of Rights in favor of private respondent Edy delos Reyes.
Respondent informed petitioner of his claim over the land, and petitioner paid the rental
to him in 1982. However in subsequent years, petitioner refused to pay the rental, which
prompted respondent to file a complaint for the recovery of possession and damages.
Petitioner averred that he continues to recognize Pido as the owner of the land, and that
he will pay the accumulated rentals to Pidos widow upon her return from abroad. The
lower court ruled in favor of private respondent.
Issues:
(1) Whether the Declaration of Heirship and Waiver of Rights is a recognized mode of
acquiring ownership by private respondent
(2) Whether the said document can be considered a deed of sale in favor of private
respondent
Held:
An asserted right or claim to ownership or a real right over a thing arising from a
juridical act, however justified, is not per se sufficient to give rise to ownership over the
res. That right or title must be completed by fulfilling certain conditions imposed by law.
Hence, ownership and real rights are acquired only pursuant to a legal mode or process.
While title is the juridical justification, mode is the actual process of acquisition or
transfer of ownership over a thing in question.
In a Contract of Sale, one of the contracting parties obligates himself to transfer the
ownership of and to deliver a determinate thing, and the other party to pay a price certain
in money or its equivalent. Upon the other hand, a declaration of heirship and waiver of
rights operates as a public instrument when filed with the Registry of Deeds whereby the
intestate heirs adjudicate and divide the estate left by the decedent among themselves as
they see fit. It is in effect an extrajudicial settlement between the heirs under Rule 74 of
the Rules of Court. Hence, there is a marked difference between a sale of hereditary
rights and a waiver of hereditary rights. The first presumes the existence of a contract or
deed of sale between the parties. The second is, technically speaking, a mode of
extinction of ownership where there is an abdication or intentional relinquishment of a
known right with knowledge of its existence and intention to relinquish it, in favor of
other persons who are co-heirs in the succession. Private respondent, being then a
stranger to the succession of Cosme Pido, cannot conclusively claim ownership over the
subject lot on the sole basis of the waiver document which neither recites the elements of
either a sale, or a donation, or any other derivative mode of acquiring ownership.
A notice of adverse claim is nothing but a notice of a claim adverse to the registered
owner, the validity of which is yet to be established in court at some future date, and is no
better than a notice of lis pendens which is a notice of a case already pending in court. It
is to be noted that while the existence of said adverse claim was duly proven, there is no
evidence whatsoever that a deed of sale was executed between Cosme Pido's heirs and
private respondent transferring the rights of Pido's heirs to the land in favor of private
respondent. Private respondent's right or interest therefore in the tenanted lot remains an
adverse claim which cannot by itself be sufficient to cancel the OCT to the land and title
the same in private respondent's name. Consequently, while the transaction between
Pido's heirs and private respondent may be binding on both parties, the right of petitioner
as a registered tenant to the land cannot be perfunctorily forfeited on a mere allegation of
private respondent's ownership without the corresponding proof thereof.

