ANool & Almojera v. CA, Nool & Nebre / GR No. 116635 / 7.24.

97 / Sales / PANGANIBAN,
J p:
F: Two parcels of land were mortgaged by herein petitioners to DBP to secure a loan. The
subject properties were foreclosed by the bank for failure of the private petitioners to pay
their loan. After DBP became the absolute owner of the two parcels of land, Anacleto, a
younger brother of Conchita, negotiated with DBP and succeeded in buying the lands. New
titles were issued in name private respondents. Petitioners seek recovery of the
aforementioned parcels of land from the respondents on the strength of two private
documents. The first, an agreement which appeared to have sold to respondents the two
parcels of land and the second, in which there was an agreement that Conchita can
repurchase the said lands when she has the money. The trial court voided both contracts
and decided in favor of the respondents. The Court of Appeals affirmed the decision of the
lower court, hence, this petition for review on certiorari.
I: WON the sale to PR by the bank is void.
R: Affirmed. The principal contract of sale contained and the auxiliary contract of
Repurchase are both void. It is clear that the seller had no longer had any title to the parcels
of land at the time the Contract of Sale was drawn.
This conclusion of the two lower courts appears to find support in Dignos vs. Court of
Appeals, where the Court held: "Be that as it may, it is evident that when petitioners sold
said land to the Cabigas spouses, they were no longer owners of the same and the sale is
null and void." In the present case, it is clear that the sellers no longer had any title to the
parcels of land at the time of sale. Since Exhibit D, the alleged contract of repurchase, was
dependent on the validity of Exhibit C, it is itself void. A void contract cannot give rise to a
valid one. Verily, Article 1422 of the Civil Code provides that "(a) contract which is the
direct result of a previous illegal contract, is also void and inexistent."
Moreover, the Civil Code itself recognizes a sale where the goods are to be "acquired . . . by
the seller after the perfection of the contract of sale," clearly implying that a sale is possible
even if the seller was not the owner at the time of sale, provided he acquires title to the
property later on. In the present case however, it is likewise clear that the sellers can no
longer deliver the object of the sale to the buyers, as the buyers themselves have already
acquired title and delivery thereof from the rightful owner, the DBP. Thus, such contact
may be deemed to be inoperative and may thus fall, by analogy, under item no. 5 of
Article 1409 of the Civil Code: "Those which contemplate an impossible service." Article
1459 of the Civil Code provides that "the vendor must have a right to transfer the
ownership thereof [object of the sale] at the time it is delivered." Here, delivery of
ownership is no longer possible. It has become impossible.

S. Dignos & I. Lumungsod v. CA & Jabil / GR No. 59266 / 2.29.88 / Sales / Bidin, J p:
F: Sps Dignos (P) sold a land to PR in Cebu for 28K: 2 installments w/ assumption of
indebtedness with the bank for 12k. Paid and acknowledged thru a DOS. On 11.25.6 Sps P
sold the same land to Sps Cabigas who were US Citz for 35K, in a DOS. After w/c Sps P
refused to accept payment from PR, for w/c they sued, the court rescinded the sale to Sps
Cabigas and ordered PR to pay the balance, P was also ordered to pay the Sps Cabigas for
everything, including the fencing made by the latter. Appealing to the CA, w/c affirmed the
same but modified as to the payment of the fencing, hence this, arguing that the contract
was one of a contract to sell.
I: WON subject contract is a deed of absolute sale or a contract to sell.
R: Affirmed in toto. It has been held that a deed of sale is absolute in nature although
denominated as a "Deed of Conditional Sale" where nowhere in the contract in question is
a proviso or stipulation to the effect that title to the property sold is reserved in the
vendor until full payment of the purchase price, nor is there a stipulation giving the
vendor the right to unilaterally rescind the contract the moment the vendee fails to pay
within a fixed period.
On the contrary, all the elements of a valid contract of sale under Article 1458 of the Civil
Code, are present, such as: (1) consent or meeting of the minds; (2) determinate subject
matter; and (3) price certain in money or its equivalent. In addition, Article 1477 of the
same Code provides that "The ownership of the thing sold shall be transferred to the
vendee upon actual or constructive delivery thereof." As applied in the case of Froilan v.
Pan Oriental Shipping Co., et al. (12 SCRA 276), this Court held that in the absence of
stipulation to the contrary, the ownership of the thing sold passes to the vendee upon
actual or constructive delivery thereof.
As found by the trial court, the Dignos spouses delivered the possession of the land in
question to Jabil as early as March 27, 1965 so that the latter constructed thereon Sally's
Beach Resort also known as Jabil's Beach Resort in March, 1965; Mactan White Beach
Resort on January 15, 1966 and Bevirlyn's Beach Resort on September 1, 1965. Such facts
were admitted by petitioner spouses.
It has been ruled, however, that "where time is not of the essence of the agreement, a
slight delay on the part of one party in the performance of his obligation is not a sufficient
ground for the rescission of the agreement" (Taguba v. Vda. de Leon, supra). Considering
that private respondent has only a balance of P4,000.00 and was delayed in payment only
for one month, equity and justice mandate as in the aforecited case that Jabil be given an
additional period within which to complete payment of the purchase price.

