FIRST GROUP LAW OFFICE

CONTRACTS AND
AGREEMENTS
LEGAL FORMS
2018
Nature of a Contract involving a Real Property
ESSENTIAL ELEMENT
In general, the rules governing a simple contract also apply to a
contract of sale. The following must be present:
 Consent or meeting of the minds wherein 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 thereof. This is
when the seller agrees to deliver the thing subject of the contract
and the buyer, the price thereof. The essence of this is that the
parties agree to the terms of the contract which will bind them.

 Object or subject matter or the determinate thing, as what the law

referred to which the seller is bound to deliver and the buyer is
bound to receive upon payment of its sum.

 Cause or consideration or the price certain in money or its equivalent

which does not include goods or merchandise although they have
their own value in money. Its equivalent may mean any goods given
as the token of payment and where these are assessed and
evaluated as its price equivalent. The price however must not be
fictitious or else it would be void.

CHARACTERISTICS
 Consensual because it can be perfected by the mere giving of
consent and meeting of the minds of the parties;

 Bilateral because both of the parties are bound to fulfil correlative

obligations such as the seller is to deliver the thing which is the
subject of the contract and the buyer, to pay the price;

 Onerous because the thing sold is conveyed in exchange for the

purchase price and the price is in consideration of the thing sold;

 Nominate because it is given a name in the Civil Code

 Principal because it does not require the existence of another

contract for it to be valid and existing.

Together with the basic element of a contract; a contract involving a

real property must be:
A. Written
B. In a public instrument.
C. Registered with the Register of deeds

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Under Philippine law, the purchase of real property must be in a public
instrument in order for the purchase to be registered with the Register of
Deeds. Thus, the Contract shall only be considered public instruments in
the Philippines if attested by a notary public and, if executed outside the
Philippines, authenticated by the Philippine consul as to the due execution
of the relevant document or instrument in the country where such
document or instrument was executed.

NOTARIZATION OR CONSULARIZATION
Notarization is the process by which the person executing the document
personally appears in person before a Philippine notary public and
represents to such notary public that the signature on the instrument or
document was voluntarily affixed by him for the purposes stated in the
instrument or document, declares that he has executed the instrument or
document as his free and voluntary act and deed and, if he acts in a
particular representative capacity, that he has the authority to sign in that
capacity. Consularization is the process by which the consular agent or
officer in the foreign service of the Philippines stationed in the country
where the record is kept authenticates a document by the seal of its office.
A document is deemed consularized when executed before and notarized
by a foreign notary, and such notarization is authenticated by the Philippine
consular agent or officer, or when directly authenticated by such Philippine
consular agent or officer, in either case, sealed by the seal of the office of
the Philippine consul. A listing of consular offices may be found iin the
website of the Philippine Department of Foreign Affairs

REQUIREMENTS FOR EXECUTION

Execution of documents means the signing and accomplishment of
documents under the proper, legally prescribed conditions, such as before
witnesses if required.

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DEED OF SALE OF UNREGISTERED LAND
LEGAL BASIS
Sps Dadizon vs CA G.R. No. 159116 September 30, 2009

 The mere execution of a deed of sale covering an unregistered parcel

of land is not enough to bind third persons. A succeeding step - the
registration of the sale - has to be taken. Indeed, registration is the
operative act to convey or affect the unregistered land insofar as
third persons are concerned.
 for the non-registration of the deed meant that the sale could not
bind third parties like the respondents. The transaction affecting
unregistered lands covered by an unrecorded contract, if legal, might
be valid and binding on the parties themselves, but not on third
parties. In the case of third parties, it was necessary for the contract
to be registered.

Sec. 113 of Presidential Decree No. 1529, also known as the Property
Registration

 Section 113. Recording of instruments relating to unregistered lands.-

No deed, conveyance, mortgage, lease, or other voluntary
instrument affecting land not registered under the Torrens system
shall be valid, except as between the parties thereto, unless such
instrument shall have been recorded in the manner herein
prescribed in the office of the Register of Deeds for the province or
city where the land lies.

