Sales Batch 10

8/18/2019 Sales Batch 10

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2/18

1925

FACTS'• 5he plaintiffs had purchased a land of the Pasay 9state by installments:

• 5he defendant was the owner of two parcels of land situated in ;asbate:

• 5he plaintiffs and defendant agreed to exchange their respectie properties, but before the final

execution of the contract of exchange, the plaintiff ean made false and fraudulent rpresentations.- NO

HELD:

• 9 SS9'• As to the cross-complaint and counterclaim of the defendant, we find that in the deed 9xhibit !

executed by the plaintiffs in faor of the defendant, the former agreed to reimburse the latter whathe might pay in connection with perfecting his title to the property in Pasay, exchanged for that ofthe defendant in ;asbate, proided that the sum thus spent should exceed P!,@##:

• 5his was admitted by the plaintiffs in their reply to the cross-complaint and counterclaim of thedefendant, where they also admitted the fact that for perfecting his title to the property, thedefendant had spent the total sum of P!,2!%B there being, therefore, an excess of P%!% which theplaintiffs are under obligation to pay unto the defendant:


3/18

PHIL. MANUFACTURING CO. V. GO JOCO1926

F!"#:

• )ct "@, !2"",


4/18


5/18

P()%* C(++%*!,& ' I'$#"*,& v. CA1997

FACTS:

• Power 0ommercial K ndustrial >et 0orp 7P08, a manufacturer of asbestos, bought a 3!"- sqmparcel of land in ;akati from Spouses Ouiambao:

•

Can $!, !2.2' they executed the contract of sale, wherein the parties agreed that P0 would payOuiambao P!#?M as down payment, and the balance of P"2@M would be paid upon theexecution of the deed of transfer of the title oer the propertyB and that P0 would assume theexisting mortgage of the land amounting to P.2,!%@:..:

• Cune !, !2.2' Ouiambao mortgaged the land to P*N again to guarantee a P!%@M loan, whichP0 agreed to assume the payment thereof: Cune "3, !2.2' P0 and Ouiambao executed a >eedof Absolute Sale with Assumption of ;ortgage, wherein the property was sold, transferred, andconeyed to P0B with the condition that P0 assumes to pay in full the entire amount of P!%@M toP*N:

• Foweer, on eb !@, !2?#, P*N informed Ouiambaos that since P0 failed to submit theapplication papers for the assumption of mortgage, such application was considered withdrawnand the outstanding balance was deemed due and demandable, to be paid within !@ days:

• P0 then made payments of the loan to P*N on Cune 7P%!,??#:%@8 and >ecember 7P"#,"?$:!%8,

with a letter attached requesting that the mortgage and title be transferred in P0’s name so thatthey may be able to take physical possession and clear the people occupying the property:

• P*N replied, saying that the accounts were oerdue, and that would hae to be made in order toplace the account in current form:

• P0 filed rescission case against Sps: Ouiambao before 150-Pasig, and then also amended thecomplaint to implead P*N after the bank refused to return the payments of the loan 7since theassumption of mortgage was neer approed8 and foreclosed the mortgage on the property:

• RTC *$&%' , v(* ( PCI, saying that the failure of the Ouiambaos to delier actual possessionto P0 entitled the latter to rescind the sale, and in iew of such failure and of the denial of theassumption of mortgage, P*N was obliged to return the payments made by P0:

• CA *%v%*#%' "/% "*,& !($*"0 saying that there was no substantial breach to /ustify rescission ofthe contract or the return of the payments, because the deed of sale did not obligate the former toe/ect the lessees from the land in question as a condition of the sale, nor was the occupation

thereof by said lessees a iolation of the warranty against eiction:• SC ,*+%' "/,# CA '%!,#,(.

ISSUES HELD RATIO:

!: (o* there was a substantial breach of an implied warranty NO

• 5here was no condition for the Ouiambaos to e/ect the lessees from the lot and delier actual andphysical possession to P0:

• 5he deed of sale only makes reference to the agreement of Ouiambao to defend P0’s title andpeaceful possession against any claims of any and all third persons:

• n fact, the general manager of P0 asked for the omission of the guarantee of the e/ectment ofthe occupants because of the presence of such agreement:

• f the parties intended to impose on respondent spouses the obligation to e/ect the tenants fromthe lot sold, it should hae included in the contract a proision to that effect:

• Absent such stipulation, there was no intention to make nonfulfillment as a ground for rescission:n addition, P0 was aware of the presence of the tenants at the time it entered into the salestransaction, and P0’s counsel een undertook the /ob of e/ecting the occupants:

