CARBONELL VS CA The buyer of realty must act in good faith in GOOD FAITH FOR VALUE PROTECTED BY actually own
ALUE PROTECTED BY actually own the property. However, the
DOUBLE SALE
FIRST BUYER IN GOOD FAITH WITH
SUPERIOR RIGHT OVER PROPERTY
PONCIO ! MORTGAGE TO RSB ! SOLD
TO CARBONELL ! PONCIO SOLD TO
INFANTE ! CARBONELL REGISTERED !
INFANTE REGISTERED 4 DAYS AFTER
CARBONELL = BETTER RIGHT =
REGISTRANT IN GF
DAGUPAN TRADING VS MACAM
DOUBLE SALE
CONFLICTING SALES; ONE SALE BEFORE
REGISTRATION OF LAND AND THE OTHER
AN EXECUTION SALE AFTER
REGISTRATION OF LAND; LAW
GOVERNING.
UNREGISTERED SALE CANNOT BE
DEFEATED BY SUBSEQUENT EXECUTION
SALE AND REGISTRATION OF LATTER.
MACAM = BETTER RIGHT
SOLD TO MACAM ! LEVIED IN PUBLIC
AUCTION FOR CC OF MARON ! SOLD TO
DAGUPAN ! REGISTERED (???)
DAVID VS BANDIN
DOUBLE SALE
UNREGISTERED LAND; DEFENSE OF
BUYER IN GOOD FAITH CANNOT BE
AVAILED IN PURCHASES OF
UNREGISTERED LAND
REGISTERED LAND; PURCHASER IN
  © Michelle Duguil
registering his deed of sale to merit the
protection of the second paragraph of Article
1544 of the New Civil Code. Where the first
buyer was not aware - and could not have been
aware - of any sale to another person as there
was no such sale, the buyer's prior purchase of
the land was made in good faith. The
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.
Where one of two conflicting sales of a piece of
land was executed before the land was
registered, while the other was an execution
sale in favor of the judgment creditor of the
owner made after the same property had been
registered, what should determine the issue are
the provisions of the last paragraph of Section
35, Rule 39 of the Rules of Court to the effect
that, upon the execution and delivery of the
final certificate of sale in favor of the purchaser
of land sold in an execution sale, such
purchaser "shall be substituted to and acquire
all the rights, title, interest and claim of the
judgment debtor to the property as of the time
of the levy".
Where for a considerable time prior to the levy
on execution the interest of the owner of the
land levied upon had already been conveyed to
another who took possession thereof and
introduced improvements therein, the aforesaid
levy is void. The prior sale, albeit unregistered,
cannot be deemed automatically cancelled
upon the subsequent issuance of the Torrens
title over the land.
The defense of having purchased the property
in good faith may be availed of only where
registered land is involved and the buyer had
relied in good faith on the clear title of the
registered owner. One who purchases an
unregistered land does so at his peril. His claim
of having bought the land in good faith, i.e.
without notice that some other person has a
right to, or interest in, the property, would not
protect him if it turns out that the seller does not
THE LAW; ABSENT ANY SHOWING OF
ACTUAL NOTICE OF DEFECT IN TITLE,
SALE AND TITLE CANNOT BE CANCELLED
SUMMARY:
1. GR NO. L-49716 ! X SUSTAIN DEFENSE
OF LACHES AND PRESCRIPTION = CO-
OWNERSHIP X TERMINATED = DENIED
2. GR No. L-48322 ! UNREGISTERED
LAND = X DEFENSE OF GF = DENIED
3. GR NO. L-49867 = UNREGISTERED LAND
= GF/BF = X ESSENTIAL ! X ENTITLED TO
PROTECTION = DENIED
4. GR NO. L-49712 – ESPESYAAAL!
REGISTERED LAND = IN GF = PROTECTED
= GRANTED
OLIVARES VS. GONZALES
DOUBLE SALE
CONSOLIDATION CASE
QUIETING OF TITLE CASE
OLIVARESES = DEED OF ABSOLUTE SALE
REGISTERED IN OLIVARESES FAVOR ! X
IMPLEADED AS PARTIES = SHOULD BE
HEARD BEFORE ADJUDICATION OF
OWNERSHIP
CARAM VS LAURETA
DOUBLE SALE
st
1 SALE: MATA TO LAURETA (x registered)
nd
2 SALE: MATA TO CARAM (registered)
LAURETA PREVAILS!