Toyota Shaw Inc. vs. Court of Appeals, and Sosa

244 SCRA 320
May 1995
FACTS:
Luna L. Sosa and his son, Gilbert, went to purchase a yellow Toyota Lite Ace from the
Toyota office at Shaw Boulevard, Pasig (petitioner Toyota) on June 14, 1989 where they
met Popong Bernardo who was a sales representative of said branch. Sosa emphasized
that he needed the car not later than June 17, 1989 because he, his family, and a
balikbayan guest would be using it on June 18 to go home to Marinduque where he will
celebrate his birthday on June 19. Bernardo assured Sosa that a unit would be ready for
pick up on June 17 at 10:00 in the morning, and signed the "Agreements Between Mr.
Sosa & Popong Bernardo of Toyota Shaw, Inc., a document which did not mention
anything about the full purchase price and the manner the installments were to be paid.
Sosa and Gilbert delivered the down payment of P100,000.00 on June 15, 1989 and
Bernardo accomplished a printed Vehicle Sales Proposal (VSP) No. 928 which showed
Sosas full name and home address, that payment is by "installment," to be financed by
"B.A.," and that the "BALANCE TO BE FINANCED" is "P274,137.00", but the spaces
provided for "Delivery Terms" were not filled-up.
When June 17 came, however, petitioner Toyota did not deliver the Lite Ace. Hence,
Sosa asked that his down payment be refunded and petitioner Toyota issued also on June
17 a Far East Bank check for the full amount of P100,000.00, the receipt of which was
shown by a check voucher of Toyota, which Sosa signed with the reservation, "without
prejudice to our future claims for damages." Petitioner Toyota contended that the B.A.
Finance disapproved Sosas the credit financing application and further alleged that a
particular unit had already been reserved and earmarked for Sosa but could not be
released due to the uncertainty of payment of the balance of the purchase price. Toyota
then gave Sosa the option to purchase the unit by paying the full purchase price in cash
but Sosa refused.
The trial court found that there was a valid perfected contract of sale between Sosa and
Toyota which bound the latter to deliver the vehicle and that Toyota acted in bad faith in
selling to another the unit already reserved for Sosa, and the Court of Appeals affirmed
the said decision.
ISSUE:
Was there a perfected contract of sale between respondent Sosa and petitioner Toyota?
COURT RULING:
The Supreme Court granted Toyotas petition and dismissed Sosas complaint for
damages because the document entitled Agreements Between Mr. Sosa & Popong
Bernardo of Toyota Shaw, Inc., was not a perfected contract of sale, but merely an
agreement between Mr. Sosa and Bernardo as private individuals and not between Mr.
Sosa and Toyota as parties to a contract.
There was no indication in the said document of any obligation on the part of Toyota to
transfer ownership of a determinate thing to Sosa and neither was there a correlative
obligation on the part of the latter to pay therefor a price certain. The provision on the
downpayment of P100,000.00 made no specific reference to a sale of a vehicle. If it was
intended for a contract of sale, it could only refer to a sale on installment basis, as VSP
No.928 executed on June 15, 1989 confirmed. The VSP also created no demandable right
in favor of Sosa for the delivery of the vehicle to him, and its non-delivery did not cause
any legally indemnifiable injury.

