Sales Digests Block 2b 2016

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BLOCK B 2016

Compiled by: Gil Arandia

Pucha nasa board pa talaga yung procurator in rem suan

(Photo is for those people na may crush kay maam hahaha)

BLOCK B 2016

SALES DIGESTS BLOCK 2B 2016


Altavas, Arandia, Avila, Bautista, Bantug, Camacho, Catacutan-Estabillo, Cayetano, Cocabo Cusipag, Dantes, Dilangalen, Diego, Elamparo, Flores, Galang, Garcia, Geraldez, Guiyab, Henares, Hizon, Lee, Manalo, Matias, Mendoza, Morales, Ong, Santos, Sarmiento, Yap

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Table of Contents Chapter 1: Nature of a Sale ...........................................................4

GAITE v. FONACIER ...................................................................4

CELESTINO CO & COMPANY vs.COLLECTOR OF INTERNAL

REVENUE..................................................................................4

COMMISSIONER OF INTERNAL REVENUE v ENGINEERING

EQUIPMENT & SUPPLY CO. ........................................................5

QUIROGA V PARSONS ...............................................................7

Puyat v Arco .............................................................................8

KER & CO. LTD. vs. Jose B. LINGAD. ............................................9

Lo v. KJS.................................................................................11

Chapter 2: Parties to a Contract of Sale ........................................12

DOMINGO v CA.......................................................................12

PARAGAS v. HEIRS of BALACANO .............................................14

CALIMLIM-CANULLAS v. FORTUN .............................................15

MATABUENA v CERVANTES .....................................................16

PHILIPPINE TRUST CO. V ROLDAN ............................................17

Macariola v Asuncion ..............................................................18

DOMINGO D.RUBIAS vs. ISAIAS BATILLER ................................20

DAROY V ABECIA.....................................................................21

Chapter 3: Subject Matter of a Contract of Sale ............................22

SIBAL Vs VALDEZ .....................................................................22

PICHEL V. ALONZO ..................................................................23

MANANSALA VS COURT OF APPEALS........................................24

Pio Sian Melliza vs. City of Iloilo, University of the Philippines and

the Court of Appeals (1968).....................................................25

Atilano vs. Atilano (May 21, 1969)............................................27

Yu Tek & Co vs. Basilio Gonzales ..............................................29

NATIONAL GRAINS AUTHORITY and WILLLAM CABAL vs. THE

INTERMEDIATE APPELLATE COURT and LEON SORIANO, ...........30

JOHANNES SCHUBACK & SONS PHILIPPINE TRADING

CORPORATION vs. THE HON. COURT OF APPEALS ....................31

CONCHITA NOOL and GAUDENCIO ALMOJERA vs. COURT OF

APPEALS, ANACLETO NOOL and EMILIA NEBRE .........................32

Chapter 4: Price and Other Consideration. ...................................33

Mitsui Bussan Kaisha vs. Manila Electric Railroad and Light

Company ................................................................................33

VILLANUEVA V. CA ..................................................................35

JOSE R. MORENO, JR. vs Private Management Office ................36

Navarra v. Planters Development Bank ....................................39

Mapalo v. Mapalo ...................................................................40

Rongavilla v. CA ......................................................................42

Mate v. CA..............................................................................44

Yu Bun Guan vs Elvira Ong .......................................................45

Vda Catindig v Heirs of Catalina Roque .....................................46

Ong v. Ong .............................................................................47

Bagnas v. CA ...........................................................................49



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Republic v Phil. Resources Development ..................................52

Chapter 5: Formation of a Contract of Sale...................................53

Manila Metal Container Corporation vs Philippine National Bank

..............................................................................................53

United Muslim and Christian Urban Poor Association v. BRYC....55

Carceller v. Court of Appeals....................................................58

Tayag vs Lacson ......................................................................60

Sanchez v. Rigos......................................................................61

Diamante v. CA .......................................................................62

Vazquez v. CA .........................................................................66

