DEFINITION OF SALE Polytechnic University vs. CA (G.R. No.

143513 November 14, 2001) 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. The defendants-appellants interpretation that there was a mere transfer, and not a sale, apart from being specious sophistry and a mere play of words, is too strained and hairsplitting. For it is axiomatic that every sale imposes upon the vendor the obligation to transfer ownership as an essential element of the contract. Transfer of title or an agreement to transfer title for a price paid, or promised to be paid, is the very essence of sale (Kerr & Co. v. Lingad, 38 SCRA 524; Schmid & Oberly, Inc., v. RJL Martinez Fishing Corp., 166 SCRA 493). At whatever legal angle we view it, therefore, the inescapable fact remains that all the requisites of a valid sale were attendant in the transaction between co-defendants-appellants NDC and PUP concerning the realities subject of the present suit.

STARBRIGHT SALES ENTERPRISES, INC., PETITIONER, VS. PHILIPPINE REALTY CORPORATION, MSGR. DOMINGO A. CIRILOS, TROPICANA PROPERTIES AND DEVELOPMENT CORPORATION AND STANDARD REALTY CORPORATION, RESPONDENTS. [G.R. No. 177936, January 18, 2012] ABAD, J.: Facts: On April 17, 1988 Ramon Licup wrote Msgr. Domingo A. Cirilos, offering to buy three contiguous parcels of land in Paraaque that The Holy See and Philippine Realty Corporation (PRC) owned for P1,240.00 per square meter. Licup accepted the responsibility for removing the illegal settlers on the land and enclosed a check for P100,000.00 to "close the transaction. He undertook to pay the balance of the purchase price upon presentation of the title for transfer and once the property has been cleared of its occupants. Msgr. Cirilos, representing The Holy See and PRC, signed his name on the conforme portion of the letter and accepted the check. But the check could not be encashed due to Licup's stop-order payment. Licup wrote Msgr. Cirilos on April 26, 1988, requesting that the titles to the land be instead transferred to petitioner Starbright Sales Enterprises, Inc. (SSE). He enclosed a new check for the same amount. SSE's representatives, Mr. and Mrs. Cu, did not sign the letter. On November 29, 1988 Msgr. Cirilos wrote SSE, requesting it to remove the occupants on the property and, should it decide not to do this, Msgr. Cirilos would return to it the P100,000.00 that he received. On January 24, 1989 SSE replied with an "updated proposal. It would be willing to comply with Msgr. Cirilos' condition provided the purchase price is lowered to P1,150.00 per square meter. On January 26, 1989 Msgr. Cirilos wrote back, rejecting the "updated proposal." He said that other buyers were willing to acquire the property on an "as is, where is" basis at P1,400.00 per square meter. He gave SSE seven days within which to buy the property at P1,400.00 per square meter, otherwise, Msgr. Cirilos would take it that SSE has lost interest in the same. He enclosed a check for P100,000.00 in his letter as refund of what he earlier received. The property was eventually sold to Tropicana Properties and then sold Standard Realty. Issue: Whether or not there is a perfected contract existing between SSE and land owners, represented by Msgr. Cirilos. Ruling:

Three elements are needed to create a perfected contract: 1) the consent of the contracting parties; (2) an object certain which is the subject matter of the contract; and (3) the cause of the obligation which is established. Under the law on sales, a contract of sale is perfected when the seller, obligates himself, for a price certain, to deliver and to transfer ownership of a thing or right to the buyer, over which the latter agrees. From that moment, the parties may demand reciprocal performance. The Court believes that the letter between Licup and Msgr. Cirilos, the representative of the property's owners, constituted a perfected contract. However, when Licup ordered to stop his deposit and instead transferred the property to SSE, a novation took place. Novation serves two functions - one is to extinguish an existing obligation, the other to substitute a new one in its place - requiring concurrence of four requisites: 1) a previous valid obligation; 2) an agreement of all parties concerned to a new contract; 3) the extinguishment of the old obligation; and 4) the birth of a valid new obligation. In the given case, it was noted that the signatures present during Licup and Msgr. Cirilos agreement are not present in the letter of agreement between SSE and Msgr. Cirilos. SSE cannot revert to the original terms stated in Licup's letter to Msgr. Cirilos since it was not privy to such contract. The parties to it were Licup and Msgr. Cirilos. Under the principle of relativity of contracts, contracts can only bind the parties who entered into it.