• Also, there was an effectie symbolic deliery, as the transfer of ownership and control waseffected through the execution of the deed of sale, a public document: 0ontrol was manifestedwhen P0 filed the e/ectment suit, as it signified that P0, as the new owner, intended to obtain for itself and to terminate said occupants’ actual possession thereof: Prior physical deliery or


6/18

possession is not legally required and the execution of the deed of sale is deemed equialent todeliery:

• A breach of this warranty requires the concurrence of the following circumstances'!: 5he purchaser has been depried of the whole or part of the thing soldB": 5his eiction is by a final /udgmentB$: 5he basis thereof is by irtue of a right prior to the sale made by the endorB and

%: 5he endor has been summoned and made co-defendant in the suit for eiction at the instance of the endee:

• Absent any proof that these requisites hae been satisfied, no breach of warranty against eictioncan be appreciated:

• 5he presence of lessees does not constitute a depriation of the control oer the property: 5hedepriation occurred upon the foreclosure of the mortgage, but that was due to P0’s fault in notpaying the loan:

": (o* there was a mistake in payment by P0 to P*N NO• Solutio indebiti only applies where'!: A payment is made when there exists no binding relation between the payor,who has no duty to

pay, and the person who receied the payment, and": 5he payment is made through mistake, and not through liberality or some other cause:

• 0ondition ! does not exist because P0 and Ouiambao agreed to abide by the requirements ofP*N in connection with the real estate mortgage:

• 5herefore, it cannot be said that it did not hae a duty to pay P*N the amortiGation on themortgage:

• Also, P0 insists that its payment of the amortiGation was a mistake because P*N disapproed itsassumption of mortgage:

• Nut een if P0 was a third party in regard to the mortgage of the land purchased, the payment ofthe loan by P0 was a condition clearly imposed by the contract of sale:

• 5his fact alone disproes that there was a QmistakeR in payment:

• )n the contrary, such payments were necessary to protect P0’s interest as a Qthe buyer7s8 andnew owner7s8 of the lot:R


7/18

ENGINEERING MACHINER3 CORPORATION v#. CA ' PONCIANO L. ALMEDA1996

F!"#:

• Sept: !#, !23" - 9ngineering K ;achinery 0orp 79;08 undertook to fabricate, furnish, and install theair-conditioning 7AD08 system in Almeda6s building for P"!#k: 5he system was completed in !23$ andaccepted by Almeda who paid the contract price in full:

• Sept: ", !23@ - Almeda sold the building to the *ational nestment and >eelopment 0orp 7*>08, butthe sale was eentually /udicially rescinded because of *>06s breach:

• Almeda reacquired possession in !2.!: Fe learned from *>0 employees of the defects of the AD0system of the building: Fe commissioned 9ngr: Sapico to render a technical ealuation: 5he reportconcluded the system was not capable of maintaining the desired temp: Almeda sued for damages:

• 9;0 moed to dismiss, alleging the prescriptie period of 3 months had lapsed pursuant to 00!@33-3., in relation to 00!@.! 7responsibility of endor for hidden faultsDdefects8:

• Almeda' it was a contract for a piece of work, so the period is !# years 700!.!%8:o 9;0' 00!@.!proiding for a 3-month prescriptie period is applicable to a contract for a piece of work by irtue of00!.!%, which proides that such a contract shall be goerned by the pertinent proisions on warrantyof title and against hidden defects and the payment of price in a contract of sale:

• 79;06s motion8 50 denied the motion to dismiss: 9;0 reiterated its claim of prescription as anaffirmatie defense in its answer to Almeda6s complaint:

• 7Almeda6s complaint8 50 ruled that the complaint was filed within the !#-year period although thecontract was for a piece of work: 9;0 committed breach in deiating from the plans, thus reducing theoperational effectieness of the system: 0A affirmed:

I##$% 1: 4N A&+%'# !(+&," )# **%' 8 *%#!*,",( ⇒ NO. H%&' 1:

• 0learly, the contract is one for a piece of work: 9;06s business and particular field of expertise is thefabrication and installation of such systems as ordered by customers: 5he obligations of a contractorfor a piece of work are in 00!.!%-!@:

• 5he proisions on warranty against hidden defects mentioned in 00!.!% are in 00!@3! and !@33:5he remedy against iolations of the warranty against hidden defects is either to withdraw from thecontract 7redhibitory action8 or to demand a proportionate reduction of the price 7accion quanti

minoris8, with damages in either case:• Villostas v. CA' (hile 00!@.! proides for a prescriptie period of 3 months for a redhibitory action, a

cursory reading of the !# preceding articles to which it refers will reeal that said rule may be appliedonly in case of implied warrantiesB and where there is an express warranty in the contract, theprescriptie period is !8 the one specified in the express warranty, and "8 in the absence of suchperiod, the general rule on rescission, 7% years - 00!$?28, shall apply:

• Nased on the aboe, it would seem that the period had lapsed: Foweer, a close scrutiny of thecomplaint filed in the trial court reeals that the original action is not really for enforcement of thewarranties against hidden defects, but one for breach of contract: 5he applicable proision is 00!.!@:Since the proision does not proide for a prescriptie period, the general law on prescription700!!%%8 applies: An action upon a written contract prescribes in !# years: Since the goerningcontract was executed on September !#, !23" and the complaint was filed on ;ay ?, !2.!, it is clearthat the action has not prescribed:

I##$% 2: 4N !!%"!% ( "/% )(* *%&,%v%# "/% !("*!"(* ( &,,&,"8 (* 8 '%%!" ⇒ NO.• Acceptance the work does not, ipso facto, reliee the petitioner from liability for deiations from and

iolations of the written contract, as the law gies him !# years within which to file an action based onbreach thereof: 0A found that the defect in the installation was not apparent at the time of the delieryand acceptance of the work, considering that Almeda is not an expert to recogniGe the same: rom theery nature of things, it is impossible to determine by the simple inspection of AD0 system installed inan ?-floor building whether it has been furnished and installed as per agreed specifications:

Feld' Petition deniedB 0A decision affirmed:NUTRIMI FEEDS CORPORATION v. CA ' SPOUSES EVANGELISTA


8/18

2;;< Hidden Encumbrances or Defects

F!"#:

• )n April @, !22$, the Spouses 9fren and ;aura 9angelista started to directly procure ariouskinds of animal feeds from *utrimix eeds 0orporation 7*08:

• *0 gae the spouses a credit period of thirty to forty-fie days to postdate checks to be issued

in payment for the deliery of the feeds:• 5he accommodation was made apparently because of the company president’s close friendship

with 9ugenio 9angelista, the brother of respondent 9fren 9angelista:• 5he arious animal feeds were paid and coered by checks with due dates from Culy !22$ to

September !22$: nitially, the respondents were good paying customers: n some instances,howeer, they failed to issue checks despite the delieries of animal feeds which wereappropriately coered by sales inoices:

• 0onsequently, the respondents incurred an aggregate unsettled account with the petitioner in theamount of P.33,!@!:##:

• (hen the aboe-mentioned checks were deposited at the *0’s depository bank, the samewere, consequently, dishonored because respondent ;aura 9angelista had already closed heraccount: *0 made seeral demands for the spouses to settle their unpaid obligation, but thelatter failed and refused to pay their remaining balance with the petitioner:

• *0 filed a complaint for sum of money and damages with a prayer for issuance of writ ofpreliminary attachment: 5he spouses contended that the sudden and massie death of theiranimals was caused by the contaminated products of the petitioner, the nonpayment of theirobligation was based on a /ust and legal ground: 5he spouses filed a complaint for damages forthe untimely and unforeseen death of their animals supposedly effected by the adulterated animalfeeds the petitioner sold to them:

• Culy "3, !22$, three arious kinds of animal feeds, numbering !$# bags, were deliered to theresidence of the respondents in Sta: 1osa, ;arilao, Nulacan:

• 5he delieries came at about !#'## a:m: and were fed to the animals at approximately !'$# p:m:at the respondents’ farm in Nalasing, Sta: ;aria, Nulacan: At about ?'$# p:m:, respondent ;aura9angelista receied a radio message from a worker in her farm, warning her that the chickenswere dying at rapid interals: (hen the respondents arried at their farm, they witnessed thedeath of !?,### broilers, aeraging !:. kilos in weight, approximately forty-one to forty-fie days

old: 9fren 9angelista suffered from a heart attack and was hospitaliGed as a consequence of themassie death of their animals in the farm:

• Samples of the feeds were sent for testing and yielded positie results to the tests for0);A5951AHH 0ompound, the actie component of 1A0;*, a brand name for acommercially known rat poison:

• 50' in faor of *0 - the 0ourt cannot sustain the 9angelistas’ contention that *utrimix is liableunder Articles !@3! and !@33 of the 0iil 0ode goerning Qhidden defectsR of commodities sold:

As already explained, the 0ourt is predisposed to beliee that the sub/ect feeds werecontaminated sometime between their storage at the bodega of the 9angelistas and theirconsumption by the poultry and hogs fed therewith, and that the contamination was perpetratedby unidentified or unidentifiable ill-meaning mischief-maker7s8 oer whom *utrimix had no controlin whicheer way:

• All told, the 0ourt finds and so holds that for inadequacy of proof to the contrary, *utrimix was not

responsible at all for the contamination or poisoning of the feeds supplied by it to the 9angelistaswhich precipitated the mass death of the latter’s chickens and hogs: Ny no means and under nocircumstance, therefore, may *utrimix be held liable for the sundry damages prayed for by the9angelistas in their complaint :

• 0A' reersed and dismissed - ruled that the respondents were not obligated to pay theiroutstanding obligation to the petitioner in iew of its breach of warranty against hidden defects:5he 0A gae much credence to the testimony of >r: 1odrigo >iaG, who attested that the samplefeeds distributed to the arious goernmental agencies for laboratory examination were takenfrom a sealed sack bearing the brand name *utrimix: 5he 0A further argued that the declarations


9/18

of >r: >iaG were not effectiely impugned during cross-examination, nor was there any contraryeidence adduced to destroy his damning allegations:

• S0' reersed 0A and reinstated 50 ruling

• 5he proisions on warranty against hidden defects are found in Articles !@3! and !@33 of the*ew 0iil 0ode of the Philippines:

• A hidden defect is one which is unknown or could not hae been known to the endee: nder the

law, the requisites to recoer on account of hidden defects are as follows'o 7a8 the defect must be hiddenBo 7b8 the '%%!" +$#" %=,#" " "/% ",+% "/% #&% )# +'%>o 7c8 the defect must ordinarily hae been excluded from the contractBo 7d8 the defect, must be important 7renders thing *5 or considerably decreases

5*9SS8Bo 7e8 the action must be instituted within the statute of limitations:

• 5o be able to proe liability on the basis of breach of implied warranty, three things must beestablished by the respondents'5he first is that they sustained in/ury because of the productBthesecond is that the in/ury occurred because the product was defectie or unreasonably unsafeBand finally , the '%%!" %=,#"%' )/% "/% *('$!" &%" "/% /'# ( "/% %",",(%*.

• A manufacturer or seller of a product cannot be held liable for any damage allegedly caused bythe product in the absence of any proof that the product in question was defectie:

• 5he defect must be present upon the deliery or manufacture of the productB or when the productleft the seller’s or manufacturer’s controlB or when the product was sold to the purchaserB or theproduct must hae reached the user or consumer without substantial change in the condition itwas sold:

• 5racing the defect to the petitioner requires some eidence that there was no tampering with, orchanging of the animal feeds:

• 5he nature of the animal feeds makes it necessarily difficult for the respondents to proe that thedefect was existing when the product left the premises of the petitioner:

T *0 deliered the animal feeds, allegedly containing rat poison, on Culy "3, !22$B but it isastonishing that the respondents had the animal feeds examined only on )ctober "#, !22$, or barelythree months after their broilers and hogs had died:

T >uring the meeting with *utrimix President ;r: Nartolome, the respondents claimed that theiranimals were plagued by disease, and that they needed more time to settle their obligations with thepetitioner: t was only after a few months that the respondents changed their /ustification for not payingtheir unsettled accounts, claiming anew that their animals were poisoned Spoused failed to proe that the*0 is guilty of breach of warranty due to hidden defects:


10/18

D% G$?+ v. T(8(" C$(2;;6

F!"#:

• *oember "., !22. + Petitioner 0arlos >e


11/18

RODRIGUEB v. FINDLA319;9

F!"#:

• 1odrigueG is the owner of the freight ship Constancia, a essel currently under construction anddesignated for coastwise trade in the Philippines:

•

)n !2 September !2#., 1odrigueG entered into a contract of sale with indlay K 0o: through theagent (illiam Swann, a construction engineer and naal architect and a long time employee ofthe company: n the agreement, 1odrigueG agreed to purchase certain machinery from indlay tobe placed in the essel: 5he point of contention in this case is the specifications of the brasspropeller:

• 5he contract further stated'=)ne brass propeller of ?6 diameter and suitable pitch for an expected speed of ship about 2 !U" knots:

VVVVVVV=5he whole to be suitable for a wooden ship of !@# ft: long by "% ft: beamand !% ft: depth, as per plan supplied by Sr: Cuan 1odrigueG:=