Peoples Homesite & Housing Co. v. CA & Mendoza sps. / GR No. 61623 / 12.26.84 / Sales
/ Aquino, J p:
F: PHHC (P) prepared and awarded a parcel of land to PR sps, subject to the approval of the
QC Council, which the latter disapproved, PR was advised. P then prepared a new parcel w/
a smaller area for PR, submitted for approval - approved. P then, after a while, issued a
resolution recalling all awards to persons who failed to pay, PR failed to pay, P then offered
the land (tentatively awarded to PR) to others. The new awardees paid, and deeds of sale
where executed. PR moved for reconsideration of P, but before that they sued. CFI ruled in
favor of P, CA reversed, hence this.
I: WON there was a perfected sale w/ PR.
R: Reversed.
There was no perfected sale of Lot 4. It was conditionally or contingently awarded to the
Mendozas subject to the approval by the city council of the proposed consolidation
subdivision plan and the approval of the award by the valuation committee and higher
authorities. The city council did not approve the subdivision plan. The Mendozas were
advised in 1961 of the disapproval. In 1964, when the plan with the area of Lot 4 reduced to
2,608.7 square meters was approved, the Mendozas should have manifested in writing
their acceptance of the award for the purchase of Lot 4 just to show that they were still
interested in its purchase although the area was reduced and to obviate any doubt on the
matter. They did not do so. The People's Homesite and Housing corporation (PHHC) board
of directors acted within its rights in withdrawing the tentative award.
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 law governing the form of contracts." (Art.
1475, Civil Code). "In conditional obligations. the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the happening of the
event which constitutes the condition." (Art. 1181, Civil Code). Under the facts of the case,
there was no meeting of minds on the purchase of Lot 4 with an area of 2,608.7 square
meters at P21 a square meter.

Heirs of J. San Andres, V. Ziga, & S. Tria v. Vicente rodriguez / GR No. 135634 / 5.31.00 /
Sales / MENDOZA, J p:
F: Juan San Andres was the registered owner of Lot 1914-B-2 situated in Liboton, Naga City.
On September 28, 1964, he sold a portion thereof, consisting of 345 square meters to
respondent Vicente Rodriguez for P2,415.00. A Deed of Sale evidenced the sale. Upon the
death of Juan San Andres on May 5, 1985, Ramon San Andres was appointed judicial
administrator of the decedent's estate. A sketch plan of the 345-square meter lot sold to
respondent was prepared and from there it was found that respondent had enlarged the
area, which he purchased, by 509 square meters. Thereafter, the judicial administrator
brought an action, in behalf of the estate of Juan San Andres, for recovery of possession of
the 509-square meter lot. Respondent alleged that apart from the 345-square meter lot
which had been sold to him by Juan San Andres, the latter likewise sold to him the following
day the remaining portion of the lot consisting of 509 square meters, with both parties
treating the two lots as one whole parcel with a total area of 854 square meters. As proof
of the sale to him of 509 square meters, respondent attached to his answer a receipt
signed by the late Juan San Andres. Respondent also attached to his answer a letter of
judicial administrator Ramon San Andres asking payment of the balance of the purchase
price. CFI ruled in favor of petitioner. It ruled that there was no contract of sale to speak of
for lack of a valid object because there was no sufficient indication in the receipt presented
to identify the property subject of the sale, hence, the need to execute a new contract.
Respondent appealed to the Court of Appeals (CA). The CA reversed the decision of the trial
court. The appellate court held that the object of the contract was determinable, and that
there was conditional sale with the balance of the purchase price payable within five years
from the execution of the deed of sale. Hence, this petition.
I: WON the sale was conditional or absolute.
The Supreme Court ruled that since the lot subsequently sold to respondent was said to
adjoin the "previously paid lot" on three sides thereof, the subject lot was capable of being
determined without the need of any new contract. Thus, all of the essential elements of a
contract of sale were present, i.e. that there was a meeting of the minds between the
parties, by virtue of which the late Juan San Andres undertook to transfer ownership of
and to deliver a determinate thing for a price certain in money. The perfected contract of
sale was confirmed by the former administrator of the estate, who wrote a letter to
respondent asking P300.00 as partial payment for the subject lot. It cannot be gainsaid
that the contract of sale between the parties was absolute, not conditional. There was no
reservation of ownership nor a stipulation providing for a unilateral rescission by either
party. The decision of the Court of Appeals was affirmed with the modification that
respondent was ordered to reimburse petitioners for the expenses of the survey.

