Nature of Sales

Fule v. CA
286 SCRA 698(1998)

Facts:

Gregorio Fule, a banker and jeweller, acquired a 10 hectare of property in Rizal which used to be
under the name of Fr. Jacobe on which (Jacobe) mortgaged the land to the Bank of Alaminos to
secure a loan of P10,000. The mortgage was foreclosed and the property later offered for public
auction.

1984, Gregorio asked Remilia and Oliva to look for a buyer (property), the found Dr. Cruz, just
so happens that Gregorio wants the 2.5 carat emerald cut earings of Dr. Ninevetch Cruz (MD),
Gregorio offered to buy the jewelry for P100,000, was refused, he then offered $6000 in the
exchange rate of $1 is to P25, was still refused. They agreed, however, on the land of Fule for the
jewelry.

Dr. Cruz asked her counsel, Atty. Belarmino to check the land for any impediments. There was.
Gregorio then executed to a Deed of Redemption to cut through the legal impediment. Land is
now okay.

Dr. Cruz went to the bank with Gregorio to show the jewelry and said (non-verbatim “Oy bobo
check this shit out, tapat mo sa ilaw to see if it’s fake or not. ICE ba?”. Gregorio checked it and
was happy. Gregorio and the counsel executed a Deed of Absolute Sale. The Property was for
P200,000 and the Jewelry for P160,000, both agreed that Dr. Cruz will pay the remaining
P40,000 by cash.

· Gregorio happy with his jewelry, went straight to a appraiser named Dimayuga but anyway,
Dimayuga said that the jewel is fake.
· Gregorio then filed a complaint before the RTC, praying for the Contract of Sale is deemed null
and void.

· RTC ruled in favor of Cruz stating that Gerggy boy was in bad faith. CA affirmed.

Issue:

W/ON CA erred in upholding the validity of the Contract of Sale

Held:

No. The NCC provides that the Contract of Sale is consensual, and is perfected when the minds
met. Contract may be rendered void if (1) Party has no capacity to give consent, and (2) if
consent was gained because of VIMFU (Violence, Intimidation, Mistake, Fraud, and Undue
Influence). Dr. Cruz was not fraudulent. SC said that Greggy Boy was also a jeweler, he was
given time to inspect the jewel before perfecting the contract.

Cantemprate v. CRS Realty Dev. Corp.

587 SCRA 492 (2009)

San Miguel Properties Philippines, Inc. v. Huang,

336 SCRA 737 (2000)

Facts:
 San Miguel Properties is engaged in the purchase and sale of real properties, of which include
two parcels of land. These properties were offered for sale at P52,140,000.00. Such offer was
made to Atty. Dauz on behalf of Sps. Huang. Atty. Dauz wrote San Miguel informing
the respondents’ interest to buy the property and enclosed therein a check (P1,000,000.00) as
earnest deposit subject to certain conditions, to wit: (1) that they be given the exclusive option to
purchase the property within 30 days from acceptance of the offer; (2) that during the option
period, the parties would negotiate the terms and conditions of the purchase; and (3) petitioner
would secure the necessary approvals while respondents would handle the documentation.
Sobrecarey, San Miguel Properties VP indicated his conformity to the offer; signed the letter;
and accepted the earnest deposit. By agreement of the parties, they agreed that respondents will
be given 6 months within which to pay. Upon failure of respondents to pay despite the extension
of time given, petitioner through its Pres & CEO Gonzales, wrote Atty. Dauz, that they are
returning the earnest deposit. Respondent spouses through counsel, wrote petitioner demanding
the execution of a deed of conveyance in their favour. They attempted to return the earnest
deposit but were refused by San Miguel. Respondent spouses filed a complaint for septic
performance. Trial court, upon motion, dismissed the complaint, which was reversed by the CA.