• Prior to the written agreement of the parties, Swann isited the shipyard numerous times todetermine the kind and nature of the machine suitable for the ship being built:

• R('*,$%? #""%' "/% #%%' %!%##*8 "/" "/% Constancia #/($&' /v% , (*'%* "( %

v,&&% # !(#"),#% v%##%&0 ' &%" "/% ,'0 "$*%0 ' !(#"*$!",( ( "/%

+!/,%*8 "( "/% *%"%* ()&%'% ' %=%*,%!% ( S).• >uring the course of the negotiations and before the said contract was entered into, 1odrigueG

deliered to Swann a plan of the essel:• 5hereafter, Swann deliered to 1odrigueG a plan of the entire essel, showing the machinery

placed therein, the length and breadth of the hull, its general outline and the number of feet ofwater which it drew:

• >uring the process of manufacturing the propeller, indlay discoered that the ?’ in diameterbrass propeller would not be able to generate the specified speed so indlay asked 1odrigueG ifhe could instead place a !#’ propeller:

• 1odrigueG disagreed with the proposal since a bigger propeller will not fit in the structure of theessel:

• pon the trial of the ship, after the installation of its machinery, it was found that all of themachinery worked well except the propeller: 5his, instead of giing the ship a speed of about 2!U" knots an hour, gae a speed of less than . knots an hour: urthermore, indlay failed todelier some goods it promised to gie to 1odrigueG:

• 1odrigueG instituted a claim of damages for the damage it sustained due to indlay’s breach ofcontract:

• L()%* C($*": 5he court ruled in faor of indlay awarding it the amount of P2,"!3:3# which wasthe unpaid balance of 1odrigueG for the machineries installed: *o findings as to the breach ofcontract by indlay:

I##$%: ()* indlay is also required to meet the speed requirements of the ship: + 3ES. T/%*%(*%0F,'&8 ,# &,&% "( 8 '+%#.

H%&':

!: 5he language is without ambiguity: 5he defendant agrees therein to furnish =)ne brass propeller of ?6diameter and suitable pitch for an expected speed of ship about 2 !U" knotsB= and =5he whole to besuitable for a wooden ship !@# ft: long by "% ft: beam and !% ft: depth, as per plan supplied by Sr: Cuan1odrigueG:=

": Swann was a naal architect and marine engineer of long experience and the general details relatie tothe kind and character of the machinery were left to the defendant: 5he thing mainly insisted upon by1odrigueG was the result that should be produced: 1odrigueG placed the condition only that it shouldproduce a certain result when attached to the ship Constancia:


12/18

$: Speed being so important in a essel carrying freight in competition with other essels haing a speedof 2!U" knots an hour, the parties placed in the contract a specification by which this essel should receiemachinery of such a character that it would be able to compete with other essels in a similar occupation:5hese specifications required that the essel should hae a speed of about 2 !U" knots per hour and thatthe machinery furnished for the essel should be arranged to that end, particularly the propeller:

%: 5he contention that the reason why the essel did not hae a speed of 2 !U" knots an hour after theinstallation of the machinery was because the propeller was, by the construction of the essel, forced towork in a position where it could not display its properties adequately has no merit: ;oreoer, the fact thatthey used mathematical computations to make sure that the propeller will meet the standards set wouldalso not suffice: 5he agreement was clear and unambiguous that the propeller must be able to meet therequired speed of 2 !U" knots per hour: or not meeting the set standards, indlay is in breach of thecontract:

@: I !",( ,#" +$!"$*%* (* '%&%* (* *%!/ ( )**"8 $( #&% ( (('#0)/,!/ /% %) " "/% ",+% ( "/% #&% )%*% ,"%'%' "( % $#%' (* *",!$&* $*(#%0 "/%+%#$*% ( '+%# ,# (" &,+,"%' "( "/% ',%*%!% , v&$% ( "/% (('# # )**"%'0 ' #"/%8 *(v% "( %0 # , !#%# )/%*% &,% *",!&%# *% #(&' # +%*!/',#% (* %%*& $*(#%#>$" *(,"# &(#" ' %=%#%# ,!$**%'0 %!$#% ( "/% *%!/0 +8 % *%!(v%*%'.

