Villonco Realty Company v. Bormaheco, Inc.

,
65 SCRA 352,
July 25, 1975
AQUINO, J.

FACTS:
Francisco Cervantes is the president of Bormaheco, Inc. He and his wife, Rosario P.
Navarra-Cervantes, are the owners of Lots 3, 15 and 16 located at 245 Buendia Avenue,
Makati, Rizal. The entire three lots are occupied by the building, machinery and
equipment of Bormaheco, Inc. and are adjacent to the property of Villonco Realty
Company... situated at 219 Buendia Avenue.
In February 1964, Bormaheco, Inc. and Romeo Villonco of Villonco Realty Company were
in negotiation for the sale of the aforementioned lots and its improvements, along with
Edith Perez de Tagle, a real estate broker.
It was presumed that the said lots were owned by Bormaheco, Inc. and Cervantes was
an authorized individual to sell the same. With that, Cervantes wrote a written offer to
Villonco for such sale of the property, highlighting the stipulation;
“(3) That this sale is to be consummated only after I shall have also
consummated my purchase of another property located at Sta. Ana, Manila;
In March 1964, Villonco sent a counter-offer that was accepted by Cervantes, highlighting
the following stipulations;
1. That the price of the property shall be P400.00 per sq. m., including the
improvements thereon;
2. That a deposit of P100,000.00 shall be given to you as earnest money
which will become as part payment in the event the sale is consummated;
3. This sale shall be cancelled, only if your deal with another property in Sta.
Ana shall not be consummated and in such case, the P100,000.00 earnest
money will be returned to us with a 10% interest p.a. However, if our deal
with you is finalized, said P 100,000.00 will become as part payment for the
purchase of your property without interest:
However, twenty-six days after the signing of contract of sale, Cervantes returned the
earnest money, with interest amounting to P694.24 (at ten percent per annum).
Cervantes cited as an excuse that "despite the lapse of 45 days from February 12, 1964
there is no certainty yet" for the acquisition of the Punta property

The lower court rendered a decision ordering the Cervantes spouses to execute in favor
of Bormaheco, Inc. a deed of conveyance for the three lots in question and directing
Bormaheco, Inc.:
(a) to convey the same lots to Villonco Realty Company;
(b) to pay the latter, as consequential damages, the sum of P10,000 monthly
from March 24, 1964 up to the consummation of the sale;
(c) to pay Edith Perez de Tagle the sum of P42,000 as broker's commission
and;
(d) to pay P20,000 as attorney's fees (Civil Case No. 8109).
ISSUES:
 Whether or not Bormaheco Inc. was bound to perform the contract with Villonco
Realty Company

RULING:
1. Acceptance to the offer is a perfection of contract
Bormaheco's acceptance of Villonco Realty Company's offer to purchase the
Buendia Avenue property, as shown in Teofilo Villonco's letter dated March 4, 1964 (Exh.
D), indubitably proves that there was a meeting of minds upon the subject matter and
consideration of the... sale. Therefore, on that date the sale was perfected.
"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
provisions of the law governing the form of contracts" (Art. 1475, NCC)
“Contracts are perfected by mere consent, and from that moment 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" (Art. 1315,NCC).
"Consent is manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute the contract. The offer must be
certain and the acceptance absolute. A qualified acceptance constitutes a
counter-offer" (Art. 1319, NCC). "An acceptance may be express or implied" (Art.
1320, NCC)
2. There was acceptance to the counter-offer
Bormaheco, Inc. and the Cervantes spouses contend that the sale was not
perfected because Cervantes allegedly qualified his acceptance of Villonco's revised offer
and, therefore, his acceptance amounted to a counter-offer which Villonco Realty
Company should accept but no such acceptance was ever transmitted to Bormaheco,
Inc. which, therefore, could withdraw its offer.
However, the mere fact that Villonco Realty Company paid, and Bormaheco, Inc.
accepted, the sum of P100, 000 as earnest money or down payment is crucial in that
Cervantes was aware that Villonco Realty Company had accepted the modifications
which he had made in Villonco's counter-offer. Had Villonco Realty Company not
assented to those insertions and annotations, then it would have stopped payment on its
check for P100, 000.
The truth is that the alleged changes or qualifications in the revised counter-offer
are not material or are mere clarifications of what the parties had previously agreed upon.
The Supreme Court upheld the lower court’s decision with modification.
 Salonga v. Concepcion
470 SCRA 291
September 20, 2005
CALLEJO, SR., J.

Case digested by Sherryjean Justine G. Uy

FACTS:
The spouses Natalio Salonga and Felicidad Salonga were the owners of the 8
prime parcels of land located in Dagupan City. They had a commercial building with four
floors which stood on their property located along A.B. Fernandez Avenue, Dagupan City.
The spouses leased the building to traders and merchants, and lived in a house along
Arellano Street. The house stood on a lot which they also owned. The spouses loaned
from several banks and mortgaged several of their properties in order to finance their
business. Due to an earthquake that damaged their building, they were unable to pay
their loans and some of their properties were foreclosed. They asked help from pouses
Manuel and Nenita Concepcion, who were in the business in loaning money, to redeem
their properties with the agreement that the building would be sold after 2 months and
that the loans would be paid. Due to this agreement a deed of absolute sale was made in
favor of the Sps. Concepcion with the condition that it will not be registered. The loan was
not repaid and the building was subsequently transferred in the name of respondents.
The lower court rendered judgment in favor of the spouses Concepcion ordering the
dismissal of the complaint.
ISSUE: Whether the contract above is one of Equitable Mortgage or Absolute Sale.