Sps Galang (P) v. CA & Buenaventura(s) (PR) / GR No. 80645 / 8.3.93 / Sales / Romero, J p:
F: On 7.16.76, PR sold to P 2 parcels of land in Tagaytay, under an instalment term: 25%
signing; 25%, 3 months or upon removal of the encargado in the lots, and the delivery of
the duplicate CT; 50%, 1Yr from upon TCT; but if payment is late a 12% interest will accrue
every year. After payment of the 1st term, they demanded that the encargados be removed,
they also offered to do the 2nd term immediately after doing so. PRs were unable, to wit, P
sued for specific performance w/ damages. PR denies, and argued that the contract did not
state the true intention of P, and that it wasnt their fault that the encargados wont leave,
for which they also sued said encargados, w/c was dismissed. CFI ordered PRs to pay back
w/ interest. CA affirmed in toto CFIs ruling, hence this.
I: WON Rescission was proper instead of specific performance.
R: Reversed, set aside. Reviewing the terms of the Deed of Sale quoted earlier, it is clear
that the parties had reached the stage of perfection of the contract of sale, there being
already "a meeting of the minds upon the thing which is the object of the contract and
upon the price," (Art. 1475, Civil Code) and on the basis of which both parties had the
personal right to reciprocally demand from the other the fulfillment of their respective
obligations. But contracts of sale may either be absolute or conditional. (Art. 1458, Civil
Code)
One form of conditional sales, is what is now popularly termed as a "Contract to Sell,"
where ownership or title is retained until the fulfillment of a positive condition, normally
the payment of the purchase price in the manner agreed upon. The breach of that
condition can prevent the obligation to convey title from acquiring a binding force. (Roque
v. Lapuz, 96 SCRA 741) Where the condition is imposed, instead, upon the perfection of the
contract, the failure of such condition would prevent such perfection. (People's Homesite
and Housing Corporation v. Court of Appeals, 133 SCRA 777). What we have here is a
contract to sell for it is the transfer of ownership, not the perfection of the contract that
was subjected to a condition. Ownership was not to vest in the buyers until full payment of
the purchase price and the transfer of the title to the buyers.
To summarize, we hold that there was no basis for rescinding the contract because the
removal of the "encargado" was not a condition precedent to the contract of sale. Rather, it
was one of the alternative periods for the payment of the second installment given by the
seller himself to the buyers. Secondly, even granting that it was indeed a condition
precedent rendering necessary the determination of the legal status of the "encargado,"
the lower courts were rash in holding that the "encargado" was a tenant of the land in
question.

Filoil v. IAC & Pabalan / GR No. 67115 / 1.20.89 / Sales / CRUZ, J p:

F: PR sold land his land to Villa Rey Transit (VRT & Villarama) on 12.22.71 for 140K, in
installments, VRT was issued with a new clean TCT w/o any annotations, and said
transferred appeared to be a ADS. On the same day VRT mortgaged said land to P for 350k
failing to pay said land was foreclosed and to a public auction, P, the highest bidder, was
awarded with the TCT, duly annotated. PR suddenly sued VRT and Villarama claiming that
he is yet to be fully paid, praying for rescission. VRT countered that they had all the right to
mortgage because since a new TCT was issued. Filoil defense was as an innocent purchaser.
CFI ruled infavor of PR, appealing to IAC which was affirmed, hence this (P is the only one
who petitioned in the SC).
I: WON there was no bad faith in the sales.
R: The sale was valid, but P should pay for atonement. The Court of Appeals erred in
holding that the contract of sale was subject to rescission on the ground of noncompliance
with one of its conditions, presumably the payment of the purchase price, under Article
1191 of the said Code. That ground was merely assumed and not established. In fact, it did
not exist at the time of the filing of the complaint. We find that the petitioner, if not
knowingly involved in the scheme to deceive Pabalan, was at least negligent in not closely
examining the facts before accepting the land as security for the loan to Villa Rey Transit.
Filoil must bear the consequences of its own omission. But more than this, it must also
share the blame for the injury suffered by the private respondent, who now finds herself
with neither the disputed property nor the balance of the purchase price. Accordingly, we
hereby order the petitioner to pay the private respondent, in atonement for its part in the
impairment of her interests
We agree with the trial court, as sustained by the respondent court, that Villarama acted
with less than good faith and candor when he secured the cancellation of the vendor's
certificate of title and replaced it with one in his name without even informing the
complainant about it. Worse, he thereafter mortgaged the property, also without her
knowledge, and then, to add insult to injury, also omitted to advice her that it had been
sold at public auction because he had defaulted in the payment of his mortgage debt.
An instrument is not a contract to sell where title to the subject land was transferred to
the vendee as of the date of the transaction notwithstanding that the purchase price had
not yet been fully paid at that time.