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 DEED OF ABSOLUTE SALE OF AN UNREGISTERED LAND

KNOW ALL MEN BY THESE PRESENTS:

This DEED made and executed by and between:

BEATRIZ M. HERRERA, married, Filipino and a resident of Ajat,

Iguig, Cagayan; FELICITAS C. MALLARI, married, Filipino and a
resident of Ajat, Iguig, Cagayan; and JOHN C. MARALLI married,
Filipino and a resident of 23-A Gen. Aguinaldo St., Signal Village, Taguig
City, hereto referred as the vendors;

in favor of

LAURENCE LADAY MARET, of legal age, Filipino, single and a

resident of Garab, Iguig, Cagayan, hereunto referred as the vendee.

WITNESSETH

That the Vendors are the owners of a parcel of land located at Garab,
Iguig, Cagayan, and more particularly described and bounded as follows:

“A parcel of land designated as Lot No. 953 covered

by Tax Declaration No. 3751; bounded on the North
by Brigida Ballesteros property on the South by
School site; on the West by Juan Pascual property
and on the East by Isidro Antonio property
containing an area of eight thousand square meters
(8,000) square meters more or less.”

That the Vendors ownership is evidenced by a TAX

DECLARATION NO. 3751 of the Assessor’s Office of the Municipality of
Iguig, Cagayan;

That the Vendors by these presents do hereby SELL, TRANSFER

and CONVEY, the above described property unto the Vendee,
LAURENCE L. MARET in the amount of EIGHTY THOUSAND
PESOS (P80,000.00) pesos, Philippine Currency to the full satisfaction of
the Vendee;

That the Vendors hereby warrant the peaceful possession and

enjoyment of the property by the Vendee.

IN WITNESS WHEREOF, the parties have hereunto affixed their

signatures this _______ day of April, 2013 at Iguig, Cagayan.

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 FELICITAS C. MARALLI BEATRIZ M. HERRERA
Vendor Vendor
Com. Tax Cert. No. Com. Tax Cert. No.
Issued on Issued on

Issued at Issued at

JOHN C. MALLARI
Vendor
Com. Tax Cert. No.
Issued on

Issued at

WITNESS

______________________________

Republic of the Philippines)

Province of Cagayan ) S.S.
City of Tuguegarao )

BEFORE ME, a notary Public for and in the Province of Cagayan on

this day _____of ________________ 20___ personally appeared before me
BEATRIZ M. HERRERA, FELICITAS C. MARALLI and JOHN C.
MARALLI with their Community Tax Certificates appearing below their
names, respectively; known to me and to me known to be the same persons
who executed the foregoing instrument consisting of two (2) pages including
this page and acknowledged to me that the same is his/her free and voluntary
act and deed.

WITNESS MY HAND AND SEAL on the date and place first above
mentioned.

NOTARY
PUBLIC

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Doc. No.:
Page No.:
Book No.:

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DEED OF SALE OF REGISTERED LAND
According to Art. 1458 of the New Civil Code, it is defined as:

Article 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership and to deliver a determinate thing, and
the other to pay therefore a price certain in money or its equivalent.

Absolute Sale- one wherein there is no condition whatever and imposes

upon the vendor the obligation to deliver the real estate, subject matter of
the agreement to the vendee who upon the receipt of the property hands
over and pays the purchase price that has been previously agreed upon
with the vendor.

The Deed of Absolute Sale where both parties agree on and accept the real
estate to be or being conveyed and price therefore that the vendee should
pay for it. This transaction is the most common where the title of the real
estate, subject sale, is free from and clear of any alien or encumbrance
whatever. No other condition is necessary except the actual delivery and
transfer of the property to the vendee without delay. The deed will then be
registered to the proper Registry of Deeds as required by the Torrens
Registration Law.
Sale in Exchange or Barter where the real properties is subject to the
transaction is deeded in exchange of and for another real property that is
acceptable to the vendor without any additional monetary consideration. It
is essential in the transaction that the title of both properties in the
exchange is valid and unencumbered or free from any liens or
encumbrances of any nature.