RULING:
The Supreme Court ruled that the contract was one of equitable mortgage due
to the following reasons:
First, the petitioners were hard-pressed to pay their account to the respondents in
the total of the principla amount of P3, 198, 886.47; the said amount paid by the
respondents for the account of the petitioners to the PNB, the Associated Bank and the
DBP, excluding the amount of 36% interest a month of 36% interest per annum.
Second, it was made to appear under the August 31, 1993 Deed of Absolute Sale
that the petitioners had sold their five parcels of land to the respondents for the principal
amount of P575,000.00, and that the petitioners received the said amount from the
respondents. However, at the time of the execution of the said deed, the petitioners were
indebted to the respondents for the principal amount of P586, 520.50, which the
respondents had remitted to the Associated Bank for the account of the petitioners. It is
incredible that the petitioners would sell the said parcels of land to the respondents, and
that the latter, would remit the purchase price of P575,000.00 to the petitioners, and retain
the said amount to be applied as payment to the petitioner’s accounts P586, 520.50.
Third, respondent Manuel Concepcion had earlier signed on March 10, 1993 an
undertaking that he would not register the deed of absolute sale as long as the petitioners
will pay their outstanding account plus interests thereon at the rate of 3% per month.
There was also gross inadequacy of price in this case as it appeared that their commercial
building was sold for only 2M while the actual market price was 10M.
 Northern Motors, Inc. v. Sapinoso
33 SCRA 1970
May 29, 1970
VILLAMOR, J.

Case digested by Sherryjean Justine G. Uy

FACTS:
Sapinoso purchased form Northern Motors a car for P12,171, making a down
payment and the balance payable on installment. To secure the payment, Sapinoso
executed chattle mortgage on the car.
The mortgage contract provided that upon default, the mortgagee may:
(a) sell the car;
(b) cancel the contract;
(c) foreclose the property extrajudicially;
(d) foreclose the property judicially;
(e) file an ordinary civil action for exact fulfillment

Furthermore, whichever is the elected remedy, the mortgagor waives his right to
reimbursement of any amounts paid by him.

Sapinoso failed to pay several installment dues. His other payments were applied
almost all on the interest only. With this, Northern Motors filed this present complaint. In
the complaint, Northern Motors stated that it was availing itself of the remedy of
extrajudicial foreclosure, with a prayer for the issuance of writ of replevin upon filing a
bond. Should the mortgagor failed to deliver the car, then it be ordered to pay the amount
due plus 25% attorney’s fees.Subsequent to the commencement of the action but before
filing an answer, Sapinoso paid P1,250.
A writ of replevin was issued and served to Sapinoso together with the summons.
The next day, the sheriff seized the car and delivered to Northern Motor.
Sapinoso made an answer, stating that he has already paid so much for the car;
and that the value of the car is only P5,000; and that the reason for not being able to pay
the installment dues is because the car is defective, and that Northern failed to have it
fixed even though he had repeatedly called its attention. He also avered that he gave
P700 to Northern to have the car fixed, but instead, Northern filed the instant suit.
Sapinoso prayed that the car be returned to him, and that he is willing to pay for it in a
compromise agreement.
The lower court finds that Northern Motors has the right to the possession of the
car and the delivery there-of to the plaintiff is ratified and confirmed but said party is
sentenced to pay to Sapinosa the sum of P1,250, with legal.
ISSUE: Whether Northern has to return the P1,250 paid to him by Sapinoso after
commencement of the present case but before the filing of Sapinoso’s Answer.

RULING: No obligation to return.

The trial court erred in concluding that the legal effects of the filing of the
action was to bar the plaintiff from accepting further payments on the promissory note.
“That the ultimate object of the action is the foreclosure of the chattel
mortgage, is of no moment, for it is the fact of foreclosure and actual sale
 of the mortgaged chattel that bar further recovery by the vendor of any
balance on the purchaser's outstanding obligation not satisfied by the sale.”

In any event, what Article 1484(3) prohibits is "further action against the purchaser
to recover any unpaid balance of the price;" and although this Court has construed the
word "action" in said Article 1484 to mean "any judicial or extrajudicial proceeding by
virtue of which the vendor may lawfully be enabled to exact recovery of the supposed
unsatisfied balance of the purchase price from the purchaser or his privy", there is no
occasion at this stage to apply the restrictive provision of the said article, because there
has not yet been a foreclosure sale resulting in a deficiency. The payment of the sum of
P1,250.00 by Sapinoso was a voluntary act on his part and did not result from a "further
action" instituted by plaintiff-appellant. m
The judgment appealed from is modified by setting aside the portion thereof which
orders Northern Motors to pay Sapinoso the sum of P1,250.00.