Servicewide Specialist Inc. v. IAC, Siton & Judge De Dumo / GR No. 74553 / 6.8.89 / Sales /
MEDIALDEA, J p:
F: PR bought a car for 25k (down payment remaining 68.4K), issuing a promisory note that
balance shall be paid in installments. Siton made a promissory note to the car dealer, in
addition, he mortgaged the same to a Chattel Mortgage Car Traders Phils (CTP). The
mortgage was assigned by CTP to Filininvest, w/c in turn reassigned the same to P. PR was
advised. Alleging that PR failed to pay, P moved for a writ of replevin (recovery of the
chattel) or payment. De Dumo, claiming that he bought the car from PR, claims that he paid
regularly. CFI dismissed, and ordered PRs to pay, P appealed to IAC, w/c affirmed in toto,
hence this.
I: WON the sale of Sito to De Dumo was valid.
R: Reversed. Pay in Full w/ Interest.
The chattel mortgagor continues to be the owner of the property, and therefore, has the
power to alienate the same; however, he is obliged under pain of penal liability, to secure
the written consent of the mortgagee. Thus, the instruments of mortgage are binding,
while they subsist, not only upon the parties executing them but also upon those who later,
by purchase or otherwise, acquire the properties referred to therein. The absence of the
written consent of the mortgagee to the sale of the mortgaged property in favor of a
third person, therefore, affects not the validity of the sale but only the penal liability of
the mortgagor under the Revised Penal Code and the binding effect of such sale on the
mortgagee under the Deed of Chattel Mortgage.
We cannot ignore the findings, however, that before the sale, prompt inquiries were made
by private respondents with Filinvest Credit Corporation regarding any possible future sale
of the mortgaged property; and that it was upon the advice of the company's credit lawyer
that such a verbal notice is sufficient and that it would be convenient if the account would
remain in the name of the mortgagor Siton. Even the personal checks of de Dumo were
accepted by petitioner as payment of some of the installments under the promissory note
(p. 92, Rollo). If it is true that petitioner has not acquiesced in the sale, then, it should
have inquired as to why de Dumo's checks were being used to pay Siton's obligations.
Based on the foregoing circumstances, the petitioner is bound by its predecessor
company's representations. This is based on the doctrine of estoppel.
It is clear from the prayer of petitioner in its brief on appeal to the appellate court that it
had chosen the remedy of fulfillment when it asked the appellate court to order private
respondents to pay the remaining unpaid sums under the promissory note. By having
done so, it has deemed waived the third remedy of foreclosure, and it cannot therefore ask
at the same time for a Writ of Replevin as preparatory remedy to foreclosure of mortgage.

Traders Royal Bank v. CA, FGA, & CB / GR No. 93397 / 3.3.97 / Sales Right to Transfer
Ownership / TORRES, JR., J p:
F: On 11.27.79, Filriters (thru Alfredo Banaria) sold and transferred to Philfinance CBCIs
worth 3.5M. On 2.4.81, P repurchased CBCI D891 for 500k, the repurchase agreement
stipulated that such will be repurchased again from P for 519.3k on 4.27.81, w/c Philfinance
failed to do because the checks was dishonored. Because of this Philfinance executed a
Detached Assignment in favor of P, by which Philfinance transferred and assigned all its
rights & title in the said CBCI, and authorized CB to transfer the same to P. When P went to
CB for the issuance of a new certificate for absolute ownership it was refused. CB holds
that the requirements arent complied with. Suing ensued, Filriters claimed the ownership
to be void, as such, the assignment was w/o authorization from the board, purportedly for
and in favor of Filriters, and ultimately it was fictitious, and therefore void and inexistent,
also, since such CBCI isnt a negotiable instrument. CFI ruled in favor of, appealed in the CA
failed, hence this.
I: WON such instrument may be transferred, even though it isnt a negotiable instrument.
R: Petition dismissed. The transfer made by Filriters to Philfinance did not conform to the
said Central Bank Circular, which for all intents, is considered part of the law.
The language of negotiability which characterizes a negotiable paper as a credit instrument
is its freedom to circulate as a substitute for money. This freedom in negotiability is totally
absent in a certificate of indebtedness as it merely acknowledges to pay a sum of money
to a specified person or entity for a period of time.
Petitioner, being a commercial bank, cannot feign ignorance of Central Bank Circular 769,
and its requirements. An entity which deals with corporate agents within circumstances
showing that the agents are acting in excess of corporate authority, may not hold the
corporation liable. The unauthorized use or distribution of the same by a corporate officer
of Filriters cannot bind the said corporation, not without the approval of its Board of
Directors, and the maintenance of the required reserve fund. Consequently, the title of
Filriters over the subject certificate of indebtedness must be upheld over the claimed
interest of Traders Royal Bank.
Piercing the veil of corporate entity requires the court to see through the protective shroud
which exempts its stockholders from liabilities that ordinarily, they could be subject to or
distinguishes one corporation from a seemingly separate one, were it not for the existing
corporate fiction. But to do this, the court must be sure that the corporate fiction was
misused, to such an extent that injustice, fraud, or crime was committed upon another,
disregarding, thus, his, her, or its rights. It is the protection of the interests of innocent third
persons dealing with the corporate entity which the law aims to protect by this doctrine.