Arguments:

San Miguel: the Court of Appeals erred in finding that there was a perfected contract of
sale between the parties because the letter of respondents, which petitioner accepted, merely
resulted in an option contract, albeit it was unenforceable for lack of a distinct consideration.
Petitioner argues that the absence of agreement as to the mode of payment was fatal to the
perfection of the contract of sale. Petitioner also disputes the appellate courts ruling that Isidro A.
Sobrecarey had authority to sell the subject real properties.

Sps. Huang: As held by CA, there is a perfected contract of sale since the earnest money was
allegedly given by respondents and accepted by petitioner through its vice-president
and operations manager, Sobrecarey. The Court holds that respondents did not give the P1
million as "earnest money" as provided by Art. 1482 of the Civil Code. They presented the
amount merely as a deposit of what would eventually become the earnest money or down
payment should a contract of sale be made by them. The amount was thus given not as a part of
the purchase price and as proof of the perfection of the contract of sale but only as a guarantee
that respondents would not back out of the sale. Respondents in fact described the amount as an
"earnest-deposit.

Issue:

WON the earnest deposit could have been given as earnest money contemplated in Art. 1482,
and thus there was a perfected contract of sale.

Held:

No, hence, there was no perfected contract of sale. In the present case, the P1 million "earnest-
deposit" could not have been given as earnest money as contemplated in Art. 1482 because,
at the time when petitioner accepted the terms of respondents’ offer, their contract had not yet
been perfected. The first condition for an option period of 30 days sufficiently shows that a sale
was never perfected. Such option giving respondents the exclusive right to buy the properties
within the period agreed upon is separate and distinct from the contract of sale which the
parties may enter.
Cortes v. CA, 494 SCRA 570 (2006)
Facts:
This is a petition for review on certiorari seeking to annul and set aside the decision of CA.

February 2003, Cortez filed with RTC an application for judicial confirmation over a parcel of
land in Manila. He submitted tax declarations from 1966 to 2005, survey plan of the property
with the annotation that it is alienable and disposable and other documents.

Cortez alleged that the tax declarations were under the name of his mother from which he
inherited the land. A testimony was also submitted saying that the family of Cortez have in fact
occupied the land for over 60 years. RTC granted Cortez the application for registration of the
title.

After its finality, RP, represented by Solicitor General appealed to the CA alleging that RTC
erred in granting the application for registration. Pointing out that there was no evidence the
Cortez were in possession of the subject land in open, adverse and continuous possession of the
property for more than 30 years. CA dismissed the appeal and affirmed the decision of the RTC.

Issue: Whether CA erred in affirming the RTC?

Held:
Petition is meritorious.

Applicants for original registration of title to land must establish compliance with the provisions
of Section 14 of
P.D. No. 1529, which pertinently provides that: Sec. 14. Who may apply. The following persons
may file in the proper Court of First Instance an application for registration of title to land,
whether personally or through their duly authorized representatives:
(1) Those who by themselves or through their predecessors-in interest have been in open,
continuous, exclusive and notorious possession and occupation of alienable and disposable lands
of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.
(2) Those who have acquired ownership of private lands by prescription under the provision of
existing laws.
xxxx

After a careful scrutiny of the records of this case, the Court finds that Cortez failed to comply
with the legal requirements for the registration of the subject property under Section 14(1) and
(2) of P.D. No. 1529.
The 1st requirement was not satisfied, the survey plan does not constitute incontrovertible
evidence to overcome the presumption that the subject property remains part of the alienable
public domain. To prove that the land subject of an application for registration is alienable, an
applicant must establish the existence of a positive act of the government such as a presidential
proclamation or an executive order, an administrative action, investigation reports of Bureau of
Lands investigators, and a legislative act or statute. The applicant may also secure a certification
from the Government that the lands applied for are alienable and disposable.

The Court nevertheless emphasized that there must be an official declaration by the State that the
public dominion property is no longer intended for public use, public service, or for the
development of national wealth before it can be acquired by prescription; that a mere declaration
by government officials that a land of the public domain is already alienable and disposable
would not suffice for purposes of registration under Section 14(2) of P.D. No. 1529. The Court
further stressed that the period of acquisitive prescription would only begin to run from the time
that the State officially declares that the public dominion property is no longer intended for
public use, public service, or for the development of national wealth.