Manila Metal Container Corp. V. PNB (2006) G.R. No. 166862 December 20, 2006

Lessons Applicable: Doctrine of Centralized Management: Powers of Board of Directors (Corporate Law) Doctrine of Centralized Management (Corporate Law) Price (Sales) Earnest Money (Sales) FACTS: Manila Metal Corp. executed a real estate mortgage (TCT. 32098) as a security for its loan from PNB amounting to 900,000 php, later on 1,000,000 php and 653,000 php Aug. 5, 1982: PNB filed a petition for extrajudicial foreclosure for the property to be sold at a public auction 911,532.21 php (outstanding as of June 30) + interest + attorney's fees Sept. 2, 1982: PNB won the public auction at 1,000,000 php Feb. 17, 1983: Certificate of Sale was issued and registered at the Registry of Deeds and was annotated at the dorsal portion of the title (Redeemable until Feb 17,1983) Petitioner requested 1 year extension until Feb 17,1984 but was rejected by PNB saying it is their policy not to accept partial redemption Jun. 1,1984: Since petitioner failed to redeem, TCT. 32098 was cancelled and a new title was issued in favor of PNB Meanwhile, Special Assets Management Department (SAMD) had prepared a statement of account as of Jun 25,1984 amounting to 1,574,560.47 php (bid price + interest + advances of insurance premiums + advances on relaty taxes + reg. exp. +misc. exp + piblication cost) Petitioner deposited 725,000 php as deposit to repurchase and was issued an O.R. PNB management rejected the recommendation of SAMD and demanded that petitioner pay the markt value of 2,660,000 php. Jun 24, 1984: PNB informed petitioner that its B.O.D had agreed to accept its offer to purchase but at

1,931,389.53 less the 725,000 php. PNB President did not conform to the letter but merely indicated that he has received it. Petitioner rejected this since PNB has already accepted its downpayment so it can no longer increase the price. PNB also rejected petitioners payment for the balance. Petitioner filed a complaint against PNB for Annulment of Mortgage and Mortgage Foreclosure, Delivery of Title, or Specific Performance with Damages CA affirmed RTC: Favored PNB and demanded that it refund the 725,000 php (no sale because no meeting of the minds in terms of price) Lot was later transferred to its PNB President Bayani Gabriel Petitioner filed a petition for certiorari ISSUE: 1. W/N the statement of account by SAMD is only a recommendation subject to the approval of the BOD - YES 2. W/N there was a contract of sale - NO 3. W/N earnest money establishes a contract of sale - NO HELD: Denied. Costs Against Petitioner. 1. YES Art. 1318 of NCC: no contract unless the following requisites concur: Consent of the contracting parties; Object certain which is the subject matter of the contract; Cause of the obligation which is established 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. When there is merely an offer by one party without acceptance of the other, there is no contract. 2. NO Section 23 of the Corporation Code: corporate powers of all corporations shall be exercised by the board of directors. Just as a natural person may authorize another to do certain acts in his behalf, so may the board of directors of a corporation validly delegate some of its functions to individual officers or agents appointed by it. Thus, contracts or acts of a corporation must be made either by the board of directors or by a corporate agent duly authorized by the board. Absent such valid delegation/authorization, the rule is that the declarations of an individual director relating to the affairs of the corporation, but not in the course of, or connected with the performance of authorized duties of such director, are held not binding on the corporation. a corporation can only execute its powers and transact its business through its: Board of Directors officers and agents when authorized by: a board resolution;or its by-laws 3. NO ART. 1482. Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract The deposit of P725,000 was accepted by PNB on the condition that the purchase price is still subject to the approval of the PNB Board Absent proof of the concurrence of all the essential elements of a contract of sale, the giving of earnest money cannot establish the existence of a perfected contract of sale. Manuel Luis Sanches vs Mapalad Realty Corporation [GR No. 148516, December 27, 2007]

Reyes, J.:

Facts: Respondent Mapalad was the registered owner of 4 parcels of land located along Roxas Boulevard, Baclaran, Paranaque. On March 21, 1986, shortly after EDSA revolution, Jose Campos executed an affidavit admitting that Mapaladd was one of the companies held in trust for former President Marcos. Campos turned over, all assets, properties, records and documents pertaining to Mapalad to the new administration led by President Corazon Aquino. PCSS issued writs of sequestration for Mapalad and all its properties. Rolando Josef, appointed Vice President/Treasurer and GM of Mapalad, discovered for that there was 4 TCTs missing. Josef inquired about it and discovered Felicito Manalili, Mapalads former director and general manager took them. On November 16, 1992, Nordelak Development Corporation filed a notice of adverse claim over the subject properties based on deed of sale purportedly executed by Miguel Magsaysay in his capacity as President and board chairman of Mapalad. A. Magsaysay Inc., a corporation controlled by Miguel Magsaysay, acquired ownership of all the shares of stock of Mapalad however was terminated after selling all his shares to Novo Properties on December 3, 1982. Mapalad commenced the present action for annulment of deed of sale and reconveyance of title with damages against Nordelak. During the pendency of the case, Nordelak sold the subject property to a certain Manuel Luis Sanchez, now petitioner. Issue: Whether or not there is a valid sale between Mapalad and Nordelak. Ruling: A contract is defined as a juridical convention manifested in legal forms, by virtue of which one or more persons bind themselves in favour of another, to give, to do or not to do. The essential requisites of a valid contract of sale are (a) consent of the contracting parties, (b) object certain, and (c) cause of obligation. Consent may be given only by a person with legal capacity to give consent. In the case of juridical person such as corporation like Mapalad, consent may only be granted through its officers who have been duly authorized by its board of directors. In the present case, consent was purportedly given by Miguel Magsaysay, the person who signed for and in behalf of Mapalad in the deed of absolute sale. However, during the trial, he admitted to be no longer connected with Mapalad because he already divested all his interests in said corporation as early as 1982. Even assuming, for the sake of argument, the signatures were genuine, it would still be voidable for lack of authority resulting in his capacity to give consent on the part of Mapalad.

REPUBLIC vs. FLORENDO G.R. No. 166866March 27, 2008 Corona, J. Facts : Export Processing Zone Authority, (PEZA), predecessor of PEZA, filed a complaint for the expropriation of seven parcels of land. The purpose of the expropriation was to establish and develop an export processing zone or a part thereof on those real properties. The RTC rendered a decision ordering the expropriation of the seven parcels of land and paymentof just compensation of P1,500 per sq. m. with 12% interest per annum from the time petitioner took possession on March12, 1992 until full payment thereof. For the aggregate area of 17,967.5 sq. m., the total compensation was P26, 951,250.Petitioner filed an appeal. While on appeal, petitioner and respondent reached an amicable settlement of the ff : 1.P1,500 per sq. m. valuation fixed by the RTC; 2.waiver by respondents of the

payment of the court-awarded 12% interest and3.presentation by respondents of clean titles of all the subject properties before payment by petitioner. They executed a deed of absolute sale, the transfer of ownership of the lot from respondent to petitioner. Thereafter, the consideration for the remaining lots was paid and ownership was subsequently transferred to it. Petitioner prepared a joint motion to dismiss the expropriation case but respondent Antonio Florendo refused to sign because there were still three lots which had not yet been paid. The CA rendered a decision affirming the RTC's decision but with modification that the fair market value of the subject properties should be P1,000 per sq.m instead of 1,500 Issue : Whether or not this perfected compromise agreement is valid despite the finality of judgment of the CA. Ruling: Accordingly, the court held that the compromise agreement reached by the parties while the appeal was pending in the CA is valid. When the CA rendered decision, it unknowingly adjudicated a case which, for all intents and purposes, had already been closed and terminated by the parties themselves when they agreed on a settlement. It does not matter that the CA decision lapsed into finality when neither party questioned it. A compromise agreement is still valid even if there is already a final and executory judgment. Furthermore, compromises are favored and encouraged by the courts. Parties are bound to abide by them in good faith. Since they have the force of law between the parties, no party may discard them unilaterally. Consequently, considering the decision of the CA had been superseded by the compromise agreement of the parties, the various orders of the RTC directing the execution of the said CA decision were invalid and of no force and effect. Fallo: WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals is SET ASIDE

33 GABELO v CA (Formation of a Contract of Sale Delgado) Facts: Philippine Realty Corporation owns a land in Intramuros with an area of 675 square meters. It was leased to Maglente for 3 years. Lessee was given Right of First Refusal. The lease contract also prohibits encumbrance without the lessors assent. Maglente leased it to Gabelo, at. al. without the knowledge of th e owner. Maglente was informed that the land will be sold and the latter manifested to exercise his priority to buy the land. Maglente paid downpayment of P100,000 for the entire amount of P1.2M. Petitioners were informed of the sale and that they were advised to vacate the premises. They filed case with the argument that they have a better right to the land because they were occupants. They added that the co-buyers of Maglente never occupied the land. RTC frowned upon their arguments and ordered the execution of the contract to sell/contract of sale. CA affirmed. Issue: W/N the PRC can sell this to non-occupants other than Maglente. Held: Yes. PRC is free to sell the land to whoever is interested. The mere fact that the petitioners are actual occupants cannot compel PRC to enter into a contract with them. The contract of sale having been perfected by the meeting of the minds of the buyers and the sellers binds them and they could no longer assert their claim. The argument that the parties didnt affix their signature is of no moment since there have been meeting of the minds and that is enough to constitute a valid contract.