Bocaling & Co (P). v. R.S.V. Bonnevie (PR) / GR No. 86150 / 3.2.92 / Sales / Cruz, J p:
F: A land owned J.L. Reynoso, that was leased to Sps Bonnevie, by the administratrix, of JL
Reynoso: A.V. Reynoso; for 1 year @ 4K/month. In the contract, stipulated is a first priority
in favour of PR. On 11.3.76, Reynoso notified PR by mail that she was selling @ 600k, and
was given 30 days to accept, and expects PR to vacate after. On 1.20.77 Reynoso adviced
PRs that the land was already sold. Upon receiving, PR denied receiving the 11.5.76 letter.
On 3.7.77 said land was formally sold to P, giving 137.5K and the rest, upon leaving of PR.
On 4.12.77 Reynoso wrote to PR, demanding that they vacate w/in 15D, for failing to pay
rentals for 4 months, refusing, Reynoso sued for ejectment, after w/c a settlement was
reached that PR will vacate peacefully not later than 10.31.79, failing to leave, Reynoso
motioned for execution. PR demanded that receipts be presented to argue their claim that
they paid. PR then sued for annulment of the sale to P, and asked that said property be sold
to him. Ejectment was granted, appealed City court ruled in favour of PR, affirmed by the
CA, hence this.
I: WON the sale to P may be rescinded.
R: Petition Denied. Under Article 1380 to 1381(3) of the Civil Code, a contract otherwise
valid may nonetheless be subsequently rescinded by reason of injury to third persons, like
creditors. The status of creditors could be validly accorded the Bonnevies for they had
substantial interests that were prejudiced by the sale of the subject property to the
petitioner without recognizing their right of first priority under the Contract of Lease.
We nevertheless agree with the observation of the respondent court that: If GuzmanBocaling failed to inquire about the terms of the Lease Contract, which includes Par. 20 on
priority right given to the Bonnevies, it had only itself to blame. Having known that the
property it was buying was under lease, it behooved has a prudent person to have required
Reynoso or the broker to show to it the Contract of Lease in which Par. 20 is contained.
Reynoso claimed to have sent the November 3, 1976 letter by registered mail, but the
registry return card was not offered in evidence. What she presented instead was a copy of
the said letter with a photocopy of only the face of a registry return card claimed to refer to
the said letter. A copy of the other side of the card showing the signature of the person
who received the letter and the date of the receipt was not submitted. There is thus no
satisfactory proof that the letter was received by the Bonnevies.

PUP v. CA & Firestone Ceramics (Consolidated) / GR No(s). 143513&143590 / 11.14.01 /

Sales / Bellosillo, J p:
F: To pre-empt the impending sale of the (National Devt Co.) NDC compound to petitioner
PUP, FIRESTONE filed an action for specific performance to compel NDC to sell the leased
property in its favor in the exercise of its contractual right of first refusal. After trial, the
lower court and the CA held that FIRESTONE could exercise its option to purchase the
property until 2 June 1999 inasmuch as its lease contract with NDC dated 22 December
1978 embodied a covenant to renew the lease for another ten (10) years at the option of
FIRESTONE (the lessee) as well as an agreement giving FIRESTONE the right of first refusal.
On appeal, petitioners claimed: that there was no consideration paid by FIRESTONE to
entitle it to the exercise of the right of first refusal; and that public welfare or the
constitutional priority accorded to education would greatly be prejudiced. CFI and CA ruled
in favour of Firestone, hence this.
I: WON there is a right of first refusal.
R: Dismissed. The right of first refusal is an integral and indivisible part of the contract of
lease and is inseparable from the whole contract. The consideration for the right is built
into the reciprocal obligations of the parties. Thus, it is not correct for petitioners to insist
that there was no consideration paid by FIRESTONE to entitle it to the exercise of the right,
inasmuch as the stipulation is part and parcel of the contract of lease making the
consideration for the lease the same as that for the option. It is a settled principle in civil
law that when a lease contract contains a right of first refusal, the lessor is under a legal
duty to the lessee not to sell to anybody at any price until after he has made an offer to sell
to the latter at a certain price and the lessee has failed to accept it.
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.
Education may be prioritized for legislative or budgetary purposes, but we doubt if such
importance can be used to confiscate private property such as FIRESTONE's right of first
refusal.