• 5he losses and damages for which a creditor in good faith is liable are those foreseen, or whichmay hae been foreseen, at the time of constituting the obligation, and which may be a necessaryconsequence of its nonfulfillment: 7Art: !!#., )ld 0iil 0ode:8

• >ue to the award of damages prayed for, 1odrigueG should only pay indlay the amountP@,"!$:@%, the difference of the unpaid price of the machinery and the award of damages7P!#,!22:$@ + P%2?@:?!8:5his case predated the *00: *onetheless, indlay is liable to1odrigueG because it breached the contract of sale they entered into: 1odrigueG gaespecifications during their contract negotiations as to the speed requirement of the boat thatshould be met by the brass propeller: indlay was not able to meet such requirement andtherefore liable for haing breached the warranty as to fitness of the propeller:


13/18

S($#%# T(*!$"(* v. %*%2;;5

FACTS:

• Spouses Salador purchased a lot in Ayala Alabang Jillage sub/ect to the condition that no lot

may be resold by the buyer unless a residential house has been constructed thereon:• Spouses Salador sold the land to spouses Nernabe but in light of the said condition, the former

executed a special power of attorney to authoriGe the latter to construct the house and transferthe property in their name:

• 5he Nernabes, without making improements, sold the land to spouse 5orcuator and agreed thata new deed of sale and irreocable SPA to construct the house from Salador to 5orcuators shallbe made:

• Nut the deed of sale was not consummated nor was payment effected: Nernabe sold it to Angeles, brother in law:

• 5orcuators filed for specific performance or rescission with damages:

• 5he trial court denied petitioners6 complaint on three 7$8 grounds, namely'o 7!8 the alleged nullity of the contract between the parties as it iolated Ayala 0orporation6s

condition that the construction of a house is a prerequisite to any sale of lots in Ayala Alabang JillageB

o 7"8 non-payment of the purchase priceB ando 7$8 the nullity of the contract as it called for payment in nited States >ollars: 0ourt of

Appeals added a fourth basis for denying petitioners6 appeal and that is the alleged nullityof the agreement because it depried the goernment of taxes:

I##$%: 7!8 ()* the endee is obligated to pay the price before transfer- es

H%&':

7!8 5his is a contract to sell:

• irstly, the agreement imposed upon petitioners the obligation to fully pay the agreed purchaseprice for the property:

• Petitioner ;ario 5orcuator acknowledged this fact when he testified that the deed of sale andoriginal special power of attorney were only to be deliered upon full payment of the purchaseprice:

• 5he records are bereft of any indication that petitioners eer attempted to tender payment orconsign the purchase price as required by law:

• ;ere sending of a letter by the endee expressing the intention to pay without the accompanyingpayment is not considered a alid tender of payment:

• 0onsignation of the amount due in court is essential in order to extinguish the obligation to payand oblige the endor to coney title:

• 9en assuming that the agreement was a contract of sale, respondents may not be compelled todelier the property and execute the deed of absolute saleB tender of payment and consignation isneeded:

• Secondly, the parties clearly intended the construction of a residential house onthe property asanother suspensie condition which had to be fulfilled: f it was a contract of sale, the specialpower of attorney would hae been entirely unnecessary as petitioners would hae had the rightto compel the Saladors to transfer ownership to them:

• 5hirdly, there was neither actual nor constructie deliery of the property to petitioners: 5aken byitself, in fact, the special power of attorney can be interpreted as tied up with any number ofproperty arrangements, such as a contract of lease or a /oint enture:

• SPA and summary agreement executed in faor of 5orcuators by the Saladors does notconstitute as !%#$ 798 of the 0iil 0ode on Statute of rauds concerning leases for longer than !


14/18

year or sale of real property:• 5he special power of attorney does not contain the essential elements of the purported contract

and, more tellingly, does not een refer to any agreement for the sale of the property:• n any case, it was rendered irtually inoperable as a consequence of the Saladors6 adamant

refusal to part with their title to the property:• 5he summary of agreement, on the other hand, is fatally deficient in the fundamentals and

ambiguous in the rest of its termsB unclear purchase price and uncertain payment of taxes:• Ne that as it may, considering our ruling that the agreement was a contract tosell, respondents

were not obliged to coney title to the property before the happening of two 7"8 suspensieconditions, namely' full payment of the purchase price and construction of a residence on theproperty:

• 5hey were acting perfectly within their right when they considered the agreement:

Side issues'

• Petitioner condition of construction before selling not submitted as eidence:

• 5he fact that petitioners agreed to construct a residential house on the property in the name ofthe Saladors further proes that they knew that a direct sale to them of a acant lot wouldcontraene the condition imposed by Ayala 0orporation on the original buyers of lots in Ayala

