GENERAL PRINCIPLES

1. VILLONCO REALTY COMPANY V BORMAHECO, INC.

2. ANG YU ASUNCION V COURT OF APPEALS
3. VDA. DE APE V COURT OF APPEALS

Facts:
Cleopas Ape was the registered owner of a parcel of land particularly known as Lot
No. 2319 of the Escalante Cadastre of Negros Occidental and covered by Original
Certificate of Title (OCT) No. RP 1379 (RP-154 [300]).[2] Upon Cleopas Apes death
sometime in 1950, the property passed on to his wife, Maria Ondoy, and their eleven
(11) children, namely: Fortunato, Cornelio, Bernalda, Bienvenido, Encarnacion,
Loreta, Lourdes, Felicidad, Adela, Dominador, and Angelina, all surnamed Ape.
GenerosaCawit de Lumayno (private respondent herein) instituted a case for
Specific Performance of a Deed of Sale with Damages against Fortunato and his wife
Perpetua (petitioner herein) before the then Court of First Instance of Negros
Occidental. It was alleged in the complaint that on 11 April 1971, private respondent
and Fortunato entered into a contract of sale of land under which for a
consideration of P5,000.00, Fortunato agreed to sell his share in Lot No. 2319 to
private respondent. The agreement was contained in a receipt prepared by private
respondents son-in-law, Andres Flores, at her behest.
Fortunato and petitioner denied the material allegations of the complaint and
claimed that Fortunato never sold his share in Lot No. 2319 to private respondent
and that his signature appearing on the purported receipt was forged.
For her part, petitioner insisted that the entire Lot No. 2319 had not yet been
formally subdivided;[15] that on 11 April 1971 she and her husband went to private
respondents house to collect past rentals for their land then leased by the former,
however, they managed to collect only thirty pesos;[16] that private respondent
made her (petitioners) husband sign a receipt acknowledging the receipt of said
amount of money;[17] and that the contents of said receipt were never explained to
them.[18] She also stated in her testimony that her husband was an illiterate and
only learned how to write his name in order to be employed in a sugar central.[19]
As for private respondents purchase of the shares owned by Fortunatos co-owners,
petitioner maintained that neither she nor her husband received any notice
regarding those sales transactions.

Issue:
Whether or not there is a perfected contract of sale?
Held:
A contract of sale is a consensual contract, thus, it is perfected by mere consent of
the parties. It is born from the moment there is a meeting of minds upon the thing
which is the object of the sale and upon the price.[52] Upon its perfection, the
parties may reciprocally demand performance, that is, the vendee may compel the
transfer of the ownership and to deliver the object of the sale while the vendor may
demand the vendee to pay the thing sold.[53] For there to be a perfected contract of
sale, however, the following elements must be present: consent, object, and price in
money or its equivalent.

To be valid, consent must meet the following requisites: (a) it should be intelligent,
or with an exact notion of the matter to which it refers; (b) it should be free and (c)
it should be spontaneous. Intelligence in consent is vitiated by error; freedom by
violence, intimidation or undue influence; spontaneity by fraud.[55]

In this jurisdiction, the general rule is that he who alleges fraud or mistake in a
transaction must substantiate his allegation as the presumption is that a person
takes ordinary care for his concerns and that private dealings have been entered
into fairly and regularly.[56] The exception to this rule is provided for under Article
1332 of the Civil Code which provides that [w]hen one of the parties is unable to
read, or if the contract is in a language not understood by him, and mistake or fraud
is alleged, the person enforcing the contract must show that the terms thereof have
been fully explained to the former.

In this case, as private respondent is the one seeking to enforce the claimed contract
of sale, she bears the burden of proving that the terms of the agreement were fully
explained to Fortunato Ape who was an illiterate. This she failed to do. While she
claimed in her testimony that the contents of the receipt were made clear to
Fortunato, such allegation was debunked by Andres Flores himself when the latter
took the witness stand

As can be gleaned from Floress testimony, while he was very much aware of
Fortunatos inability to read and write in the English language, he did not bother to
fully explain to the latter the substance of the receipt (Exhibit G). He even dismissed
the idea of asking somebody else to assist Fortunato considering that a measly sum
of thirty pesos was involved. Evidently, it did not occur to Flores that the document
he himself prepared pertains to the transfer altogether of Fortunatos property to his
mother-in-law. It is precisely in situations such as this when the wisdom of Article
1332 of the Civil Code readily becomes apparent which is to protect a party to a
contract disadvantaged by illiteracy, ignorance, mental weakness or some other
handicap.[58]
 In sum, we hold that petitioner is no longer entitled to the right of redemption under
Article 1632 of the Civil Code as Lot No. 2319 had long been partitioned among its
co-owners. This Court likewise annuls the contract of sale between Fortunato and
private respondent on the ground of vitiated consent.1