Note: properties classified as alienable and disposable land may be converted into private
property by reason of open, continuous and exclusive possession of at least 30 years. Such
property now falls within the contemplation of "private lands" under Section 14(2) of PD 1529,
over which title by prescription can be acquired. Thus, under the second paragraph of Section 14
of PD 1529, those who are in possession of alienable and disposable land, and whose possession
has been characterized as open, continuous and exclusive for 30 years or more, may have the
right to register their title to such land despite the fact that their possession of the land
commenced only after 12 June 1945.

Congregation of the Religious of the Virgin Mary v. Orola,

553 SCRA 578 (2008)

Facts:

Petitioner RVM and respondent Orola met to discuss the sale of the latter’s property adjacent to
St. Mary’s Academy.

Respondent Orola went to manila to see the Mother Superior General of the RVM regarding
the sale of the property.

A contract to sell was finalized. It included the names of herein petitioner and respondents.

The property was to be sold to RVM in consideration of Php5,555,000.00 with 10% of the
total consideration payable upon the execution of the contract which was already signed by all
the respondents and Sr. Enhenco as witness.

The said 10% down payment was acknowledged by Orola amounting to Php 555,500.00
 Respondents then went to finalize the deal by collecting the remaining balance of Php
4,999,500.00 from petitioners herein but petitioners did not meet with respondents.

RVM then denied respondents’ demand for payment because it was signed by a mere witness
(Sr. Enhenco) that the property was payable in 2 years.

Respondents filed with the RTC a complaint with alternati3ecauses of action of specific
performance or rescission.

RTC granted respondents prayer for rescission

CA set aside the said rescission but granted respondents’ prayer for specific performance.

Issue:

WON it should be an action for rescission or specific performance

Held:

Specific performance

The CA was correct in setting aside the prayer for rescission

The CA after failing to ascertain the parties’ actual intention on the terms of payment for the sale'
proceeded to apply Articles 1383 and 1384 of the Civil Code declaring that rescission as a
subsidiary remedy that may be availed of only when the injured party has no other legal means to
obtain reparation of the damage caused.

Considering the absence of fraud and bad faith, the CA felt that the
most equitable resolution is to grant respondents’prayer of specific performance of the sale and
ordered RVM to pay the remaining balance of the purchase price plus interest

The CA mistakenly applied Articles 1383 and 1384

It is evident from the allegations in the respondents’ Complaint that the instant case does not fall
within the enumerated instances in Article 1381. Certainly, the Complainant did not pray for
the rescission of the contract based on economic prejudice

Almocera v. Ong, 546 SCRA 164 (2008)

Gaite v. Fonacier, 2 SCRA 830 (1961)