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 DEED OF ABSOLUTE SALE

KNOW ALL MEN BY THESE PRESENTS

I, HERMIGILDA F. CATALAN , Filipino, of legal age, widow, and

a resident of 110 –H Lorega St., Cebu City is the true ,lawful and absolute
owner of a parcel of land in the Municipality of Consolacion, which parcel
of land is registered under my name as evidenced by Transfer Certificate of
Title No. 111-2014002696 issued by the Registry of Deeds of Mandaue
City, which property is particularly described as follows :

“ A PARCEL OF LAND (LOT 3, BLOCK 7 OF THE

CONSOLIDATION-SUBD. PLAN PCS – 07 – 0054 – 88 BEING A
PORTION OF THE CONSOLIDATION OF LOTS 149, 150 & 151,
GSS – 1262) SITUATED IN THE BARANGAY OF TAYUD,
MUNICIPALITY OF CONSOLACION, PROVINCE OF CEBU,
ISALND OF CEBU. BOUNDED ON POINT 1 BY LOT 25, BLOCK 7,
ON THE WEST, ALONG LINE 1 – 2 BY LOT 4 BLOCK 7 ; ON THE
NORTH, ALONG LINE 2 – 3 BY ROAD LOT 10 (6.50 M. WIDE) ;
ON THE EAST, ALONG LINE 3 – 4 BY LOT 2, BLOCK 7 ; ON
POINT A BY LOT 27, BLOCK 7 ; AND ON THE SOUTH , ALONG
LINE 4 – 1 BY LOT 26, BLOCK 7 , ALL OF THE CONSOLIDATION
– SUBD. PLAN. BEGINNING AT A POINT MARKED “1” ON PLAN
BEING S. 63 DEG. 28 ‘W., 1431.48 M. FROM MBM NO. 02, PLS –
823 , LILOAN, CEBU ; THENCE DUE NORTH, 08.00 M TO POINT
4 ; THENCE DUE WEST , 05.00 M TO THE POINT OF BEGINNING
; CONTAINING AN AREA OF FORTY (40) SQUARE METERS,
MORE OR LESS. ALL POINTS REFERRED TO ARE INDICATED
ON THE PLAN AND MARKED ON THE GROUND ARE PS.
CYL.CONC.MONS. 15 X 40 CM. BEARINGS TURE. DATE OF THE
ORIGINAL SURVEY FEBRUARY 19, 1968 AND THAT OF THE
CONSOLIDATION – SUBD. SURVEY, EXECUTED BY GEODTIC
ENGR., NORVIC S. ABELLA ON APRIL 05 2009 AND APPROVED
ON JULY 13, 2009.”

That for and in consideration of the sum of FIVE HUNDRED

THOUSAND PESOS (P500,000.00), Philippine Currency, receipt of which
in full is hereby acknowledged , I do hereby sell, transfer, and convey unto
and in favor of ARLENE CATALAN YAMADA, Filipino, of legal age,
married, and a resident of 110 – H Lorega St., Cebu City, as represented by

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her attorney-in-fact ETHEL GRACE CATALAN with authority under a
Special Power of Attorney, her heirs, successors, and assigns the above-
described property together with all the improvements found therein, free
from any and all liens and encumbrances.

I do hereby warrant to defend the peaceful ownership and possession

of the said property by the said vendee from any and all adverse claims of
any person or party whatsoever.

IN WITNESS WHEREOF, I have hereunto affixed my signature on

this 12th day of January 2016 at Cebu City, Philippines.

HERMIGILDA F. CATALAN ARLENE

CATALAN YAMADA

Vendor Vendee

As represented by :

ETHEL GRACE
CATALAN

Attorney-in-fact of Arlene
Catalan Yamda

Signed in the presence of :

______________________________
______________________________

ACKNOWLEDGMENT

BEFORE ME, a Notary Public, this 12th day of January 2106,

personally appeared the following :

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Name I.D Number
Place Issue

HERMIGILDA F. CATALAN Senior Citizen ID No.84817

Cebu City

ETHEL GRACE CATALAN Voters Identification No.2217-0581

-K1987EFC20000
Cebu City

Known to me and to me known to be the same persons who executed

the foregoing instrument and acknowledged to me that the same is their free
and voluntary act and deed.