Rosencor Devt Co. & Joaquin v. Inquing et al. / GR No. 140479 / 3.8.01 / Sales /
GONZAGA-REYES, J p:
F: PRs are leasing in a residential apartment owned by Sps Tiangco w/ no contract. When
Sps Tiangco died the heirs thru their administrator Eufrocina de Leon, sent an offer to the
lessees that the property is for sale to them for 2M, PRs countered w/ 1M. Apparently, Sps
Tiangco orally gave the PRs the pre-emptive right to purchase the property. Eufrocina told
PRs that she will consult w/ the other heirs. In Nov. 1990 Rosencor (P) came to the property
and announced that he had already bought the land for 726K. PRs offered to buy said
property back from P for 1M, which was refused. PR sued for the annulment of the DOS. CFI
ruled in favour of P, CA reversed and ordered the rescission of the DOS. Hence this.
I: WON CA erred in ordering the rescission.
R: Reversed and Set Asid. The Court ruled that the appellate court erred in ordering the
rescission of the Deed of Absolute Sale between petitioner Rosencor and the heirs of the
spouses Tiangco thru Eufrocina de Leon. A contract validly agreed upon may only be
rescinded if it is undertaken in fraud of creditors. In the case at bar, the right of first refusal
involved was an oral one given to respondents by the deceased spouses Tiangco and
subsequently recognized by their heirs. As such, in order to hold that petitioners were in
bad faith, there must be clear and convincing proof that they were made aware of the said
right of first refusal either by the respondents or by the heirs of the spouses Tiangco. The
evidence on record, however, failed to show that petitioners acted in bad faith in entering
into the deed of sale over the disputed property with the heirs of the spouses Tiangco.
Respondents, on the other hand, failed to present any evidence that prior to the sale of the
property on September 4, 1990, petitioners were aware or had notice of the oral right of
first refusal.
The Court, however, made it clear that that its present ruling did not mean that
respondents are left without any remedy. Their remedy is not an action for the rescission of
the Deed of Absolute Sale but an action for damages against the heirs of the spouses
Tiangco for the unjustified disregard of their right of first refusal.

State Investment v. CA, et al. / GR No. 115548 / 3.5.96 / Sales / Francisco, J p:

F: 10.15.69, A contract to sell was executed by Sps Canuto & A. Oreta & the solid homes,
involving a land for 39.3K and the rest will be paid monthly w/ interest. On 11.4.76 Solid
executed several real estate mortgage contracts in favour of P, including the one sold to
Oreta. For failure to pay P extra judicially foreclosed the properties. On 8.15.88 Oreta sued
in the HLURB against P and Solid. HLURBs OALLA ruled in favour of Oreta, ordering the
execution of the contract. Solid and P appealed to OP w/c was dismissed by the OP. Hence
this.
I: WON the mortgage was valid.
R: Affirmed. It is a settled rule that a purchaser or mortgagee cannot close its eyes to facts
which should put a reasonable man upon his guard, and then claim that he acted in good
faith under the belief that there was no defect in the title of the vendor or mortgagor.
Petitioner's constructive knowledge of the defect in the title of the subject property, or lack
of such knowledge due to its negligence, takes the place of registration of the rights of
respondents-spouses. Respondent court thus correctly ruled that petitioner was not a
purchaser or mortgagee in good faith; hence petitioner cannot solely rely on what merely
appears on the face of the Torrens Title.
In this case, petitioner was well aware that it was dealing with SOLID, a business entity
engaged in the business of selling subdivision lots. In fact, the OAALA found that "at the
time the lot was mortgaged, respondent State Investment House, Inc., [now petitioner] had
been aware of the lot's location and that said lot formed part of Capital Park/Homes
Subdivision." In Sunshine Finance and Investment Corp. v. Intermediate Appellate Court,
the Court, noting petitioner therein to be a financing corporation, deviated from the
general rule that a purchaser or mortgagee of a land is not required to look further than
what appears on the face of the Torrens Title. The above-enunciated rule should apply in
this case as petitioner admits of being a financing institution. We take judicial notice of the
uniform practice of financing institutions to investigate, examine and assess the real
property offered as security for any loan application especially where, as in this case, the
subject property is a subdivision lot located at Quezon City, M.M.