CARAM = IN BF = KNEW OF THE FIRST
SALE = NO REGISTRATION AT ALL
purchaser who relies on the clean title of the
registered owner is protected if he is a
purchaser in good faith for value. In the
absence of a showing that he had actual notice
of the defect in the title of the vendors or that
he is a buyer in bad faith, the deed of sale in
his favor and the corresponding certificate of
title issued in his name cannot be nullified and
cancelled.
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
double sale, the principle of prius tempore,
patior jure enunciates that the good faith of the
first buyer remains all throughout despite his
subsequent acquisition of knowledge of the
subsequent sale. Knowledge by the first buyer
of the second sale cannot defeat the first
buyer’s right except when the second buyer
registers first in good faith the second sale.
One who purchases real estate with knowledge
of a defect or lack of title in his vendor cannot
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. Article 1544 does not declare void a
deed of sale registered in bad faith; it does not
mean, however, that the said contract is not
void. The law on double sale applies only to
immovable properties sold by the owner

CRUZ VS CABANA
DOUBLE SALE
FIRST SALE: SPOUSES LEGASPI (X able to
register at once because it was still in
possession of PNB as mortgagee)
SECOND SALE: ABELARDO CRUZ = IN BF
! KNEW OF THE FIRST SALE = X
CONTINUING GF
VALDEZ VS CA
DOUBLE SALE
MANUELA ! ATTY. ANTE ! OFFERED TO
VIERNES (DECLINED) ! PURCHASED BY
SPOUSES VALDES & REGISTERED
ADVERSE CLAIM ! BWISIT ANTE
EXECUTED DEED OF ASSIGNMENT IN
FAVOR OF VIERNES & REGISTERED (pero
after na mag-register ni SV ng AC nila) !
SINGIT KONTI SI DR. GARMA NA MAY
HAWAK NG OCDT
  © Michelle Duguil
himself. The status of the 2 contracts must be
determined and clarified-one must be declared
valid so that one vendee may exercise all rights
of an owner while the other contract must be
declared void to cut off all rights which may
arise from the said contract.
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 notwithstanding 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. Knowledge of a prior transfer of
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
In a case where a notice of adverse claim was
registered previous to the sale by the
possessor, 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.
NUGUID VS CA
DOUBLE SALE
SALE OF IMMOVABLE PROPERTY TO
DIFFERENT VENDEES; OWNERSHIP
BELONGS TO VENDEE WHO FIRST
RECORDED THE SALE
RECONVEYANCE; NOT POSSIBLE WHERE
PROPERTY WAS TRANSFERRED TO AN
INNOCENT PURCHASER FOR VALUE
SPOUSES DELA ROSA (+) ! SALAZAR
(NOT REGISTERED) ! DORAY DELA ROSA
(occupant of the land) SOLD IT TO SPOUSES
NUGUID ! REGISTERED IN RD
SPOUSES NUGUID PREVAIL = IN GF
RADIO WEALTH FINANCE CO. VS PALILEO
DOUBLE SALE
SPOUSES CASTRO ! SOLD TO PALILEO
(UNREGISTERED LAND) ! CIVIL CASE
AGAINST CASTRO ! LEVIED + PUBLIC
AUCTION + SOLD TO RFC + RECORDED !
PALILEO QUIETING OF TITLE
PALILEO HAS BETTER RIGHT!
TANEDO VS CA
DOUBLE SALE
LAZARO ! DEED OF ABSOLUTE SALE IN
FAVOR OF RICARDO ! AFFIDAVIT OF
CONFORMITY ! PERO NABENTA RIN
PALA SA HEIRS OF LAZARO
RICARDO TANEDO = FIRST REGISTRANT
IN GF
Although 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. An innocent purchaser for value is
protected such that when land has already
passed into the hands of an innocent purchaser
for value, reconveyance of the same can no
longer be made.