Nietes vs. CA...........................................................................67

Ang Yu Asuncion vs. Court of Appeals.......................................69

Equatorial Realty v. Mayfair Theater ........................................71

Paranaque Kings vs Court of Appeals........................................73

Vazquez v. Ayala Corporation ..................................................74

RIVIERA FILIPINA vs. CA ...........................................................75

Macion v. Guiani .....................................................................80

Uraca v. CA .............................................................................82

Villonco v. Bormaheco.............................................................83

Oesmer v. Paraiso ...................................................................86

ADELFA PROPERTIES, INC vs CA................................................88

Fule v. CA ...............................................................................92

Dalion v. CA ............................................................................95

Secuya v. Selma ......................................................................96

YUVIENCO vs Dacuycuy ...........................................................97

Limketkai Sons Milling Inc. v CA ...............................................99

Limketkai v. CA (MR- 1996) .................................................... 100

Ortega v. Leonardo ............................................................... 101

Claudel vs CA ........................................................................ 102

Alfredo v. Borras ................................................................... 103

Toyota Shaw Inc. v. CA .......................................................... 106

Chapter 6- Obligations of the Seller ........................................... 107

Santos v. Santos.................................................................... 107

Dy Jr. v. CA ........................................................................... 108

Addison v. Felix..................................................................... 110

Danguilan v. IAC.................................................................... 111

Pasagui v. Villablanca ............................................................ 112

Power Commercial and Industrial Corp. v. CA ......................... 113

Chua v CA ............................................................................. 115

Vive Eagle Land Inc v CA ........................................................ 117

Behn, Meyer Co. v Yangco ..................................................... 119

General Foods Corp v. NACOCO ............................................. 120

Rudolf Leitz Inc v. CA ............................................................. 121



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Chapter 1: Nature of a Sale

GAITE v. FONACIER

Facts:

Fonacier, owner/holder of 11 iron lode mineral claims

executed a deed of assignment appointing Gaiter as his attorney-in-

fact. In light of the appointment, Gaite executed a general

assignment conveying the use and development of Fonaciers

mining claims into Larap iron mines owned by Gaite himself.

Thereafter, Gaite developed and used the mining claim. In time, he

extracted 24,000 metric tons of iron ore.

Fonacier then revoked the authority granted to Gaite. Gaite

assented, but with the condition that he receive royalties and

P75,000 for the iron ores already extracted. Fonacier then issued 2

sureties good for 1 year to answer for the P65,000 balance. The

sureties expired and Fonacier defaulted. Fonacier alleged that he is

to pay the balance only when the suspensive condition has been

fulfilled.

Issue(s):

1. W/N the payment is subject to a suspensive condition

Held:

There was no suspensive condition, only a suspensive

period. The sale or shipment is not a condition for the payment of

the balance; it was merely to fix the future date of payment.

According to the SC, a contract of sale is normally commutative and

onerous, and that the parties thereto assume a correlative

obligation. By virtue of the sale being onerous, the favored

interpretation of its terms favor the greater reciprocity of interests.

Hence, the buyers obligation exists, only its due date is postponed.

CELESTINO CO & COMPANY vs.COLLECTOR OF INTERNAL

REVENUE Facts:

Celestino Co & Company, registered under the trade name Oriental

Sash Factory, markets itself as Manufacturers of all kinds of doors,

windows, sashes, furniture, etc. used season-dried and kiln-dried

lumber, of the best quality workmanships. From 1946 to 1951, it

paid taxes equivalent to 7% on the gross receipts under Sec. 186 of

the NIRC(National Internal Revenue Code), which is a tax on the

original sales of articles by manufacturer, producer or importer.

However, in 1952 it began to pay only 3% tax under Sec. 191, which

is a tax on sales of services. Petitioner claims that it does not

manufacture ready-made doors, sash and windows for the public,

but only upon special orders from the customers, hence, it is not

engaged in manufacturing, but only in sales of services.

