Labagala vs.

Santiago
December 4, 2001
Second Division
Ponente: Quisumbing, J.

GR No. 132305

Facts: Jose T. Santiago owned a parcel of land. Alleging that Jose had fraudulently registered it in his name
alone, his sisters Nicolasa and Amanda Santiago (respondents), sued Jose for recovery of 2/3 share of the
property. On April 20, 1981, the trial court in that case decided in favor of the sisters, recognizing their right
of ownership over portions of the property. Jose died intestate. Thereafter, the respondents filed an action
before the Regional Trial Court of Manila seeking to recover Joses 1/3 share over the property.
Respondents claim that Joses share in the property ipso jure belongs to them because they are the only
legal heirs of their brother, who died intestate and without issue. They allege that it is highly improbable for
petitioner to have paid the supposed consideration of P150,000 for the sale of the subject property because
petitioner was unemployed and without any visible means of livelihood at the time of the alleged sale.
Petitioner Labagala, on the other hand, claims that she is the daughter of Jose and argued that the
purported sale of the property was in fact a donation to her.
The RTC held that while there was indeed no consideration for the deed of sale executed by Jose in favor of
petitioner, but said deed constitutes a valid donation.
On appeal, the Court of Appeals reversed the decision of the RTC
Issue: Whether the purported deed of sale was valid
Held: There is no valid sale.
Clearly, there is no valid sale in this case. Jose did not have the right to transfer ownership of the entire
property to petitioner since 2/3 thereof belonged to his sisters. Petitioner could not have given her consent
to the contract, being a minor at the time. Consent of the contracting parties is among the essential
requisites of a contract, including one of sale, absent which there can be no valid contract. Moreover,
petitioner admittedly
did not pay any centavo for the property, which makes the sale void. Article 1471 of the Civil Code provides:
If the price is simulated, the sale is void, but the act may be shown to have been in reality a donation, or
some other act or contract.

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CORNELIA MATABUENA vs. PETRONILA CERVANTES

L-2877 (38 SCRA 284)
March 31, 1971
FACTS:
In 1956, herein appellants brother Felix Matabuena donated a piece of lot to his common-law
spouse, herein appellee Petronila Cervantes. Felix and Petronila got married only in 1962 or six years after
the deed of donation was executed. Five months later, or September 13, 1962, Felix died. Thereafter,
appellant Cornelia Matabuena, by reason of being the only sister and nearest collateral relative of the
deceased, filed a claim over the property, by virtue of a an affidavit of self-adjudication executed by her in
1962, had the land declared in her name and paid the estate and inheritance taxes thereon. The lower court
of Sorsogon declared that the donation was valid inasmuch as it was made at the time when Felix and
Petronila were not yet spouses, rendering Article 133 of the Civil Code inapplicable.
ISSUE: Whether or not the ban on donation between spouses during a marriage applies to a common-law
relationship.
HELD:
While Article 133 of the Civil Code considers as void a donation between the spouses during
marriage, policy consideration of the most exigent character as well as the dictates of morality requires that
the same prohibition should apply to a common-law relationship.
As stated in Buenaventura vs. Bautista (50 OG 3679, 1954), if the policy of the law is to prohibit
donations in favor of the other consort and his descendants because of fear of undue and improper pressure
and influence upon the donor, then there is every reason to apply the same prohibitive policy to persons
living together as husband and wife without the benefit of nuptials.
The lack of validity of the donation by the deceased to appellee does not necessarily result in
appellant having exclusive right to the disputed property. As a widow, Cervantes is entitled to one-half of
the inheritance, and the surviving sister to the other half.
Article 1001, Civil Code: Should brothers and sisters or their children survive with the widow or
widower, the latter shall be entitled to one-half of the inheritance and the brothers and sisters or their
children to the other half.

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JOSE LAGONv. HOOVEN COMALCO INDUSTRIES

G.R. No. 135657 January 17, 2001
FACTS:
Petitioner is the owner of a commercial building while respondent is a domestic corporation known to be
the biggest manufacturer and installer of aluminum materials in the country. Parties entered into 2 contracts
whereby for a total consideration of P104,870. Hooven agreed to sell and install various aluminum materials
in Lagons building. Upon execution of contracts, Lagon paid Hooven P48,000 in advance. On February 24,
1987, Hooven commenced an action for sum of money. It was alleged that materials were delvered and
installed but P69,329 remained unpaid even after the completion of the project and despite repeated
demands. RTC held partly on the basis of the ocular inspection finding that the total actual deliveries cost
P87,140 deducting therefrom P48,000. CA set aside the decision and held in favor of Hooven.
ISSUE:
Whether all the materials specified in the contracts had been delivered and installed by respondent in
petitioners commercial building
RULING:
Essentially, respondent has the burden of establishing its affirmative allegations of complete delivery and
installation of the materials and petitioners failure to pay therefor. The evidence on its discharge is grossly
anemic. The CA decision is modified. Lagon is ordered to pay respondent P6,377.66 representing the value
unpaid. On the other hand, respondent is ordered to pay petitioner P50,000 as moral damages, P30,000
attorneys fees and P46,554.50 as actual damages.