This instrument consists of 2 pages including the page on which this

acknowledgement is written, has been signed on each and every page thereof
by the concerned parties and their witnesses, and sealed with my notarial
seal.

WITNESS MY HAND AND SEAL, on the date first above written

at Cebu City, Philippines.

Notary Public

Doc No. :___________

Page No. :___________

Book No. :___________

Series of :___________

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DEED OF ABSOLUTE SALE OF CONDOMINIUM UNIT
BASED ON REPUBLIC ACT NO. 4726 OR “AN ACT TO DEFINE
CONDOMINIUM, ESTABLISH REQUIREMENTS FOR ITS CREATION, AND
GOVERN ITS INCIDENTS.”

Sec. 2. A condominium is an interest in real property consisting of

separate interest in a unit in a residential, industrial or commercial building
and an undivided interest in common, directly or indirectly, in the land on
which it is located and in other common areas of the building. A
condominium may include, in addition, a separate interest in other portions
of such real property. Title to the common areas, including the land, or the
appurtenant interests in such areas, may be held by a corporation specially
formed for the purpose (hereinafter known as the "condominium
corporation") in which the holders of separate interest shall automatically
be members or shareholders, to the exclusion of others, in proportion to
the appurtenant interest of their respective units in the common areas.

Sec. 5. Any transfer or conveyance of a unit or an apartment, office or

store or other space therein, shall include the transfer or conveyance of the
undivided interests in the common areas or, in a proper case, the
membership or shareholdings in the condominium corporation: Provided,
however, That where the common areas in the condominium project are
owned by the owners of separate units as co-owners thereof, no
condominium unit therein shall be conveyed or transferred to persons
other than Filipino citizens, or corporations at least sixty percent of the
capital stock of which belong to Filipino citizens, except in cases of
hereditary succession. Where the common areas in a condominium project
are held by a corporation, no transfer or conveyance of a unit shall be valid
if the concomitant transfer of the appurtenant membership or stockholding
in the corporation will cause the alien interest in such corporation to
exceed the limits imposed by existing laws.

Sec. 9. The owner of a project shall, prior to the conveyance of any

condominium therein, register a declaration of restrictions relating to such
project, which restrictions shall constitute a lien upon each condominium in
the project, and shall insure to and bind all condominium owners in the
project. Such liens, unless otherwise provided, may be enforced by any
condominium owner in the project or by the management body of such
project. The Register of Deeds shall enter and annotate the declaration of
restrictions upon the certificate of title covering the land included within
the project, if the land is patented or registered under the Land
Registration or Cadastral Acts.

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DEED OF CONDITIONAL SALE

Conditional Sale-This is an agreement to sell or buy real estate with certain

conditions that must be accomplished by either or both the parties so as to
extinguish and or create ownership over the subject property. This is
merely an executory contract in contemplation of the law and the right of
ownership is withheld for the meantime. In other words, the certificate of
title of the real property is not turned over to the vendee until and after
certain conditions have been accomplished by either or both the parties.
Then it becomes an executed contract.

It may be:

Sale on installments- commonly adopted for the sale of lots in a land

subdivision or units in a condominium or townhouse project. Its principal
feature is that the purchase price is fixed at a certain amount that shall be
paid in equal monthly or yearly installments for a period of five or ten
years.

Contract to Sell- This is similar to sale on installments except that the

period allowed for the final payment of the purchase price is much shorter
in duration.

Pacto de Retro- The sale in which the vendor is granted the right to
repurchase the property sold on a certain date fixed in the Contract. This is
done by returning to the vendee the entire purchase price including the
expenses for the preparation of the contract and the necessary and useful
expenses on the property sold. This is termed as conventional redemption
under Article 1691 of the New Civil Code.

In a conditional sale, the sale will be deemed fulfilled upon the happening
of the condition which may or may not occur. If the condition do not
happen then the contract of sale will be abated.

In a conditional sale, upon the happening of the suspensive condition, the

title of the seller or ownership to the thing sold will automatically transfer
to the buyer and will bar the seller to transfer it to any other person. In this
case, the first buyer may seek reconveyance of the property since the
second buyer will be deemed a buyer in bad faith and will have a defect in
his title.