Issue: Whether the petitioners claim is correct, that it is merely a

special service provider NO.

Held:

1. As a general rule, factories receive orders for doors and

windows of special design only in particular cases but the

bulk of their sales is derived from a ready-made doors and

windows of standard sizes for the average home. Celestino



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Co & Company habitually makes sash, windows and doors,

as it has represented in its stationery and advertisements to

the public. That it "manufactures" the same is practically

admitted by appellant itself. The fact that windows and

doors are made only when customers place their orders

does not alter the nature of the establishment.

2. It is not true that it serves special customers only. Citing one

of its clients, Don Toribio Teodoro & Sons Inc, the court

ruled that anyone who sees, and likes, the doors ordered by

it, may identically purchase it provided he pays the price.

The appellant will not refuse, for it can easily duplicate or

even mass-produce the same doors.

3. The nature of the work they do does not fall within the

definition of a construction work contractor enumerated in

section 191 of the NIRC

4. Appellant invokes Article 14671 of the New Civil Code to

bolster its contention that in filing orders for windows and

doors according to specifications, it did not sell, but merely

contracted for particular pieces of work or "merely sold its

services". HOWEVER, Oriental Sash Factory did not merely

sell its services to Don Toribio Teodoro & Co. because it also

1 A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or

procures for the general market, whether the same is on hand at the

time or not, is a contract of sale, but if the goods are to be

manufactured specially for the customer and upon his special order,

and not for the general market, it is contract for a piece of work .

sold the materials. Also, the orders herein exhibited were

not shown to be special as the article expressed. They

were merely orders for work.

COMMISSIONER OF INTERNAL REVENUE v ENGINEERING

EQUIPMENT & SUPPLY CO. FACTS:

Engineering Equipment & Supply (EES) was engaged in the business

of designing and installing central air-conditioning systems. On July

27, 1956, certain Juan de la Cruz wrote to the CIR denouncing EES

for tax evasion. Pursuant to Section 1852 of the Tax Code, EES was

assessed by the CIR for 30% advanced sales tax plus surcharges (of

25% and 50%) for misdeclaring its importation of air conditioning

units and parts and accessories. EES appealed to Court of Tax

Appeals (CTA), arguing that they are contractors and not

manufacturers, and thus, should only be liable for the 3% tax on

sales of services or pieces of work. The Court of Tax Appeals

reversed the order of the CIR, declaring that EES is a contractor.

Hence, this appeal.

ISSUE: W/N EES is a manufacturer of air conditioning units under

Section 185 of the Code or a contractor (piece of work) under

Section 191.

2 Sec 185. There shall be levied, assessed and collected once only on every

original sale, barter, exchange, or similar transaction intended to transfer

ownership ofa tax equivalent to 30% of the gross selling price.



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HELD:. EES is a contractor, subject to tax stated in Section 191 of

the Code.

There is a distinction between a contract of sale

(manufacturer) and a contract for furnishing services, labor

and materials. Such difference is tested by the inquiry of

whether the thing transferred is one not in existence and

which never would have existed but for the order of the

party desiring to acquire it, or a thing which would have

existed and has been the subject of sale to some other

persons even if the order had not been given.

o Art 1467 (Civil Code) a contract for the delivery

at a certain price of an article which the vendor in

the ordinary course of his business manufactures

or procures for the general market, whether the

same is on hand at the time or not, is a contract of

sale, but if the goods are to be manufactured

specially for the customer and upon his special

order and not for the general market, it is a

contract for a piece of work.

o A contractor is a person who, in pursuit of

independent business undertakes to do a specific

job or piece of work for other persons, using his

own means and methods without submitting

himself to control as to the petty details

Though EES imported such items, they were NOT for sale to

the general public and were used as mere components for

the design of the centralized air-conditioning system,

wherein its designs and specifications are different for

every client. Various technical factors must be considered

and it can be argued that no 2 plants are the same; all are

engineered separately and distinctly. Each project requires

careful planning and meticulous layout. Such central air-

conditioning systems and their designs would not have

existed were it not for the special order of the party desiring

to acquire it. This implies that EES did not intend to sell the

said aircon units to the general public. Thus, EES is not liable

for the sales tax of 30%.