A person dealing with registered land is not
required to go behind the register to determine
the condition of the property. He is only
charged with notice of the burdens on the
property which are noted on the face of the
register or certificate of title. However, Article
1544 does not apply where the second buyer
acquires the unregistered land at an execution
sale, even if he was ignorant of the prior sale
made by his judgment debtor in favour of the
first buyer. The purchaser of an unregistered
land at a sheriff’s execution sale only steps in
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
Ownership shall belong to the buyer who in
good faith registers it first in the registry of
property. As between two purchasers, the one
who registered the sale in his favor has a
preferred right over the other who has not
registered his title, even if the latter is in actual
possession of the immovable property. When
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,

SPOUSES TOMAS AND SILVINA OCCENA
VS ESPONILLA
DOUBLE SALE
TORDESILLAS SPOUSES ! HAROD,
ANGELA, ARNOLD, LILIA ! HEIRS
EXECUTED DEED OF PACTO DE RETRO
SALE IN FAVOR OF ALBERTA MORALES !
MORALES POSSESSED + CONSTRUCTED
HOUSE + CARETAKER ! ARNOLD AND
ANGELA, W/O KNOWLEDGE OF ALBERTA
EXECUTED DEED OF EXTRAJUDICIAL
SETTLEMENT = SOLE CO-OWNERS !
ARNOLD EXECUTED AFFIDACIT OF
SETTLEMENT OF ESTATE DECLARING
HIMSELF AS SOLE HEIR OF ANGELA !
ARNOLD USED OCT TO SUBDIVIDE LOT !
ARNOLD SOLD LOT (INCLUDING
MORALES’ LOT) TO OCCENA ! HEIRS
FILED CASED AGAINST OCCENA SAYING
HE IS IN BF
MOLES VS IAC
IMPLIED WARRANTY
LINOTYPE PRINTING MACHINE
“IN A-1 CONDITION” = ✓ EXPRESS
WARRANTY = ✓ BOUND BY EXPRESS
WARRANTY
SECONDHAND MACHINE
✓REDHIBITORY DEFECT = ✓ RESCISSION
OF CONTRACT
ENGINEERING AND MACHINERY CORP VS
CA & ALMEDA
PRESCRIPTION OF WARRANTY
  © Michelle Duguil
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.”
Mere registration is not enough; good faith
must concur with registration. To be entitled to
priority, the second purchaser must also have
acted in good faith-one without knowledge of
the previous alienation by the vendor to
another or must not have been aware of the
facts which should put him upon inquiry to
acquaint him with the defect or lack of title of
his vendor. Should he find out such
circumstances, it would be incumbent upon him
to verify the extent of the occupant’s
possessory rights. Failure to take precautionary
steps would mean negligence on his part and
would preclude him from claiming or invoking
the rights of a purchaser in good faith.
GR: It 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.
E: 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 effect must be an
imperfection or defect of such nature as to
engender a certain degree of importance in
order to warrant the rescission of the contract.
The remedy against violations of the warranty
against hidden defects is either to withdraw
from the contract (redhibitory action) or to
demand a proportionate reduction of the price
AIRCONDITIONING SYSTEM = DEFECTIVE
CONTRACT FOR PIECE OF WORK
10 YEAR PRESCRIPTIVE PERIOD
CATUNGAL VS RODRIGUEZ
CONDITIONS AND WARRANTIES
CONDITIONAL DEED OF SALE
ROAD RIGHT OF WAY
X PURELY POTESTATIVE (X PURELY
DEPENDENT ON RODRIGUEZ) = ✓ MIXED
CONDITION
JM TUASON & CO INC VS CA
WARRANTY AGAINST EVICTION AND
DAMAGES
COMPROMISE AGREEMENT
WARRANTY AGAINST EVICTION = DE
LEONS X ENTITLED BEC THEY WERE NOT
SHOWN TO BE IN GF
RIVERA = PRIOR RIGHT = WON IN THE
SUIT
TUASON INC = SELLER IN GF
SONNY LO VS KJS ECO-FARM WORK
SYSTEM PHIL
WARRANTY-ASSIGNMENT OF CREDIT
(accion quanti minoris), with damages in either
case. Actions "upon a written contract"
prescribe in ten (10) years. The mere fact that
the employer accepted the work does not, ipso
facto, relieve the petitioner from liability for
deviations from and violations of the written
contract, as the law gives him ten (10)years
within which to file an action based on breach
thereof.