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PACTO DE RETRO SALE/ SALE WITH RIGHT TO REPURCHASE

Pacto de Retro sale refers to the sale wherein the seller has the right to
repurchase the subject matter or the property being sold.The essence of a
pacto de retro sale is that the title and ownership of the property sold
transfers immediately to the vendee a retro. However it is still subject to
the resolutory condition of repurchase of the subject property by a vendor
a retro within the period agreed upon by them, or, in the absence thereof,
as provided by law or else it would vests upon the vendee a retro absolute
title and ownership over the property sold by operation of law.

Redemption period for pacto de retro sale

This period applies to conventional redemption and not to those contracts

which involves a sale with a right of repurchase. The period of redemption
laid down by law is expressed in this provision:

Art. 1606. The right referred to in Article 1601, in the absence of an express
agreement, shall last four years from the date of the contract.

Should there be an agreement, the period cannot exceed ten years.

However, the vendor may still exercise the right to repurchase within thirty
days from the time final judgment was rendered in a civil action on the
basis that the contract was a true sale with right to repurchase. (1508a)

*If there is an agreement: period agreed upon cannot exceed 10 years and
in the absence of the period, 4 years from the date of the contract. The
vendor who fails to repurchase the property within the period agreed upon
may, however, exercise the right to repurchase within 30 days from the
time final judgment was rendered in a civil action on the basis that the
contract was a true sale with right of repurchase.

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SALE WITH ASSUMPTION OF MORTGAGE
A mortgage is a debt instrument, secured by the collateral of specified real
estate property, that the borrower is obliged to pay back with a
predetermined set of payments. Mortgages are used by individuals and
businesses to make large real estate purchases without paying the entire
value of the purchase up front. Over a period of many years, the borrower
repays the loan, plus interest, until he/she eventually owns the property
free and clear. Mortgages are also known as “liens against property” or
“claims on property.” If the borrower stops paying the mortgage, the bank
can foreclose.

Despite the seller and the buyer being totally clear as to what’s going on,
their consents alone may sometimes be not enough. If there is a stipulation
in the mortgage contract that says the creditor’s permission is required
before the property is sold and therefore, the mortgage debt transferred to
another person, it has to be respected.

In the cases decided by the Supreme Court, it was held that the consent of
the creditor (or more appropriately, mortgagee) must be given, for an
assumption of mortgage to be valid.
Aside from complying with existing jurisprudence, this will also serve other
practical purposes:
The creditor will know from whom it should collect payments for the debt,
after the sale.
When the debt is all paid off, the creditor will know to whom the Title will
be released.
In some cases, especially with banks, a new Title in the name of the buyer
will have to be processed. So, they have to know about the sale and who
the buyer is.

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RIGHT OF WAY EASEMENT
A right of way easement dates back to common law principles of the right
to the free flow of water, and for allowing neighboring landowners the
ability to travel over another's property. A right of way is a type of
easement that allows a person to pass through another's land. Typically, a
right of way easement is a roadway or pathway for travel through another's
property that benefits a particular person or benefits another parcel of
land. This type of easement allows reasonable use for the passage and right
of travel to the person holding it, or for the land whose benefit the right of
way easement was established. The owner of the land keeps the benefits
and privileges of ownership as specified in the easement. Although
ownership rights of property are lessened by an easement, society at large
benefits from the additional freedom of movement.

An easement is a non-possessory right to use another person's land. The

land burdened by the easement is called the “servient land or estate”; the
land that has the benefit of the easement is the "dominant land or estate".
An easement is classified as an easement in gross (personal to the
individuals) or an easement appurtenant (tied to the land). A title search
would reveal an easement appurtenant but not an easement in gross. An
example of a personal right of way, or easement in gross would be the
following description: “John Jones is permitted to travel across the land for
hunting and fishing purposes only and for his use.” A right of way that’s tied
to the land, or easement appurtenant, consists of recording an easement
over one's land as follows: "the lands currently owned by John Jones
located at 125 Eighth Avenue, San Ramon, California to travel over to
obtain access to this property over the lands of the grantor."