Polytechnic University of the Philippines vs Court of Appeals and Firestone

Ceramics
National Development Corporation vs Firestone Ceramics Inc.
[GR No. 143513 and 143590. November 14, 2001]
Facts:
Petitioner National Development Corp., a government owned and controlled corporation,
had in its disposal a 10 hectares property. Sometime in May 1965, private respondent
Firestone Corporation manifested its desire to lease a portion of it for ceramic
manufacturing business. On August 24, 1965, both parties entered into a contract of lease
for a term of 10 years renewable for another 10 years. Prior to the expiration of the
aforementioned contract, Firestone wrote NDC requesting for an extension of their lease
agreement. It was renewed with an express grant to Firestone of the first option to
purchase the leased premise in the event that it was decided "to dispose and sell the
properties including the lot..."
Cognizant of the impending expiration of the leased agreement, Firestone informed NDC
through letters and calls that it was renewing its lease. No answer was given. Firestone's
predicament worsened when it learned of NDC's supposed plans to dispose the subject
property in favor of petitioner Polytechnic University of the Philippines. PUP referred to
Memorandum Order No. 214 issued by then President Aquino ordering the transfer of the
whole NDC compound to the National Government. The order of conveyance would
automatically result in the cancellation of NDC's total obligation in favor of the National
Government.
Firestone instituted an action for specific performance to compel NDC to sell the leased
property in its favor.
Issue:
1. Whether or not there is a valid sale between NDC and PUP.
Ruling
A contract of sale, as defined in the Civil Code, is a contract where one of the parties
obligates himself to transfer the ownership of and to deliver a determinate thing to the
other or others who shall pay therefore a sum certain in money or its equivalent. It is
therefore a general requisite for the existence of a valid and enforceable contract of sale
that it be mutually obligatory, i.e., there should be a concurrence of the promise of the
vendor to sell a determinate thing and the promise of the vendee to receive and pay for
the property so delivered and transferred. The Civil Code provision is, in effect, a "catchall" provision which effectively brings within its grasp a whole gamut of transfers
whereby ownership of a thing is ceded for a consideration.
All three (3) essential elements of a valid sale, without which there can be no sale, were
attendant in the "disposition" and "transfer" of the property from NDC to PUP - consent
of the parties, determinate subject matter, and consideration therefor.
Consent to the sale is obvious from the prefatory clauses of Memorandum Order No. 214
which explicitly states the acquiescence of the parties to the sale of the property.
Furthermore, the cancellation of NDC's liabilities in favor of the National Government
constituted the "consideration" for the sale.
Manila Metal Container Corporation vs Philippine National Bank
[GR No. 166862, December 20, 2006]
Facts:
Petitioner was the owner of 8,015 square meters of parcel of land located in
Mandaluyong City, Metro Manila. To secure a P900,000.00 loan it had obtained from
respondent Philippine National Bank, petitioner executed a real estate mortgage over the
lot. Respondent PNB later granted petitioner a new credit accommodation. On August 5,
1982, respondent PNB filed a petition for extrajudicial foreclosure of the real estate
mortgage and sought to have the property sold at public auction. After due notice and
publication, the property was sold at public action where respondent PNB was declared
the winning bidder. Petitioner sent a letter to PNB, requesting it to be granted an

extension of time to redeem/repurchase the property. Some PNB personnel informed 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 PNB.
Meanwhile, the Special Asset Management Department (SAMD) had prepared a
statement of account of petitioners obligation. It also recommended the management of
PNB to allow petitioner to repurchase the property for P1,574,560.oo. PNB rejected the
offer and recommendation of SAMD. It instead suggested to petitioner to purchase the
property for P2,660,000.00, in its minimum market value. Petitioner declared that it had
already agreed to SAMDs offer to purchase for P1,574,560.47 and deposited a
P725,000.00.
Issue:
Whether or not petitioner and respondent PNB had entered into a perfected contract for
petitioner to repurchase the property for respondent.
Ruling:
The SC affirmed the ruling of the appellate court that there was no perfected contact of
sale between the parties.
A contract is meeting of minds between two persons whereby one binds himself, with
respect to the other, to give something or to render some service. Under 1818 of the Civil
Code, there is no contract unless the following requisites concur:
1. Consent of the contracting parties;
2. Objection certain which is the subject matter of the contract;
3. Cause of the obligation which is established.
Contract is perfected by mere consent which is manifested by the meeting of the offer
and the acceptance upon the thing and causes which are to constitute the contract. Once
perfected, the bind between other contracting parties and the obligations arising
therefrom have the form of law between the parties and should be complied in good faith.
The absence of any essential element will negate the existence of a perfected contract of
sale.
The court ruled in Boston Bank of the Philippines vs Manalo:
A definite agreement as to the price is an essential element of a binding agreement to
sell personal or real property because it seriously affects the rights and obligations of the
parties. Price is an essential element in the formation of a binding and enforceable
contract of sale. The fixing of the price can never be left to the decision of one of the
contracting parties. But a price fixed by one of the contracting parties, if accepted by the
other, gives rise to a perfected sale.
In the case at bar, the parties to the contract is between Manila Metal Container
Corporation and Philippine National Bank and not to Special Asset Management
Department. Since the price offered by PNB was not accepted, there is no contract.
Hence it cannot serve as a binding juridical relation between the parties.
SAN MIGUEL PROPERTIES PHILS., INC. v SPOUSES ALFREDO and GRACE
HUANG, G. R. No. 137290, 31 July 2000
Nature of the Case: A petition for review for a decision of the Court of Appeals which
reversed the decision of the RTC dismissing the complaint brought by the Huangs against
San Miguel Properties for enforcement of a contract of sale.
Facts: San Miguel Properties offered two parcels of land for sale and the offer was
made to an agent of the respondents. An earnest-deposit of P1 million was offered by
the respondents and was accepted by the petitioners authorized officer subject to certain
terms.
Petitioner, through its executive officer, wrote the respondents lawyer that because ethe
parties failed to agree on the terms and conditions of the sale despite the extension
granted by the petitioner, the latter was returning the earnest-deposit.