.EES should be held liable to pay the taxes prescribed in

Section 190 of the Code. This compensating tax is not a tax

on the importation of goods but a tax on the use of

imported goods not subject to sales tax. Hence, it should

be held liable to the payment of 30% compensating tax in

accordance with Sec 190, but without the 50% mark up

provided in Section 183 (b) (I think 50% is removed because

its for contract of sale!?!?).

Also, EES should be subjected to 25% surcharge for

delinquency in the payment of the said tax, as provided in

Section 190:

o Sec 190 If any article withdraen from the

customhouse or the post office without payment of

the compensating tax is subsequently used by the

importer for other purposes, corresponding entry

should be made in the books of accounts if any are

kept or a written notice thereof sent to the



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Collector and payment of the corresponding

compensating tax made within 30 days from the

date of entry or notice, and if tax is not paid within

such period the amount of tax shall be increased by

25%....

MINOR ISSUES

1. W/N EES is guilty of fraud (tax evasion)

Held: Yes, as proven by correspondences of EES with foreign

companies wherein EES requested that words of airconditioning

equipment should not be mentioned in shipping documents.

The CTA absolved EES from paying the 50%

surcharge prescribed in Sec 183 (a) because the

surcharge Section 190 of the tax Code (where EES is

subjected to as a contractor) does not provide it.

According to CTA, where a particular provision of

the tax code does not impose a 50% surcharge as

fraud penalty, it cannot be enforced.

BUT, because the fraud is too glaring, it was held

that EES could not be absolved from the 50% fraud

surcharge. Otherwise, it would give premium to an

intolerable act of tax evasion.

2. W/N the tax assessment has prescribed

Held: no

EES contends that the prescriptive period is 5 yrs.

from importation. But the SC held that Sec 332 of

the code provides for the exceptions as to the

period of limitation of assessment and collection of

taxes :

o Sec 332 in case of a false and fraudulent

return with intent to evade tax, the tax

may be assessed, or a proceeding in court

for the collection of such tax may be begun

without assessment at any time within 10

years after the discovery of the falsity, fraud

or omission.

QUIROGA V PARSONS

FACTS:

On January 24, 1911, herein plaintiff-appellant

AndressQuiroga and J. Parsons, both merchants, enteredinto a

contract, for the exclusive sale of "Quiroga" Beds in the Visayan

Islands. It was agreed, among others, that Andres Quiroga grants

the exclusive right to sell his beds in the Visayan Islands to

J.Parsons, subject to some conditions provided in the contract.

Likewise, it was agreed that. Incompensation for the expenses of

advertisement which, for the benefit of both contracting parties,

Mr.Parsons may find himself obliged to make, Mr.Quiroga assumes

the obligation to offer and give thep reference to Mr. Parsons in

case anyone should apply for the exclusive agency for any island

notcomprised with the Visayan group; and that, Mr. Parsons may

sell, or establish branches of his agency forthe sale of "Quiroga"

beds in all the towns of the Archipelago where there are no



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exclusive agents, and shall immediately report such action to

Mr. Quiroga for his approval.

The defendant violated the following obligations: not to sell

the beds at higher prices than those of the invoices; to have an

open establishment in Iloilo; itself to conduct the agency; to keep

the beds on public exhibition, and to pay for the advertisement

expenses for the same; and to order the beds by the dozen and in

no other manner

He alleged that the defendant washis agent for the sale of his beds

in Iloilo, and that said obligations are implied in a contract

of commercial agency.

ISSUE:

1. Whether or not the defendant, by reason of the contract

hereinbefore transcribed, was an agent of theplaintiff for

the sale of his beds.