From the moment the contract is perfected, the
parties are bound not only to the fulfillment of
what has been expressly stipulated but also to
all the consequences which, according to their
nature, may be in keeping with good faith,
usage and law. In accordance with Article 1545
of the Civil Code, one must distinguish: failure
to comply with a condition imposed on the
perfection of a contract results in the failure of
the contract while failure to comply with a
condition imposed merely on the performance
of an obligation merely gives the other party the
option to either refuse to proceed with the sale
or to waive the condition. Moreover, where the
so-called 'potestative condition' is imposed not
on the birth of the obligation but on its
fulfillment, only the condition is avoided, leaving
unaffected the obligation itself
It is a requisite that the vendee himself must
not be guilty of bad faith in the execution of the
sake. If he knew of the defect in the title at the
time of the sale, or had known of the facts
which should have put him in inquiry and
investigation as may be necessary to acquaint
him with the defects in the title of the vendor,
he cannot claim that the vendor has warranted
his legal and peaceful possession of the
property sold on the theory that he proceeded
with the sale with the assumption of the danger
of eviction. He is not entitled to the warranty
against eviction nor entitle to the recovery of
damages.
An assignment of credit, which is in the nature
of a sale of personal property, produces the
effects of dacion en pago which may extinguish
the obligation. Article 1628 opines that the
vendor in good faith shall be responsible for the
SCAFFOLDING EQUIPMENT
DEED OF ASSIGNMENT OF CREDIT !
SONNY FAILED TO COMPLY WITH
WARRANTIES OF THE OBLIGATION AND
BREACHED HIS OBLIGATION = X
EXTINGUISH OBLIGATION = STILL LIABLE
TO PAY AMOUNT OF INDEBTEDNESS
VENDOR OR ASSIGNOR WARRANTS THE
EXISTENCE AND LEGALITY OF THE
CREDIT AT TIME OF SALE OR
ASSIGNMENT
RAMOS VS CA
CONVENTION REDEMPTION- EQUITABLE
MORTGAGE
ADEILA (PR) and OSCAR (PETITIONER) –
MAGKAPATID
ADELAIDA BORROWED MONEY FROM
OSCAR
HAWAII TRIP
SECURITY FOR LOAN ! EXECUTED 2
DEEDS OF CONDITIONAL SALE
FAILED TO EXERCISE RIGHT OF
REDEMPTION ! PETITION FOR
CONSOLIDATION ! GRANTED
DEED OF CONDITIONAL SALE CON PACTO
DE RETRO = EQUITABLE MORTGAGE
1. Adelaida remained in possession
2. Used as security for the loan
3. Price of the property is actually the
amount of loan of Adelaida
4. Oscar never had it declared for
taxation purposes in his name
EQUITABLE MORTGAGE; PRESUMPTION
UNDER ART. 1602 OF THE CIVIL CODE;
EXISTENCE OF ANY ONE CIRCUMSTANCE
SUFFICIENT
DE LEON VS SALVADOR
EQUITABLE MORTGAGE
  © Michelle Duguil
existence and legality of the credit at the time
of the sale, unless it should have been sold as
doubtful; but not for the solvency of the debtor,
unless it has been so expressly stipulated or
unless the insolvency was prior to the sale and
of common knowledge. The vendor/assignor is
bound to warrant the existence and legality of
the credit of the time of the sale or assignment.