Alabang Jillage:• Fence, they agreed on the elaborate plan whereby the Salador spouses, in whose names the

property was registered, would execute a special power of attorney in faor of petitionersauthoriGing the latter to construct a residential house:

• ;oroer, it was annotated in back of the title which was submitted as eidence:

• 5ransaction did not offended good customs and morals, as 50 and 0A upheld, since thecondition of construction under deed of sale from Ayala before selling does not require theconstruction by the original lot buyers himself: Since contract to sell, no transfer still:

• *on-payment of capital gain tax is not an issue since contract to sell, no transfer of ownership:


15/18


16/18

question from the date of the filing of the complaint by Alegria, and under Art: ""#2, he must pay legalinterests thereon from said date: >ecision affirmed:

S($#%# M/$#8 v. .E. S D,%( GR N(. 179675 J$% 0 2;11 N!/$*0 J.FACTS'

• Spouses ;ahusay 7P8 purchased seeral lots in Aurora Subdiision, ;etro ;anila, owned byN:9: San >iego nc: 718 5hey executed " contracts'

• 0ontract to Sell&executed ;ay %, !2.$ for P$$,###

• 0ontract to Sell&executed August !, !2.@ for P!2.,#%# plus !"E interest p:a: payable inmonthly installments

• >ue to non-payment since )ctober !2.?, 1 was constrained to file a case for cancellation ofcontracts: 0ase was dismissed by 150 for lack of /urisdiction:

• )ctober !$, !2?2&a C(+*(+,#% A*%%+%" was entered into, whereby, P agreed to pay 1the remaining balance of all the lots in the manner and under the terms agreed upon by them:

• 5hey again failed to comply with the terms embodied in this agreement, so 1 filed a complaint forspecific performance:

• RTC' 1uled in faor of N:9: San >iego, ordered Sps ;ahusay to comply with 0ompromise Agreement L >amages >efense' t was the Fousing and Hand se 1egulatory Noard and notthe 150 that had /urisdiction oer sub/ect matter: ;oreoer, the 0ompromise Agreement was

unenforceable because it was only rancisca ;ahusay 7wife8 who signed it without the consentof her husband:

• CA' Affirmed with modification: 150 had /urisdiction because action was for Specific PerformancewD >amages, which is in the nature of ordinary money claims filed by unpaid seller against buyer:Nut the 0ompromise Agreement was null and oid ab initio because the Agreement inoledcon/ugal propertiesB husband could not be bound because he did not sign: P to pay all unpaidamortiGations including amortiGation yet to be paid until the expiration of the contract to sell:

• 1 filed a M(",( (* C&*,,!",( of the 0A decision: t prayed for the inclusion of the penaltiesand interest in the computation of the unpaid amortiGations which it claimed is customary in realestate business and compliant with the 0ontracts to Sell:

• 0A issued a resolution clarifying that its earlier decision included the payment of all penalties andinterest due on the unpaid amortiGations:

• P filed a ;otion to >elete and (ithdraw 1esolution for the Amendment and ;odification of

)riginal >ecisionB claimed that the ;otion for 0larification wasn’t intended to clarify but to amendthe decision to include the !"E interest: 0A decision is already final and executory so noamendments should be allowed: >9*9> by the 0A: t was only a clarification:

ISSUE' (o* P should pay the interest and penalties under the 0ontracts to Sell

HELD' 3ES.

• 1’s ;otion for 0larification did not really partake of the nature of a motion for reconsideration, asto amend the >ecember "#, "##! >ecision:

• 5here was nothing substantial to ary, considering that the issues between the parties weredeemed resoled and laid to rest:

• 5here was a compelling reason for the 0A to clarify its original >ecision to include the payment of all penalties and interest due on the unpaid amortiGations, as proided in the contracts

• 0onsidering that the alidity of the contracts was neer put in question, and there is nothing onrecord to suggest that the same may be contrary to law, morals, public order, or public policy,there is nothing unlawful in the stipulation requiring the payment of interestDpenalty at the rateagreed upon in the contract of the parties:

• 0ourt further notes that P are in actualDphysical possession of the properties and en/oying thebeneficial use thereof, despite the payment of only P!$$,?.":.3, as of Canuary $#, !2.2:

• t would be grossly unfair for respondent to be depried of the amount it would hae receiedfrom the sale of their properties, while petitioners benefited from the use and continuedpossession of the properties een if they made no payments since )ctober !2.?: 5his would