HELD:

No.

In order to classify a contract, due regard must be given to

its essential clauses. In the contract in question, there was the

obligation on the part of the plaintiff to supply the beds, and, on the

part of thedefendant, to pay their price.

That the contract by and between the defendant and the

plaintiff is one of purchase and sale, in order to show that it was not

one made on the basis of a commission on sales, as the plaintiff

claims it was, for these contracts are incompatible with each other.

But, besides, examining the clauses of this contract, none of them is

found that substantially supports the plaintiff's contention. Not a

single one of these clauses necessarily conveys the idea of an

agency.

These features exclude the legal conception of an agency or

order to sellwhereby the mandatory or agent received the thing to

sell it, and does not pay its price, but delivers tothe principal the

price he obtains from the sale of the thing to a third person, and if

he does not succeedin selling it, he returns it. By virtue of the

contract between the plaintiff and the defendant, the latter,

onreceiving the beds, was necessarily obliged to pay their price

within the term fixed, without any otherconsideration and

regardless as to whether he had or had not sold the beds. In respect

to the defendant's obligation to order by the dozen, the only one

expressly imposed by the contract, the effect of its breach would

only entitle the plaintiff to disregard the orders which the

defendant might place under other conditions; but if the plaintiff

consents to fill them, he waives his right and cannot complain for

having acted thus at his own free will.

Puyat v Arco

Facts:

Arco Amusement Company and Gonzalo Puyat & Sons Inc,

entered into an agreement that the latter would order sound

reproduing equipment from Starr Piano Company (which was based

in the US). Gonzalo Puyat & Sons Inc is the exclusive agent of Starr

Piano. The first and second order of the said equipment all arrived



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in due time. They were charged the price of the equipment, 10%

commission and other charges (freight, insurance, banking, etc.).

Some time later, in a civil case filed by another company against

Puyat, Arco found out that Puyat charged them with the list price

and not the net price of the equipment and that Puyat had received

discounts for the order of said equipments. By reason of said

events, Arco brought a suit to the CFI of Manila, seeking

reimbursement from Puyat. Trial Court ruled that the contract was

that of outright purchase and sale and absolved Puyat. The CA

reversed the decision by holding that the relationship between

petitioner and respondent was that of agency.

Issues:

W/N there was the contract was that of an agency or an

outright purchase and sale.

W/N there was fraud when petitioner obtained the consent

of the Arco on the price of the sound reproducing equipment.

Held:

SC sustained the theory of the trial court that the contract

between petitioner and respondent was that of purchase and sale.

The contract entered into was clear in their terms and admit no

other interpretation. The agreement between them was for Puyat

to sell to Arco the sound reproducing equipment. The 10%

commission does not necessarily make the petitioner an agent of

the respondent, as this provision is only an additional price which

the respondent bound itself to pay, and which stipulation is not

incompatible with the contract of purchase and sale. Also, SC noted

that Puyat was the exclusive agent of Starr Piano and that it is out of

the ordinary to be the agent of BOTH the vendor and purchaser

There was no fraud. It is to be observed that the twenty-five

per cent (25%) discount granted by the Starr Piano Company to the

petitioner is available only to the latter as the former's exclusive

agent in the Philippines. The respondent could not have secured

this discount from the Starr Piano Company and neither was the

petitioner willing to waive that discount in favor of the respondent.

Respondent willingly paid the price quoted and it received the

equipment and machinery as represented. It is well known that

local dealers acting as agents of foreign manufacturers, aside from

obtaining a discount from the home office, sometimes add to the

list price when they resell to local purchasers. Not every

concealment is fraud, in this issue SC said that, business acumen

permit of the loosening of the sleeves and of the sharpening of the

intellect of men and women in the business world.

KER & CO. LTD. vs. Jose B. LINGAD.