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TOYOTA SHAW, INC. vs. COURT OF APPEALS

G.R. No. L-116650 May 23, 1995
Facts:
Sometime in June of 1989, Luna L. Sosa wanted to purchase a Toyota Lite Ace. It was then a sellers market
and Sosa had difficulty finding a dealer with an available unit for sale. But upon contacting Toyota Shaw, Inc.,
he was told that there was an available unit. So on 14 June 1989, Sosa and his son, Gilbert, went to the
Toyota office at Shaw. There they met Popong Bernardo, a sales representative of Toyota.
Sosa emphasized to Bernardo that he needed the Lite Ace not later than 17 June 1989 because he, his
family, and a balikbayan guest would use it on 18 June 1989 to go to Marinduque, his home province, where
he would celebrate his birthday on the 19th of June. He added that if he does not arrive in his hometown
with the new car, he would become a laughing stock. Bernardo assured Sosa that a unit would be ready for
pick up at 10AM on 17 June 1989. Bernardo then signed the Agreements Between Mr. Sosa & Popong
Bernardo of Toyota Shaw, Inc. P100 thousand was the downpayment, but the purchase price was not
mentioned in the contract. It was also agreed upon by the parties that the balance of the purchase price
would be paid by credit financing through B.A. Finance.
Toyota contends, however, that the Lite Ace was not delivered to Sosa because of the disapproval by B.A.
Finance of the credit financing application of Sosa. It further alleged that a particular unit had already been
reserved and earmarked for Sosa but could not be released due to the uncertainty of payment of the
balance of the purchase price. Toyota then gave Sosa the option to purchase the unit by paying the full
purchase price in cash but Sosa refused. The financing corporation seemed to have not approved Sosas
application.
Issue: WON there was a perfected contract of sale? NO
Held:
Exhibit A or the Agreement is NOT a perfected contract of sale.
Nothing was mentioned about the full purchase price and the manner the installments were to be paid. A
definite agreement on the manner of payment of the price is an essential element in the formation of a
binding and enforceable contract of sale. This is so because the agreement as to the manner of payment
goes into the price such that a disagreement on the manner of payment is tantamount to a failure to agree
on the price. Definiteness as to the price is an essential element of a binding agreement to sell personal
property.
Exhibit A shows the absence of a meeting of minds between Toyota and Sosa. For one thing, Sosa did not
even sign it. He was not dealing with Toyota but with Popong Bernardo. Bernardo was only a sales
representative of Toyota and hence a mere agent of the latter.
Exhibit A may be considered as part of the initial phase of the generation or negotiation stage of a contract
of sale. Accordingly, in a sale on installment basis which is financed by a financing company, three parties are
thus involved: the buyer who executes a note or notes for the unpaid balance of the price of the thing
purchased on installment, the seller who assigns the notes or discounts them with a financing company, and
the financing company which is subrogated in the place of the seller, as the creditor of the installment buyer.
Since B.A. Finance did not approve Sosas application, there was then no meeting of minds on the sale on
installment basis.
The Vehicle Sales Proposal was a mere proposal which was aborted in lieu of subsequent events. It follows
that the VSP created no demandable right in favor of Sosa for the delivery of the vehicle to him, and its nondelivery did not cause any legally indemnifiable injury.

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ROMULO A. CORONEL, ET. AL., petitioners,

vs.
COURT OF APPEALS, CONCEPCION D. ALCARAZ
and RAMONA PATRICIA ALCARAZ ,respondents.

G.R. No. 103577

October 07, 1996

FACTS:
Coronel et al. consummated the sale of his property located in Quezon City to respondent Alcaraz. Since the
title of the property was still in the name of the deceased father of the Coronels, they agreed to transfer its
title to their name upon payment of the down payment of 50K. and thereafter an absolute deed of sale will
be executed.
Alcarazs mother paid the down payment in behalf of her daughter and as such, Coronel made the transfer
of title to their name. Notwithstanding this fact, Coronel sold the property to petitioner Mabanag and
rescinded its prior contract with Alcaraz.
ISSUE:
WON the rescission of the first contract between Coronel and Alcaraz is valid.
HELD:
The case is a contract of sale subject to a suspensive condition in which consummation is subject only to the
successful transfer of the certificate of title from the name of petitioners' father, to their names. Thus, the
contract of sale became obligatory.
With regard to double sale, the rule that the first in time, stronger in right should apply. The contention of
the petitioner that she was a buyer in good faith because the notice of lis pendens in the title was annotated
after she bought the property is of no merit. In case of double sale, what finds relevance and materiality is
not whether or not the second buyer was a buyer in good faith but whether or not said second buyer
registers such second sale in good faith, that is, without knowledge of any defect in the title of the property
sold.
The ruling should be in favor of Alcaraz because Mabanag registered the property two months after the
notice of lis pendens was annotated in the title and hence, she cannot be a buyer in good faith.