A right of way easement can be described precisely by way of a surveyor's

description, or it can be general. A generally described right of way is called
a floating easement. A floating easement may read: “the right for the
owner of parcel “A” to pass over the land of parcel “B” to get to the stream
for fishing.”

In general, the easement must be in written form. However, if someone

uses part of your property over time without your permission, the person
may claim a prescriptive easement. Legal action would then be necessary to
determine if an easement was created.

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OPTION TO PURCHASE REAL PROPERTY AGREEMENT

CIVIL CODE

Art. 1479. A promise to buy and sell a determinate thing for a price certain
is reciprocally demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a

price certain is binding upon the promissor if the promise is supported by a
consideration distinct from the price. (1451a)

*The second paragraph in this provision is referred to as option. This

unilateral promise to sell or buy a determinate thing does not bind the
promissor though accepted until a consideration distinct from the price
supports this perfected contract.

An option is a contract granting a privilege to buy and sell within an agreed

time and at a determined price. It is a separate and distinct contract which
the parties may enter upon consummation of the option. It must be
supported by a consideration distinct from the price. The question that
arose in this case is whether the parties had entered into a contract of sale
or only an option contract.

An option contract is a contract granting a privilege in one person, for

which he has paid a consideration, which gives him the right to buy certain
merchandise at anytime within the agreed period, at a fixed price. It is
separate and distinct from the main contract itself which the parties may
enter into upon the consummation of the option. An option contract
should have a consideration at all times or else it would be void.

Option is a mere promise or offer to buy or sell real estate. An option to

purchase, for instance is a right of election of a prospective buyer to
purchase which when exercised by him becomes a contract of sale.

Example would be when A promises to sell to B a car which B accepts. S is

not bound to sell his car if there is not promise on the part of B to buy.
However if the promise is supported by a consideration distinct from the
price, as when B paid or promised to pay a sum of money to A for giving
him the right to buy the car whenever he pleases during a certain period of
time, then a perfected option contract is entered in to.

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EXTRAJUDICIAL PARTITION OF REAL ESTATE
An extrajudicial settlement is the settling of an estate via the drafting of a
contract, which indicates how a deceased owner’s properties will be
divided among the heirs as they see fit. The properties left by the deceased
listed in the contract is collectively recognized as the “estate.”
The settlement is considered “extrajudicial,” or “out of court,” as the heirs
do not go to trial to divide the properties left by the deceased property
owner.

The settlement involves drafting a contract, which specifies how a deceased

owner's properties will be divided among individuals considered as heirs.
The properties indicated in the contract are referred to as estate. It is called
extrajudicial or out of court settlement because the heirs no longer go to
trial to divide the properties, which the deceased property owner left.

The requirement for the process:

1. Absolute absence of a will;
2. Proof that the decendent's estate has no existing debts;
3. A legal representative or judicial for heirs who are minors;
4. Affidavit of self adjudication;
5. Deed of extrajudicial settlement of estate and adjudication of estate
6. A bond from a reputable company.

"Summary Settlement of Estate

Section 1. Extrajudicial settlement by agreement between heirs. — If the

decedent left no will and no debts and the heirs are all of age, or the minors
are represented by their judicial or legal representatives duly authorized for
the purpose, the parties may without securing letters of administration,
divide the estate among themselves as they see fit by means of a public
instrument filed in the office of the register of deeds, and should they
disagree, they may do so in an ordinary action of partition. If there is only
one heir, he may adjudicate to himself the entire estate by means of an
affidavit filled in the office of the register of deeds. The parties to an
extrajudicial settlement, whether by public instrument or by stipulation in a
pending action for partition, or the sole heir who adjudicates the entire
estate to himself by means of an affidavit shall file, simultaneously with and
as a condition precedent to the filing of the public instrument, or
stipulation in the action for partition, or of the affidavit in the office of the
register of deeds, a bond with the said register of deeds, in an amount
equivalent to the value of the personal property involved as certified to
under oath by the parties concerned and conditioned upon the payment of
any just claim that may be filed under section 4 of this rule. It shall be
presumed that the decedent left no debts if no creditor files a petition for

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letters of administration within two (2) years after the death of the
decedent.