The respondents demanded execution of a deed of sale covering the properties and
attempted to return the earnest-deposit but petitioner refused on the ground that the
option to purchase had already expired.
A complaint for specific performance was filed against the petitioner and the latter filed a
motion to dismiss the complaint because the alleged exclusive option of the
respondents lacked a consideration separate and distinct from the purchase price and was
thus unenforceable; the complaint did not allege a cause of action because there was no
meeting of the mind between the parties and therefore the contact of sale was not
perfected.
The trial court granted the petitioners motion and dismissed the action. The respondents
filed a motion for reconsideration but were denied by the trial court. The respondents
elevated the matter to the Court of Appeals and the latter reversed the decision of the trial
court and held that a valid contract of sale had been complied with.
Petitioner filed a motion for reconsideration but was denied.
Issue: WON there was a perfected contract of sale between the parties
Ruling: The decision of the appellate court was reversed and the respondents complaint
was dismissed.
Ratio Decidendi: It is not the giving of earnest money , but the proof of the concurrence
of all the essential elements of the contract of sale which establishes the existence of a
perfected sale.
The P1 million earnest-deposit could not have been given as earnest money because at
the time when petitioner accepted the terms of respondents offer, their contract had not
yet been perfected. This is evident from the following conditions attached by respondents
to their letter.
The first condition for an option period of 30 days sufficiently shows that a sale was
never perfected. As petitioner correctly points out, acceptance of this condition did not
give rise to a perfected sale but merely to an option or an accepted unilateral promise on
the part of respondents to buy the subject properties within 30 days from the date of
acceptance of the offer. Such option giving respondents the exclusive right to buy the
properties within the period agreed upon is separate and distinct from the contract of sale
which the parties may enter. All that respondents had was just the option to buy the
properties which privilege was not, however, exercised by them because there was a
failure to agree on the terms of payment. No contract of sale may thus be enforced by
respondents.
Even the option secured by respondents from petitioner was fatally defective. Under the
second paragraph of Art. 1479, an accepted unilateral promise to buy or sell a
determinate thing for a price certain is binding upon the promisor only if the promise is
supported by a distinct consideration. Consideration in an option contract may be
anything of value, unlike in sale where it must be the price certain in money or its
equivalent. There is no showing here of any consideration for the option. Lacking any
proof of such consideration, the option is unenforceable.
Equally compelling as proof of the absence of a perfected sale is the second condition
that, during the option period, the parties would negotiate the terms and conditions of the
purchase. The stages of a contract of sale are as follows: (1) negotiation, covering the
period from the time the prospective contracting parties indicate interest in the contract to
the time the contract is perfected; (2) perfection, which takes place upon the concurrence
of the essential elements of the sale which are the meeting of the minds of the parties as
to the object of the contract and upon the price; and (3) consummation, which begins
when the parties perform their respective undertakings under the contract of sale,
culminating in the extinguishment thereof.

In the present case, the parties never got past the negotiation stage. The alleged
indubitable evidence of a perfected sale cited by the appellate court was nothing more
than offers and counter-offers which did not amount to any final arrangement containing
the essential elements of a contract of sale. While the parties already agreed on the real
properties which were the objects of the sale and on the purchase price, the fact remains
that they failed to arrive at mutually acceptable terms of payment, despite the 45-day
extension given by petitioner.