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Toyota Shaw Inc. vs. Court of Appeals, and Sosa

244 SCRA 320
May 1995
FACTS:
Luna L. Sosa and his son, Gilbert, went to purchase a yellow Toyota Lite Ace from the Toyota office at Shaw
Boulevard, Pasig (petitioner Toyota) on June 14, 1989 where they met Popong Bernardo who was a sales
representative of said branch. Sosa emphasized that he needed the car not later than June 17, 1989 because
he, his family, and a balikbayan guest would be using it on June 18 to go home to Marinduque where he will
celebrate his birthday on June 19. Bernardo assured Sosa that a unit would be ready for pick up on June 17
at 10:00 in the morning, and signed the "Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw,
Inc., a document which did not mention anything about the full purchase price and the manner the
installments were to be paid. Sosa and Gilbert delivered the down payment of P100,000.00 on June 15, 1989
and Bernardo accomplished a printed Vehicle Sales Proposal (VSP) No. 928 which showed Sosas full name
and home address, that payment is by "installment," to be financed by "B.A.," and that the "BALANCE TO BE
FINANCED" is "P274,137.00", but the spaces provided for "Delivery Terms" were not filled-up.
When June 17 came, however, petitioner Toyota did not deliver the Lite Ace. Hence, Sosa asked that his
down payment be refunded and petitioner Toyota issued also on June 17 a Far East Bank check for the full
amount of P100,000.00, the receipt of which was shown by a check voucher of Toyota, which Sosa signed
with the reservation, "without prejudice to our future claims for damages." Petitioner Toyota contended
that the B.A. Finance disapproved Sosas the credit financing application and further alleged that a particular
unit had already been reserved and earmarked for Sosa but could not be released due to the uncertainty of
payment of the balance of the purchase price. Toyota then gave Sosa the option to purchase the unit by
paying the full purchase price in cash but Sosa refused.
The trial court found that there was a valid perfected contract of sale between Sosa and Toyota which bound
the latter to deliver the vehicle and that Toyota acted in bad faith in selling to another the unit already
reserved for Sosa, and the Court of Appeals affirmed the said decision.
ISSUE:
Was there a perfected contract of sale between respondent Sosa and petitioner Toyota?
COURT RULING:
The Supreme Court granted Toyotas petition and dismissed Sosas complaint for damages because the
document entitled Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc., was not a
perfected contract of sale, but merely an agreement between Mr. Sosa and Bernardo as private individuals
and not between Mr. Sosa and Toyota as parties to a contract.
There was no indication in the said document of any obligation on the part of Toyota to transfer ownership
of a determinate thing to Sosa and neither was there a correlative obligation on the part of the latter to pay
therefor a price certain. The provision on the downpayment of P100,000.00 made no specific reference to a
sale of a vehicle. If it was intended for a contract of sale, it could only refer to a sale on installment basis, as
VSP No.928 executed on June 15, 1989 confirmed. The VSP also created no demandable right in favor of
Sosa for the delivery of the vehicle to him, and its non-delivery did not cause any legally indemnifiable injury.

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In Uraca vs. Court of Appeals (86 SCAD 734, 278 SCRA 702 [1997].),
S sent a letter to B, offering to sell a lot and commercial building for P1,050,000. B sent a reply-letter within
the 3-day period contained in the offer accepting the aforesaid offer. Later, B was told by S that the price
was P1,400,000 in cash or managers check and not P1,050,000 as erroneously dated in the letter-offer.
B agreed to the price of P1,400,000 but counter-proposed that payment be paid in installments, with a down
payment of P1,000,000 and the balance of P400,000 to be paid in 30 days. It was held that a contract of sale
was perfected at the original price of P1,050,000 but there was no agreement in the sale at the increased
price of P1,400,000. The qualified acceptance by B constitutesa counter-offer and, in effect, a rejection of Ss
offer. (Art.1319.) Since there was no definite agreement on the manner of the payment of the purchase
price of P1,400,000, the first sale for P1,050,000 remained valid and existing. Although the law does not
expressly state that the minds of the parties must also meet on the terms or manner of payment of the
price, the same is needed. Agreement on the manner of payment goes into the price such that a
disagreement on the manner of payment is tantamount to failure to agree on the price. (Toyota Shaw, Inc.
vs. Court of Appeals, 61 SCAD 310, 244 SCRA 320 [1995]; San Miguel Properties Philippines, Inc. vs. Huang,
130 SCAD 713, 336 SCRA 737 [2000].) An agreement on the price but a disagreement on the manner of its
payment will not result in consent. This lack of consent is separate and distinct from lack of consideration
where the contract states that the price has been paid when in fact it has never been paid. (Montecillo vs.
Reyes, 170 SCAD 440, 385 SCRA 244 [2002], infra.)

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