By warranting the existence of the credit, the
vendor should be deemed to have ensured the
performance in case the credit is later found to
be inexistent. He should be liable to pay the
vendee the amount of his indebtednes
Since sales with right to repurchase are not
favoured, such are instead construed to be
equitable mortgages. To create the
presumption enunciated by Article 1602, the
existence of one circumstance is enough.
Where contracts purporting to be pacto de
retros were actually executed in consideration
of the aforesaid loans, said contracts are
indubitably equitable mortgages. The rule is
firmly settled that whenever it is clearly shown
that a deed of sale with pacto de retro, regular
on its face, is given as security for a loan, it
must be regarded as an equitable mortgage.
More so, 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.
While in ordinary sales for reasons of equity a
transaction may be invalidated on the ground of
inadequacy of price, or when such inadequacy
shocks one's conscience as to justify the courts
EXECUTION SALE ! INADEQUACY OF
PRICE = IMMATERIAL
FLORES VS SO
EFFECTIVITY OF NCC – CONVENTIONAL
REDEMPTION PROVISION
FLORES IS THE ABSOLUTE OWNER
OLD CIVIL CODE APPLIES – THE
OWNERSHIP WAS CONSOLIDATED IN THE
BUYER A RETRO BY OPERATION OF LAW
REGISTRATION OF THE CONSOLIDATION
OF OWNERSHIP IN THE BUYER A RETRO
ONLY BY JUDICIAL ORDER = X APPLIES
ALONZO VS IAC
WRITTEN NOTICE – LEGAL REDEMPTION
X STRICT INTERPRETATION OF THE LAW
WRITTEN NOTICE X REQUIRED, ACTUAL
NOTICE IS SUFFICIENT IN THIS CASE
LIVED ON THE SAME LOT, CLOSE
FRIENDS AND NEIGHBORS, ERECTION OF
SEMI-CONCRETE HOUSE
REDEMPTION PERIOD FROM ONE MONTH
THEY WERE NOTIFIED IN WRITING =
EXPIRED ALREADY = X ALLOWED TO
REDEEM
PACTO DE RETRO SALE; EXCEPTION TO
THE GENERAL RULE ADOPTED IN CASE
AT BAR
to interfere, such does not follow when the law
gives to the owner the right to redeem, as when
a sale is made at public auction, upon the
theory that the lesser the price the easier it is
for the owner to effect the redemption. When
there is the right to redeem, inadequacy of
price should not be material, because the
judgment debtor may reacquire the property or
also sell his right to redeem and thus recover
the loss he claims to have suffered by reason
of the price obtained at the auction sale.
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 thereof 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. Articles
1606 and 1607 of the new Civil Code which
require registration of the consolidation of
ownership in the vendee a retro only by judicial
order, do not apply.
Under Article 1623, the right of legal pre-
emption or redemption shall not be exercised
except within thirty days from the notice in
writing by the prospective vendor, or by the
vendors, as the case may be. The deed of sale
shall not be recorded in the Registry of
Property, unless accompanied by an affidavit of
the vendor that he has given written notice
thereof to all possible redemptioners. An
exception to the mandatory written rule is when
the co-heirs only brought an action for
redemption of hereditary right sold by another
co-heir only after so many years, after having
actual knowledge thereof, by their actuations,
with other circumstances such as being
neighbors with the purchaser. 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,

LAO VS CA
EQUITABLE MORTGAGE
MANALO CANNOT EJECT LAO
CONTRACT = EQUITABLE MORTGAGE
MANALO = MERE MORTGAGEE = X EJECT
LAO
LANUZA VS DE LEON
EQUITABLE MORTGAGE – PACTUM
COMMISSORIUM
2 STOREY HOUSE
DOCUMENT OF SALE WITH RIGHT TO
REPURCHASE – 3 MONTHS
st
LANUZA ! MARIA AND AURELIA (1 –
DOCUMENT OF SALE WITH RIGHT OF
REPURCHASE) = EQUITABLE MORTGAGE
LANUZA ! DE LEON
nd
(2 – MORTGAGE) = BETTER RIGHT
UPON FAILURE TO PAY THE REPURCHASE
PRICE, THE RIGHT TO REPURCHASE
SHALL BE FORFEITED AND THE
OWNERSHIP SHALL AUTOMATICALLY
PASS TO MARIA = PACTUM
COMMISSORIUM = NULLITY
CAPULONG VS CA
EQUITABLE MORTGAGE – SECURITY FOR
LOAN
CAPULONG GRANTED SEVERAL LOANS
TO TOLENTINO ! SECURED BY
MORTGAGE ON PROPERTY ! CAPULONG
FAILED TO LIQUIDATE MORTGAGE !