17/18

constitute un/ust enrichment:• ;oreoer, the fair market alue of the land has tremendously increased oer the past years: 5hey

should pay the interestDpenalty for the delay in payment:• inally, the 0ourt notes that this case has dragged on for many years since !2.?: n order to writ

finis to this protracted litigation between the parties, we resole the case in accordance with /urisprudence on the matter:

•ndeniably, the instant case is a sale of real property where the purchase price is not paid in full:

• 5he unpaid seller’s remedy is either an action to collect the balance or to rescind the contractwithin the time allowed by law:

• Since rescission is no longer an option considering that petitioners hae been in possession ofthe properties for a considerable period of time, substantial /ustice dictates that respondent beentitled to receie the unpaid balance of the purchase price, plus legal interest thereon'

• n line with Eastern Shipping "ines #nc. v. CA$ 5he legal interest to be paid on the amount shall be!"E per annum, which shall commence from April !?, !22#, when respondent filed the 0omplaintfor Specific Performance with the 150, Nranch .$, ;alabon, in 0iil 0ase *o: !%$$-;*, whichshall be considered as /udicial demand, until the finality of this >ecision:

• Another !"E interest per annum shall be paid on the amount due and owing as of and from thedate of finality of the >ecision until full payment:

• DISPO' (F919)19, the petition is >9*9>:

• 5he 1esolution of the 0ourt of Appeals dated September !!, "##. is A1;9> with;)>0A5)*:

• 5he trial court is directed to compute the unpaid balance of the purchase price of each contract7which is the unpaid amortiGation including amortiGations yet to be paid until the expiration of the0ontracts to Sell8 with dispatch:

• 5he legal interest to be paid on said amount is 5(9HJ9 P9109*5 7!"E8 per annum, whichshall commence from April !?, !22#, when /udicial demand was made on petitioners:

• Another !"E interest per annum shall be paid on the amount due and owing as and from the dateof finality of this >ecision until full payment would hae actually been made:

ATIGAA v. CA


18/18

1962

F!"#:

J:M: Hundberg, owner and operator of nternational 5ractor and 9quipment 0o:, Htd: adertised forthe sale of a >ouble >rum 0arco 5ractor (inch: Artemio Matigbak agreed to purchase a winch for

Php!"M, payable at Php @M upon deliery and balance of Php .M within 3# days from >aniel9angelista, the actual owner:5he winch needed some repairs, which could be done in the shop of Hundberg: t was stipulated thatthe amount necessary for the repairs will be adanced by Matigbak but deductible from the initialpayment of Php @M 1epairs were undertaken and the total of Php ",#"2:?@ for spare parts wasadanced: or one reason or another, the sale was not consummated and Matigbak sued 9anglista,Hundberg and the latter6s company, for the refund of such amount:Hundberg' *o liability for the amount since the obligation for refund was purely a personal accountbetween 9angelista and Matigbak:9angelista' Matigbak refused to comply with his contract to purchase the winch and as a result9angelista was forced to sell the same to a third person for only Php !#M, thus incurring a loss ofPhp "MH0' )rdered Hundberg and 9angelista to pay Php ",#"2:?@

0A' 1eersed /udgment because 9angelista had the right to recoer his loss of Php "M, which isthe difference between the contract price for the sale of the winch between him and appellee and theactual price for which it was sold better the latter had refused to carry out his agreementn Hanlon, if the purchaser fails to take deliery and pay the purchase price of the sub/ect matter ofthe contract, the endor, without the need of first rescinding the contract /udicially, is entitled to resellthe same, and if he is obliged to sell it for less than the contract price, the buyer is liable for thedifference:

5his loss 7Php "M8 should be set off against the sum claimed by Matigbak 7Php",#"2:?@8, whichwould leae in his faor a balance of Php "2:?@:

I##$% ()* 9angelista had a right to recoer his loss as a result of the resale 3ES

R",(

• acts of the case identical to those of the Fanlon : Faussernan case

• f the purchaser of goods upon an executory contract fails to take deliery and pay the purchaseprice, the endor is entitled to resell the goods: f he is obliged to sell for less than the contractprice, he holds the buyer for the differenceB if he sells for as much as or more than the contractprice, the breach of contract by the original buyer is dammum absque in%uria: Nut it has neerbeen held that there is any need of an action of rescission to authoriGe the endor, who is still inpossession, to dispose of the property where the buyer fails to pay the price and take deliery:

• Matigbak failed to take deliery of the winch and such failure or breach was attributable to him:5he right to resell the equipment, therefore, cannot be disputed

• CA AFFIRMED

Documents

Sales Batch 10