FACTS:
1. FONACIER: OWNER OF DAWAHAN GROUP (11 iron lode mineral claims)
1. Appointed GAITE (attorney-in-fact) to enter to contract with any individual/juridical person for development
of mining claims in a royalty basis of not less than P.50/ton.
2. GAITE: executed general assignment conveying development and exploitation of mining claims into LARAP
IRON MINES (single proprietorship owned by him)
1. Paved roads, development and facilities
2. Extracted 24,000 metric tons of iron ore
3. FONACIER: revoked GAITE authority
1. Revocation of Power of Attorney and Contract
2. GAITE assented subject to certain conditions:
i. Consideration of P20,000.00, plus 10% of the royalties that Fonacier would receive from the mining claims
ii. All his rights and interests on all the roads, improvements, and facilities in or outside said claims,
 iii. Right to use the business name "Larap Iron Mines" and its goodwill, and all the records and documents relative to
the mines.
iv. Gaite transferred to Fonacier all his rights and interests over the "24,000 tons of iron ore, more or less" that the
former had already extracted from the mineral claims
1. In consideration of the sum of P75,000.00, P10,000.00 of which was paid upon the signing of the agreement
2. P65,000 will be paid from and out of the first letter of credit covering the first shipment of iron ores and of the
first amount derived from the local sale of iron ore made by the Larap Mines & Smelting Co. Inc.
3. To secure P65,000, Fonacier promised to execute in favor of Gaite a surety bond with himself (Fonacier) as
principal and the Larap Mines and Smelting Co. and its stockholders George Krakower, Segundina Vivas,
Pacifico Escandor, Francisco Dante, and Fernando Ty as sureties (Exhibit "A-1").
i. GAITE REFUSED TO SIGN REVOCATION unless another bond under written by a bonding company was put
up by defendants to secure the payment of the P65,000 balance.
1. Hence, a second bond with Far Eastern Surety and Insurance Co. as additional surety
a. Provided liability of the surety company would attach only when there had been an actual sale of iron ore by the
Larap Mines & Smelting Co. for an amount of not less then P65,000.00
b. Liability of said surety company would automatically expire on December 8, 1955.
c. Both bonds were attached to the "Revocation of Power of Attorney and Contract", Exhibit "A", and made
integral parts thereof.
4. On same day Fonacier revoked the power of attorney and entered into a "Contract of Mining Operation",
ceding, transferring, and conveying unto the Larap Mines and Smelting Co., Inc. the right to develop, exploit,
and explore the mining claims, together with "Larap Iron Mines"
i. Also transferred 24,000 tons of iron ore from Gaite, to the Larap & Smelting Co
4. 2nd BOND EXPIRED, no sale of the approximately 24,000 tons of iron ore had been made by the Larap Mines
& Smelting Co., Inc., nor had the P65,000.00 balance of the price of said ore been paid to Gaite by Fonacier.
1. GAITE filed the present complaint.
2. DEFENSE: obligation sued upon by Gaite was subject to condition that P65,000 would be payable out of the
first letter of credit covering the first shipment of iron ore and/or the first amount derived from the local sale of
the iron ore by the Larap Mines & Smelting Co., Inc.;
i. No sale of the iron ore had been made
1. Hence the condition had not yet been fulfilled
2. Obligation was not yet due and demandable.
ii. FONACIER: only 7,573 of 24,000 tons of iron ore sold to him by Gaite was actually delivered

5. ISSUES WITH LOWER COURT:

1. WON obligation of P65,000 is due and demandable.
i. LOWER COURT HELD obligation was held WITH TERM: It would be paid upon sale of sufficient iron ore by
defendants within one year, obligation became due and demandable under Article 1198 of the New Civil Code.
2. WON 24,000 metric tons is existing.
3. LOWER COURT SIDED WITH GAITE.

ISSUES:
WON lower court erred in holding that the obligation of appellant Fonacier to pay appellee Gaite the
P65,000.00 IS ONE WITH PERIOD/TERM OR A SUSPENSIVE CONDITION (term expired on December
8, 1955)
WON lower court erred in not holding that there were only 10,954.5 tons in the stockpiles of iron ore sold by
appellee Gaite to appellant Fonacier.

HELD:
NO ERROR in the decision appealed from, we hereby affirm the same, with costs against appellants.