  © Michelle Duguil
but the party neglects to make it, he will be
chargeable with laches, the same as if he had
known the facts.
Existence of one of the circumstances under
Article 1602 is enough to purport a pactode
retro sale to be one of equitable mortgage. In
the case at bar, the vendor remained in
possession of the property as a beneficial
owner before, during and after the alleged sale;
there was extension of the period of
redemption (in fact, this was done twice); and
that the vendors were in ‘dire need of money’
which led them to mortgage their property.
Given such circumstances, the contract was
held to be one of equitable mortgage.
The stipulation in deed denominated by the
parties as a "Deed of Sale With Right to
Repurchase" to the effect that if the vendor fails
to pay the amount agreed upon within the
stipulated period, his right to repurchase the
property shall be forfeited and the ownership
over the same would automatically pass to the
vendee without need of court intervention, is
contrary to the nature of a true pacto de retro
sale, under which a vendee acquires ownership
of the thing sold immediately upon execution of
the sale, subject only to the vendor's right of
redemption. Since pacto commissorium is
contrary to law, such contract is deemed to be
an equitable mortgage. Also, preference of
mortgage credits is determined by the priority
of registration of the mortgages, following the
maxim “prior tempore potior jure".
In practically all of the so-called contracts of
sale with right of repurchase, the real intention
of the parties is that the pretended purchase
price is money loaned and in order to secure
the payment of the loan, a contract purporting
to be a sale with pacts de retro is drawn up. If
the transaction is an absolute sale of property,
particularly land, the vendee would ordinarily
assume immediate possession after the
OFFERED TO SELL PROP TO TOLENTINO
! NOTARIZED ABSOLUTE DEED OF SALE
st
WAS EXECUTED (1 document) !
ANOTHER DOCUMENT WHEREIN
CAPULONG WITH OPTION TO PURCHASE
nd
PROPERTY (2 document) ! CAPULONG
X EXERCISE OPTION ! SOLD TO
SPOUSES TOLENTINO
SOLID HOMES INC VS CA
CONTRACT OF SALE WITH PACTO DE
RETRO
SH LOANED FROM SF ! SECURED LOAN
WITH PROPERTY ! FAILED TO PAY ! SF
JUDICIAL FORECLOSURE DAPAT BUT
SUSPENDED BEC OF MEMORANDUM OF
AGREEMENT/DACION EN PAGO ! SH
FAILED TO PAY WITHIN 180 DAYS ! TCT
ISSUED IN THE NAME OF SF
1616 IS NOT RESTRICTIVE OR
CONCLUSIVE ! 30% interest per annum as
part of the redemption price is valid ! 1616
should be read in connection with 160
IN A CONTRACT OF SALE WITH PACTO DE
RETRO, THE VENDEE HAS A RIGHT TO
THE IMMEDIATE POSSESSION OF THE
PROPERTY SOLD, UNLESS OTHERWISE
AGREED UPON 1
PRIMARY STRUCTURES CORPORATION
VS VALENCIA
LEGAL REDEMPTION – RURAL LAND
execution of the deed of sale.