Sps David et al. v. A & G Tiongson / GR No. 108169 / 8.25.99 / Sales / Pardo, J p:
F: On 2.23.89, 3 lots were sold by the PR to Sps Ventura, David & Vda De Basco. The parties
expressly agreed that the DOSs and CTs will be issued upon their full payment. P then built
a house on their lot, and managed to fully pay (w/ receipts), and demanded the issuance of
PRs DOS and CT, PR refused. Suing ensued, CFI found PRs in default for failure to answer. At
the CA, PRs argued that P and the others have yet to fully pay, hence they did not issue. CA
found for P and Ventura that there was no meeting of the minds.
I: WON there is a meeting of the minds as to validate the contract.
R: Reversed. At any rate, we rule that there was a perfected contract. However, the statute
of frauds is inapplicable. The rule is settled that the statute of frauds applies only to
executory and not to completed, executed, or partially executed contracts. In the case of
spouses David, the payments made rendered the sales contract beyond the ambit of the
statute of frauds. The Court of Appeals erred in concluding that there was no perfected
contract of sale. However, in view of the stipulation of the parties that the deed of sale and
corresponding certificate of title would be issued after full payment, then, they had entered
into a contract to sell and not a contract of sale.
We find that the 109 sq. m. lot was adequately described in the receipt, or at least, can be
easily determinable. The receipt issued on June 4, 1983 stated that the lot being purchased
by Florencia was the one earlier earmarked for her sister, Rosita Muslan. Thus, the subject
lot is determinable. Any mistake in the designation of the lot does not vitiate the consent of
the parties or affect the validity and binding effect of the contract of sale. The receipt
issued on September 1, 1983 clearly described the lot area as 109 sq. m. It also showed that
Florencia had fully paid the purchase price.

Villanueva v. CA, Sps Dela Cruz & Sps Guido & Pile / GR No. 107624 / 1.28.97 / Sales /
PANGANIBAN, J p:
F: P, is a tenant of PR, in 2.86 PR offered the lot and property, w/c P was interested in. Said
property is in arrears as to realty tax and it was agreed that 10K will be advanced to PR to
pay for the tax. PR then went to P and discussed that a co-tenant (Mr. Sabio) would also like
half of the property, it was agreed. PR secured to CTs and Sabio immediately paid for his
part. On 3.6.87 PR executed in favour of PR Guido a DOA for the part of P, apparently PR is
in debt to PR Pili and said lot shall be the payment. Suing ensued. CFI ruled in favour of PR,
CA affirmed hence this.
I: The main issue here is whether a contract of sale has been perfected.
R: Affirmed. The price must be certain, it must be real, not fictitious. A contract of sale is
not void for uncertainty when the price, though not directly stated in terms of pesos and
centavos, can be made certain by reference to existing invoices identified in the agreement.
In this respect, the contract of sale is perfected. The price must be certain, otherwise there
is no true consent between the parties. There can be no sale without a price. In the instant
case, however, what is dramatically clear from the evidence is that there was no meeting
of mind as to the price, expressly or impliedly, directly or indirectly. Sale is a consensual
contract. He who alleges it must show its existence by competent proof. Here, the very
essential element of price has not been proven.
The civil law rule on double sale finds no application because there was no sale at all to
begin with. What took place was only a prolonged negotiation to buy and to sell, and at
most, an offer and a counter-offer but no definite agreement was reached by the parties.
Hence, the rules on perfected contract of sale, statute of frauds and double sale find no
relevance nor application.

Traders Royal Bank v. CA, FGA, & CB / GR No. 93397 / 3.3.97 / Sales Right to Transfer
Ownership / TORRES, JR., J p:
F: On 11.27.79, Filriters (thru Alfredo Banaria) sold and transferred to Philfinance CBCIs
worth 3.5M. On 2.4.81, P repurchased CBCI D891 for 500k, the repurchase agreement
stipulated that such will be repurchased again from P for 519.3k on 4.27.81, w/c Philfinance
failed to do because the checks was dishonored. Because of this Philfinance executed a
Detached Assignment in favor of P, by which Philfinance transferred and assigned all its
rights & title in the said CBCI, and authorized CB to transfer the same to P. When P went to
CB for the issuance of a new certificate for absolute ownership it was refused. CB holds
that the requirements arent complied with. Suing ensued, Filriters claimed the ownership
to be void, as such, the assignment was w/o authorization from the board, purportedly for
and in favor of Filriters, and ultimately it was fictitious, and therefore void and inexistent,
also, since such CBCI isnt a negotiable instrument. CFI ruled in favor of, appealed in the CA
failed, hence this.
I: WON such instrument may be transferred, even though it isnt a negotiable instrument.
R: Petition dismissed. The transfer made by Filriters to Philfinance did not conform to the
said Central Bank Circular, which for all intents, is considered part of the law.
The language of negotiability which characterizes a negotiable paper as a credit instrument
is its freedom to circulate as a substitute for money. This freedom in negotiability is totally
absent in a certificate of indebtedness as it merely acknowledges to pay a sum of money
to a specified person or entity for a period of time.
Petitioner, being a commercial bank, cannot feign ignorance of Central Bank Circular 769,
and its requirements. An entity which deals with corporate agents within circumstances
showing that the agents are acting in excess of corporate authority, may not hold the
corporation liable. The unauthorized use or distribution of the same by a corporate officer
of Filriters cannot bind the said corporation, not without the approval of its Board of
Directors, and the maintenance of the required reserve fund. Consequently, the title of
Filriters over the subject certificate of indebtedness must be upheld over the claimed
interest of Traders Royal Bank.
Piercing the veil of corporate entity requires the court to see through the protective shroud
which exempts its stockholders from liabilities that ordinarily, they could be subject to or
distinguishes one corporation from a seemingly separate one, were it not for the existing
corporate fiction. But to do this, the court must be sure that the corporate fiction was
misused, to such an extent that injustice, fraud, or crime was committed upon another,
disregarding, thus, his, her, or its rights. It is the protection of the interests of innocent third
persons dealing with the corporate entity which the law aims to protect by this doctrine.