The fact of the extrajudicial settlement or administration shall be published

in a newspaper of general circulation in the manner provided in the nest
succeeding section; but no extrajudicial settlement shall be binding upon
any person who has not participated therein or had no notice thereof.

Section 2. Summary settlement of estate of small value. — Whenever the

gross value of the estate of a deceased person, whether he died testate or
intestate, does not exceed ten thousand pesos, and that fact is made to
appear to the Court of First Instance having jurisdiction of the estate by the
petition of an interested person and upon hearing, which shall be held not
less than one (1) month nor more than three (3) months from the date of
the last publication of a notice which shall be published once a week for
three (3) consecutive weeks in a newspaper of general circulation in the
province, and after such other notice to interest persons as the court may
direct, the court may proceed summarily, without the appointment of an
executor or administrator, and without delay, to grant, if proper, allowance
of the will, if any there be, to determine who are the persons legally
entitled to participate in the estate, and to apportion and divide it among
them after the payment of such debts of the estate as the court shall then
find to be due; and such persons, in their own right, if they are of lawful age
and legal capacity, or by their guardians or trustees legally appointed and
qualified, if otherwise, shall thereupon be entitled to receive and enter into
the possession of the portions of the estate so awarded to them
respectively. The court shall make such order as may be just respecting the
costs of the proceedings, and all orders and judgments made or rendered in
the course thereof shall be recorded in the office of the clerk, and the order
of partition or award, if it involves real estate, shall be recorded in the
proper register's office.

Section 3. Bond to be filed by distributees. — The court, before allowing a

partition in accordance with the provisions of the preceding section, my
require the distributees, if property other than real is to be distributed, to
file a bond in an amount to be fixed by court, conditioned for the payment
of any just claim which may be filed under the next succeeding section.

Section 4. Liability of distributees and estate. — If it shall appear at any

time within two (2) years after the settlement and distribution of an estate
in accordance with the provisions of either of the first two sections of this
rule, that an heir or other person has been unduly deprived of his lawful
participation in the estate, such heir or such other person may compel the
settlement of the estate in the courts in the manner hereinafter provided
for the purpose of satisfying such lawful participation. And if within the

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same time of two (2) years, it shall appear that there are debts outstanding
against the estate which have not been paid, or that an heir or other
person has been unduly deprived of his lawful participation payable in
money, the court having jurisdiction of the estate may, by order for that
purpose, after hearing, settle the amount of such debts or lawful
participation and order how much and in what manner each distributee
shall contribute in the payment thereof, and may issue execution, if
circumstances require, against the bond provided in the preceding section
or against the real estate belonging to the deceased, or both. Such bond
and such real estate shall remain charged with a liability to creditors, heirs,
or other persons for the full period of two (2) years after such distribution,
notwithstanding any transfers of real estate that may have been made.

Section 5. Period for claim of minor or incapacitated person. — If on the

date of the expiration of the period of two (2) years prescribed in the
preceding section the person authorized to file a claim is a minor or
mentally incapacitated, or is in prison or outside the Philippines, he may
present his claim within one (1) year after such disability is removed."

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CONTRACT TO SELL

A Contract to Sell is an agreement between a buyer and a seller whereby

the seller promises to sell something to the buyer and the buyer promises
to buy it. But generally, in this kind of contract, the ownership of the
subject “thing” is not transferred to the buyer upon the signing of the
contract. There are usually conditions to be complied with by one or both
of the parties. And the transfer of ownership will only happen when those
conditions are met.

In real estate transactions, it is quite common for developers or individual

sellers to enter into a Contract to Sell with a buyer. In cases like this, the
agreement contained in the contract basically goes like this:

The seller/developer promises to build the house or condominium building.

The seller/developer promises to sell the house or the subject

condominium unit to the buyer.

The buyer promises to buy the house or condominium unit. This can be in
installments or in full cash, or in any other arrangement.

The ownership of the subject property will only be transferred to the buyer
when the house or condominium unit is completely built AND when the
buyer has fully paid its price.

In the above scenario, the conditions are the completion of the building by
the developer and the full payment by the buyer.

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