In a contract of sale with pacto de retro, the
vendee has a right to the immediate
possession of the property sold, unless
otherwise agreed upon. It is basic that in pacto
de retro sale, the title and ownership of the
property sold are immediately vested in the
vendee a retro, subject only to the resolutory
condition of repurchase by the vendor a retro
within the stipulated period. When the vendor
remains in actual physical possession of the
land and enjoys the fruits thereof,
circumstances reveal the real intention of the
parties to secure the payment of the loans with
the land as security. Moreover, Article 1616 is
not restrictive- the interest and penalty in the
redemption price may be considered as “other
expenses”
Whenever a piece of rural land not exceeding
one hectare is alienated, the law grants to the
adjoining owners a right of redemption except
when the grantee or buyer does not own any
other rural land. In order that the right may
arise, the land sought to be redeemed and the
adjacent property belonging to the person
exercising the right of redemption must both be
rural lands. If one or both are urban lands, the
right cannot be invoked. Here, the one or both
are urban lands, the right cannot be invoked.
Article 1621 of the Civil Code expresses that
the right of redemption it grants to an adjoining
owner of the property conveyed may be
defeated if it can be shown that the buyer or
grantee does not own any other rural land. The
statement in the deed of sale to the effect that
the vendors have complied with mandatory
written notice as being the written affirmation

GUZMAN BOGCALING & CO VS BONNEVIE
LEASE- RIGHT OF FIRST
PRIORITY/REFUSAL
NOT NECESSARY TO SECURE APPROVAL
BY THE PROBATE COURT OF THE
CONTRACT OF LEASE
PETIONER = X BUYER IN GOOD FAITH !
HAD NOTICE OF THE LEASE OF
PROPERTY BY THE BONNEVIES AND
FAILED TO INQUIRE ABOUTE THE TERMS
OF THE LEASE CONTRACT WHICH
CONTAINED PRIORITY OF RIGHT GIVEN TO
THE BONNEVIES
X VOIDABLE, YES RESCISSIBLE
CONTRACT
STIPULATION THAT LESSEES WILL BE
GIVEN FIRST PRIORITY IN CASE OF SALE,
ALL THINGS AND CONSIDERATIONS
BEING EQUAL
YEK SENG CO VS CA
CONTRACT OF LEASE FOR A DEFINITE
TERM
VERBAL CONTRACT OF LEASE
20 YEARS OCCUPANCY
PAID MONTHLY BASIS RENTAL + NO
PERIOD OF LEASE X SPECIFIED =
TERMINABLE FROM MONTH TO MONTH
(1687)
LEASE WAS TERMINATED ALREADY
X EXTEND TIME BY COURT ! DISCRETION
OF THE COURT ONLY/ MINISTERIAL DUTY
ONLY (”MAY”)
CLUTARIO VS CA
X WAIVER OF EJECTMENT CASE
  © Michelle Duguil
under oath, as well as the evidence, that the
required written notice to petitioner under
Article 1623 has been met.
In the right of first priority, there should be
identity of the terms and conditions to be
offered to the lessees and all other prospective
buyers. It is only when the lessees fail to
exercise the right that the property could be
lawfully sold to others. Furthermore, it is only if
the right of first priority would be effected and
the said property is to be sold that the
administrator be required to secure the
approval of the probate court pursuant to Rule
89 of the Rules of Court.
The mere occupancy of the premises for a
number of years, by itself is not sufficient.
Since the contract of lease is for a definite
term, the lessee cannot avail of the benefits
under Article 1687 which applies only if there is
no definite term. The power of the Courts to fix
a longer term for lease is protestative or
discretionary, 'may' is the word — to be
exercised or not in accordance with the
particular circumstances of the case; a longer
term to be granted where equities come into
play demanding extension, to be denied where
none appears, always with due deference to
the parties freedom to contract.