4. TORCUATOR V. BERNABE
Facts:
The subject of this action is Lot 17, Block 5 of the Ayala Alabang Village, Muntinlupa,
Metro-Manila, with an area of 569 square meters and covered by TCT No. S-79773.
The lower court found that the above parcel of land was purchased by the spouses
Diosdado and Lourdes Salvador (Salvadors, for short) from the developers of Ayala
Alabang subject, among others, to thefollowing conditions:–“It is part of the
condition of buying a lot in Ayala Alabang Village (a) that the lot buyer shall deposit
withAyala Corporation a cash bond (about P17,000.00 for the Salvadors) which
shall be refunded to him if he builds a residence thereon within two (2) years of
purchase, otherwise the deposit shall be forfeited, (b)architectural plans for any
improvement shall be approved by Ayala Corporation, and (c) no lot may be resold
by the buyer unless a residential house has been constructed thereon (Ayala
Corporation keeps theTorrens Title in their [sic] possession). Salvadors sold the
parcel of land to Bernabe spouses. Salvadors executed a special power of
attorneyauthorizing the Bernabes to construct a residential house on the lot and to
transfer the title in their names.Bernabes, on the other hand, without making any
improvement, contracted to sell the parcel of land to Torcuator spouses. Confronted
by the Ayala Alabang restrictions, the parties agreed to cause the sale between the
Salvadors and the Bernabes cancelled, in favor of (a) a new deed of sale from the
Salvadors directly to the Torcuators; (b) a new Irrevocable Special Power of
Attorney executed by the Salvadors tothe Torcuators in order for the latter to build
a house on the land in question; and (c) an IrrevocableSpecial Power of Attorney
from the Salvadors to the Bernabes authorizing the latter to sell, transfer andconvey,
with power of substitution, the subject lot.The deed of sale was never consummated
nor was payment on the said sale ever effected. Subsequently,Bernabes sold to
Angeles, a brother-in-law, however the document was not notarized. Torcuators
filed anaction against the Bernabes and Salvadors for Specific Performance or
Rescission with Damages. TCdismissed petition. CA also dismissed the appeal, ruling
that the sale between the Bernabes and theTorcuators was tainted with serious
irregularities and bad faith.
Issue:

WON the agreement is a contract to sell or a contract of sale.

Held:
The agreement is a contract to sell. Contract of sale- title passes to the buyer upon
delivery of the thing sold; Non-payment of the price is anegative resolutory
condition.Contract to sell- ownership is reserved in the seller and is not to pass until
the full payment of the purchase price is made; Full payment is a positive suspensive
condition.

The agreement imposed upon petitioners the obligation to fully pay the agreed
purchase price for the property; that ownership shall not pass to petitioners until
they have fully paid the price is implicit in the agreement. Salvadors did not execute
a deed of sale in favor of Torcuator, but a special power of attorney authorizing the
Bernabes to sell the property on their behalf, in order to afford the latter a measure
of protection that would guarantee full payment of the purchase price before any
deed of sale in favor of Torcuator was executed.Ayala Corporation retained title to
the property and the Salvador spouses were precluded from selling itunless a
residence had been constructed thereon. Had the agreement been a contract of sale,
the special power of attorney would have been entirely unnecessary as petitioners
would have had the right to compel the Salvadors to transfer ownership to them.The
special power of attorney does not contain the essential elements of the purported
contract and, more tellingly, does not even refer to any agreement for the sale of the
property. In any case, it was rendered virtually inoperable as a consequence of the
Salvadors’ adamant refusal to part with their title to the property.Petition denied.
CHARACTERISTICS

5. GAITE V FONACIER
Facts:
Gaite was appointed by Fonacier as attorney-in-fact to contract any party for the
exploration and development of mining claims. Gaite executed a deed of assignment
in favor of a single proprietorship owned by him. For some reasons, Fonacier
revoked the agency, which was acceded to by Gaite, subject to certain conditions,
one of which being the transfer of ores extracted from the mineral claims for
P75,000, of which P10,000 has already been paid upon signing of the agreement and
the balance to be paid from the first letter of credit for the first local sale of the iron
ores. To secure payment, Fonacier delivered a surety agreement with Larap Mines
and some of its stockholders, and another one with Far Eastern Insurance. When the
second surety agreement expired with no sale being made on the ores, Gaite
demanded the P65,000 balance. Defendants contended that the payment was
subject to the condition that the ores will be sold.