De Leon v. Salvador; Bernabe v. Cruz GR Nos. L-30871; L-31603 12.28.70 / Sales /

Teehankee, J p:
F: In the original case (CFI Caloocan Branch of Judge Cruz), Enrique De Leon obtained
favorable decision against judgment debtor or respondent Bernabe. By virtue of the
favorable decision, two properties of Bernabe were sold in auction. Petitioner De Leon won
the auction. The one-year redemption period lapsed without Bernabe redeeming the
property, and thus, a Certificate of Sale was issued in favor of De Leon.
In the meantime and before the expiration of the one year redemption period, Bernabe
filed a civil case against Enrique De Leon (judgment creditor), Sheriff of Judge Cruz, and De
Leon as the winning bidder on the alleged irregularity during the auction sale, with another
CFI Caloocan Branch of Judge Salvador). Judge Salvador issued injunction order enjoining
the sale of the properties in favor of De Leon. Further, Judge Bernabe issued an order to the
Sheriff to allow Bernabe to redeem the properties. Bernabe was able to obtain the titles
again. Hence Petitioner De Leon filed a case of certiorari on the orders issued by Judge
Salvador. One of the reasons alleged by Bernabe on the irregularity of the auction sale is
the inadequate price set during the auction.
I: WON the forced sale/execution is valid. Was the auction sale invalid due to inadequacy of
price?
R: As to the alleged inadequacy of price of Php30,194.00 when the properties could have
been sold for at least Php385,000.00 It is not a ground to invalidate the auction sale in favor
of De Leon. General Rule: In ordinary sales, for reasons of equity in transactions, the sale
may be invalidated due to gross inadequacy of price.
Exception: In case of Forced Sales (i.e. sale at public auction) wherein the law gives the
owner the right to redeem, the theory is that the lesser the price, the easier for the owner
to redeem the property.
As to jurisdiction, the Judge Cruz's court has jurisdiction over the case from excution sale
upto the issuance of Sheriff's Certificate of Sale in favor of the winning bidder/judgment
creditor. Judge Salvador's court cannot interfere with the orders of the Judge Cruz's court.
They are of equal level of courts and Judge Cruz's court acquired original jurisdiction of the
case.

De Leon v. Salvador; Bernabe v. Cruz GR Nos. L-30871; L-31603 12.28.70 / Sales /

Teehankee, J p:
F: In the original case (CFI Caloocan Branch of Judge Cruz), Enrique De Leon obtained
favorable decision against judgment debtor or respondent Bernabe. By virtue of the
favorable decision, two properties of Bernabe were sold in auction. Petitioner De Leon won
the auction. The one-year redemption period lapsed without Bernabe redeeming the
property, and thus, a Certificate of Sale was issued in favor of De Leon.
In the meantime and before the expiration of the one year redemption period, Bernabe
filed a civil case against Enrique De Leon (judgment creditor), Sheriff of Judge Cruz, and De
Leon as the winning bidder on the alleged irregularity during the auction sale, with another
CFI Caloocan Branch of Judge Salvador). Judge Salvador issued injunction order enjoining
the sale of the properties in favor of De Leon. Further, Judge Bernabe issued an order to the
Sheriff to allow Bernabe to redeem the properties. Bernabe was able to obtain the titles
again. Hence Petitioner De Leon filed a case of certiorari on the orders issued by Judge
Salvador. One of the reasons alleged by Bernabe on the irregularity of the auction sale is
the inadequate price set during the auction.
I: WON the forced sale/execution is valid. Was the auction sale invalid due to inadequacy
of price?
R: As to the alleged inadequacy of price of Php30,194.00 when the properties could have
been sold for at least Php385,000.00 It is not a ground to invalidate the auction sale in favor
of De Leon. General Rule: In ordinary sales, for reasons of equity in transactions, the sale
may be invalidated due to gross inadequacy of price.
Exception: In case of Forced Sales (i.e. sale at public auction) wherein the law gives the
owner the right to redeem, the theory is that the lesser the price, the easier for the owner
to redeem the property.
As to jurisdiction, the Judge Cruz's court has jurisdiction over the case from excution sale
upto the issuance of Sheriff's Certificate of Sale in favor of the winning bidder/judgment
creditor. Judge Salvador's court cannot interfere with the orders of the Judge Cruz's court.
They are of equal level of courts and Judge Cruz's court acquired original jurisdiction of the
case.