Acceptance by the lessor of the payment by the
lessee of the rentals in arrears does not
constitute a waiver of the default in the
ARREARS IN PAYMENT OF RENT AND
NEED FOR THE PREMISES = SUFFICIENT
GROUND FOR EJECTMENT CASE (BP 25)
ACCEPTANCE OF BACK RENTALS BY
LESSOR = X MEAN ABANDONMENT OF
EJECTION CASE
NEED OF LESSOR TO USE PREMISES
BECAUSE OF OLD AGE + OTHER
PROPERTIES ARE TENANTED = VALID
GROUND FOR EJECTMENT CASE =
LIBERALLY CONSTRUED
YAP VS CRUZ
TRANSFER OF LEASEHOLD RIGHTS
DR. CRUZ VS. DR. YAP (VETERINARIANS)
MONTH TO MONTH BASIS RENT
VETERINARY CLINIC
NO NOTICE OR DEMAND TO VACATE =
LEASE CONTRACT CONTINUES ! X
DEEMED AUTOMATICALLY EXPIRED
DR. CRUZ (LESSEE) X RELINQUISH HIS
LEASEHOLD RIGHTS ! FAILURE OF
NEGOTIATIONS OF SALE OF THE
GOODWILL (CONDITIONAL) ! CONDITION
X COMPLIED WITH
UNITED REALTY CORP VS CA
TERMINATION OF LEASE; DEFINITE TIME
BUDDHIST CHAPEL
CONTRACT OF LEASE IS FOR A DEFINITE
PERIOD ! EXCEPTION TO SECT 4 PD 20 !
MAY RIGHT TO EJECT THE TENANTS
ITS PERIOD IS FROM MONTH TO MONTH
AND THAT THE LEASE MAY BE
TERMINATED WHEN EITHER PARTY GIVES
A 5 DAYS NOTICE IN WRITING = DEFINITE
PERIOD
INCREASED RENTAL = X PAID = BP 20 =
GROUND FOR TERMINATION OF LEASE
CONTRACT
payment of rentals as a valid cause of action
for ejectment. For the lessor to be able to
validly eject the lessee on the ground of need
for the leased property, it must be shown that
there is no other available residential unit to
satisfy that need. The non-availability must
exist at the time of the demand by the lessor on
the lessee to vacate the property.
The transfer of the leasehold rights is
conditional in nature and has no force and
effect if a service of notice of demand to pay
and to vacate is not complied with. In the
absence of such notice, the lease continues to
be in force and cannot be deemed to have
expired as of the end of the month
automatically. Neither can the non-payment of
the monthly rent be a ground for termination of
the lease without a demand to pay and to
vacate.
A lease on a month-to-month basis expires
after the last day of the 30th day period
repeating the same cycle of the 30-day period
until either party express their prerogative
under their agreement to terminate the same. A
lease contract may be terminated at the end of
any month, which shall be deemed terminated
upon the refusal to pay the increased monthly
rental demanded by the lessor, provided the
same is not exorbitant. Furthermore, 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 of
Presidential Decree No. 20 which suspends the
application of Article 1673(1) of the Civil Code,
providing for the fixed period for the termination
of leases.
PD 20 and BP 25 COVER RESIDENTIAL/
DWELLING UNITS ONLY ! BUDDHIST
TEMPLE X DWELLING UNIT ! X
PROTECTED UNDER PD 20 and BP 25
LEGAR MANAGEMENT AND REALTY CORP “Lease agreements with no specified period,
VS CA but in which rentals are paid monthly, are
considered to be on a month-to-month basis.
EJECTMENT OF LESSEE UNDER RENT They are for a definite period and expire after
CONTROL LAW the last day of any given thirty-day period, upon
proper demand and notice by the lessor to
LEASE AGREEMENTS WITH NO SPECIFIED vacate, even if the lease agreement was verbal
PERIOD, BUT IN WHICH RENTALS ARE in nature.”
PAID MONTHLY = MONTH TO MONTH
BASIS = DEFINITE PERIOD AND EXPIRE
AFTER THE LAST DAY OF ANY GIVEN
THIRTY-DAY PERIOD + UPON PROPER
DEMAND + NOTICE BY THE LESSOR TO
VACATE, EVEN IF THE LEASE
AGREEMENT WAS VERBAL IN NATURE

X APPLICABLE BP 25

          © Michelle Duguil