Issue:
Whether the sale is conditional or one with a period

Held:
The shipment or local sale of the iron ore is not a condition precedent (or
suspensive) to the payment of the balance of P65,000.00, but was only a suspensive
period or term. What characterizes a conditional obligation is the fact that its
efficacy or obligatory force (as distinguished from its demandability) is
subordinated to the happening of a future and uncertain event; so that if the
suspensive condition does not take place, the parties would stand as if the
conditional obligation had never existed.

A contract of sale is normally commutative and onerous: not only does each one of
the parties assume a correlative obligation (the seller to deliver and transfer
ownership of the thing sold and the buyer to pay the price),but each party
anticipates performance by the other from the very start. While in a sale the
obligation of one party can be lawfully subordinated to an uncertain event, so that
the other understands that he assumes the risk of receiving nothing for what he
gives (as in the case of a sale of hopes or expectations, emptio spei), it is not in the
usual course of business to do so; hence, the contingent character of the obligation
must clearly appear. Nothing is found in the record to evidence that Gaite desired or
assumed to run the risk of losing his right over the ore without getting paid for it, or
that Fonacier understood that Gaite assumed any such risk. This is proved by the
 fact that Gaite insisted on a bond a to guarantee payment of the P65,000.00, an not
only upon a bond by Fonacier, the Larap Mines & Smelting Co., and the company's
stockholders, but also on one by a surety company; and the fact that appellants did
put up such bonds indicates that they admitted the definite existence of their
obligation to pay the balance of P65,000.00.

The appellant have forfeited the right court below that the appellants have forfeited
the right to compel Gaite to wait for the sale of the ore before receiving payment of
the balance of P65,000.00, because of their failure to renew the bond of the Far
Eastern Surety Company or else replace it with an equivalent guarantee. The
expiration of the bonding company's undertaking on December 8, 1955
substantially reduced the security of the vendor's rights as creditor for the unpaid
P65,000.00, a security that Gaite considered essential and upon which he had
insisted when he executed the deed of sale of the ore to Fonacier.

STAGES

6. Ainza v Padua
Facts:

Sometime In April 1987, Ainza and her daughter Eugenia orally agreed that Ainza
pay P100k in exchange for half of the portion of Eugenia’s undivided conjugal
property (a lot located in QC). No Deed of Absolute Sale was executed. There was
physical delivery of the land through Concepcion’s other daughter (Natividad)
acting as atty-in-fact. Concepcion thereafter allowed Natividad and her husband
occupy the purchased portion of the land.

In 1994, Antonio caused the division of the lot into three (two were occupied by the
spouses), necessarily displacing Natividad. He also had each subdivision titled.
Antonio requested Natividad to vacate the premises. Antonio averred that his wife
only admitted of selling 1/3 of the property to Concepcion for which a receipt was
issued signed by Concepcion. The RTC ruled in favor of Concepcion. The CA reversed
the RTC ruling. CA explained that the property is conjugal hence the sale should
have been with Antonio’s consent.

Issue:
whether there was a valid contract of sale between Eugenia and Concepcion
Held:
In this case, there was a perfected contract of sale between Eugenia and Concepcion.
A contract of sale is perfected by mere consent, upon a meeting of the minds on the
offer and the acceptance thereof based on subject matter, price and terms of
payment. The records show that Eugenia offered to sell a portion of the property to
 Concepcion, who accepted the offer and agreed to pay P100,000.00 as
consideration. The contract of sale was consummated when both parties fully
complied with their respective obligations. Eugenia delivered the property to
Concepcion, who in turn, paid Eugenia the price of One Hundred Thousand Pesos
(P100,000.00), as evidenced by the receipt

KINDS OF SALE

7. McCullough v Berger
8. Dichoso v Roxas
9. Luzon Brokerage v Maritime building
10. Portic v Cristobal
11. Heirs of Jesus M Mascunana v Court of Appeals
12. Ursal v Court of Appeals
13. Carrascoso Jr. v Court of Appeals
14. QUiroga v Parsons Hardware
15. Ker v Lingad
16. Del Monte Phils v Aragones

ELEMENTS OF A CONTRACT OF SALE

17. Rodriguez v Mactal

18. Rubias V Batiller
19. Miguel v Catalino
20. Estate of Salvador Serra Serra v Heirs of Primitivo Hernaez
21. Mapalo v Mapalo
22. Martinez v Court of Appeals
23. Melliza v City of Iloilo
24. Villonco Realty Company v Bormaheco
25. Spouses Doromal Sr. and Salas v Court of Appeals
26. Goldenrod v Court of Appeals
27. De Leon v Salvador
28. Velasco v Court of Appeals

PERFECTION OF THE CONTRACT

29. Sanchez v Rigos