1. WON lower court erred in holding that the obligation of appellant Fonacier to pay appellee Gaite the
P65,000.00 IS ONE WITH PERIOD/TERM OR A SUSPENSIVE CONDITION (term expired on December
8, 1955)—LOWER COURT CORRECT THAT LOCAL SALE OF IRON IS NOT A SUSPENSIVE
CONDITION TO PAYMENT OF P65,000 BUT ONLY A SUSPENSIVE PERIOD OR TERM.
1. CONDITIONAL OBLIGATION: obligatory force (as distinguished from its demandability) is subordinated to
the happening of a future and uncertain event
i. If the suspensive condition does not take place, the parties would stand as if the conditional obligation had never
existed.
ii. NO UNCERTAINTY THAT PAYMENT WILL BE MADE, ONLY THING UNCERTAIN IS THE EXACT
DATE.
1. THEREFORE existence of the obligation to pay is recognized; only its maturity or demandabilityis deferred.
2. CONTRACT OF SALE: commutative and onerous: not only does each one of the parties assume a correlative
obligation (the seller to deliver and transfer ownership of the thing sold and the buyer to pay the price)
i. But each party anticipates performance by the other from the very start.
 ii. While in a sale the obligation of one party can be lawfully subordinated to an uncertain event, so that the other
understands that he assumes the risk of receiving nothing for what he gives (as in the case of a sale of hopes or
expectations, emptio spei)
iii. Not in the usual course of business to do so; h
1. ence, the contingent character of the obligation must clearly appear.
iv. Nothing is found in t evidence that Gaite desired or assumed to run the risk of losing his right over the ore without
getting paid for it, or that Fonacier understood that Gaite assumed any such risk.
3. To subordinate the obligation to pay tremaining P65,000.00 TO SALE OR SHIPMENT OF ORE AS A
CONDITION PRECENDENT = Leaving the payment at the discretion of the debtor, for the sale or shipment
could not be made unless the appellants took steps to sell the ore.
4. ONLY RATIONAL VIEW IS SALE OR ORE TO FONACIER WAS A SALE ON CREDIT AND NOT an
aleatory (random) contract where the transferor, Gaite, would assume the risk of not being paid at all

2. WON Fonacier and his sureties, still have the right to insist that Gaite should wait for the sale or shipment of
the ore before receiving payment; ARE THEY ENTITLED TO MAKE FULL ADVANTAGE OF PERIOD
GRANTED FOR MAKING PAYMENT?—FORFEITED RIGHT COURT THE RIGHT TO COMPEL
GAITE TO WAIT FOR THE SALE BEFORE RECEIVING PAYMENT, BECAUSE THEY WERE NOT
ABLE TO RENEW BOND WITH FAR EASTERN SURETY COMPANY
1. ART. 1198:
i. When he does not furnish to the creditor the guaranties or securities which he has promised.
ii. When by his own acts he has impaired said guaranties or securities after their establishment
iii. AND When through fortuitous event they disappear, unless he immediately gives new ones equally satisfactory.
3. WON there were really 24,000 tons of iron ore in the stockpiles sold by appellee Gaite to appellant Fonacier
and whether, if there had been a short-delivery as claimed by appellants, they are entitled to the payment of
damages.
1. This is case of a sale of a specific mass of fungible goods for a single price or a lump sum, the quantity of
"24,000 tons of iron ore, more or less," stated in the contract being a mere estimate by the parties of the total
tonnage weight of the mass
2. Evidence shows that neither of the parties had actually measured of weighed the mass, so that they both tried
to arrive at the total quantity by making an estimate of the volume thereof in cubic meters and then multiplying
it by the estimated weight per ton of each cubic meter.
3. Subject matter of the sale is, therefore, a determinate object, the mass, and not the actual number of units or
tons contained therein, so that all that was required of the seller Gaite was to deliver in good faith to his buyer
all of the ore found in the mass,
i. Gaite had, therefore, complied with his promise to deliver, and appellants in turn are bound to pay the lump price.
4. In the face of the conflict of evidence, we take as the most reliable estimate of the tonnage factor of iron ore in
this case to be that made by Leopoldo F. Abad, chief of the Mines and Metallurgical Division of the Bureau of
Mines
1. This witness placed the tonnage factor of every cubic meter of iron ore at between 3 metric tons as minimum
to 5 metric tons as maximum. This estimate, in turn, closely corresponds to the average tonnage factor of 3.3
adopted in his corrected report (Exhibits "FF" and FF-1") by engineer Nemesio Gamatero, who was sent by the
Bureau of Mines to the mining claims involved at the request of appellant Krakower, precisely to make an
official estimate of the amount of iron ore in Gaite's stockpiles after the dispute arose.

Buenaventura v. CA, 416 SCRA 263 (2003)