FACTS:

Petitioner Ker & Co. was held liable as a commercial broker

under Section 194(t) of the National Internal Revenue and

was assessed to be liable for P20,272.33 as commercial

brokers percentage tax.

o This liability arose when petitioner (Ker & Co. as

distributor) entered to a contract with United

States Rubber International (referred to as

Company).

o The stipulations of their contract states that:



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That the Company will from time to time

consign the specified products to the

Distributor as the Company would judge to

be necessary.

All goods consigned will remain the

property of the Company until sold by the

Distributor and all sales made by the

Distributor shall be made in his name.

However, it was also stipulated that the

contract does not constitute the Distributor

the agent or legal representative of the

Company for any purpose whatsoever.

The Commissioner of Internal Revenue therefore assessed

Ker & Co. to be a commercial broker under such agreement

and that the Court of Tax Appeals upheld such finding.

Hence, the petition to the Supreme Court

ISSUE(s):

1. W/N the relationship between Ker & Co. LTD. and United

States Rubber International is one of vendor and vendee or

broker and principal.

HELD/RATIO:

The Supreme Court affirmed the decision of the Court

of Tax Appeals finding that Ker & Co. LTD. is a

commercial broker of United States Rubber

International.

o The National Internal Revenue Code defines a

commercial broker as, all persons, other than

importers, manufacturers, producers or bona

fide employees, who, for compensation or

profit, sell or bring about sales or purchasers of

merchandise for other persons or bring

proposed buyers and sellers together.

o The Court reiterated the controlling test to be

followed as to who falls under the definition of

a commercial broker in Commissioner of

Internal Revenue v. Constantino which states

that:

Since the company retained ownership

of the goods, even as it delivered

possession unto the dealer for resale to

customers, the price and terms of

which were subject to the companys

control, the relationship between the

company and the dealer was of

agency.

o Salisbury v. Brooks supports such view:

o The transaction is a sale if such

transfer puts the transferee in the

position of an owner and makes

him liable to the transferor as a

debtor for the agreed price.

o The transaction is one of agency to

sell if the ownership of the property

delivered to the agent remained

with principal and has the right to

fix the price, control sales and



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receive the proceed less the agents

commission upon sales made.

Lo v. KJS

[G.R. No. 149420. October 8, 2003]

Facts:

Lo bought from KJS scaffolding equipment worth P540k. He

paid a downpayment of P150k, the balance to be payable in ten

monthly installments.

Upon default on the installments, both parties consented to

a dacion en pago to satisfy the debt. A deed of assignment was

executed in favor of KJS, assigning Los credit from Jomero Realty

Corp. (JRC), a company who owes him money.

The deed contained, among others, a warranty that Lo

(assignor) shall and will at times hereafter, at the request of said

ASSIGNEE, execute and do all such further acts and deeds as shall be

reasonably necessary to effectually enable said ASSIGNEE to recover

whatever collectibles said ASSIGNOR has in accordance with the true

intent and meaning of these presents.

However, when KJS tried to collect from JRC, the latter

refused on the ground that Lo was also indebted to him (JRC). So,

KJS demanded payment from Lo who however contends that his

obligation has been extinguished when they executed the deed of

assignment.

Issue:

W/N THE EXECUTED DEED OF ASSIGNMENT, A FORM OF DACION EN

PAGO, EXTINGUISHED LOS OBLIGATION TO KJS No.

Held:

1.) No. The deed of assignment served to be a dacion en pago, a

special mode of payment where the debtor offers another thing to

the creditor who accepts it as equivalent of payment of an

outstanding debt. In order that there be a valid dation in payment,

the following are the requisites:

(1) There must be the performance of the prestation in lieu

of payment (animo solvendi) which may consist in the delivery of a

corporeal thing or a real right or a credit against the third person;

(2) There must be some difference between the prestation

due and that which is given in substitution (aliud pro alio);

(3) There must be an agreement between the creditor and

debtor that the obligation is immediately extinguished by reason of

the performance of a prestation different from that due.

2.) However, although there is a dacion en pago which may

extinguish an obligation, such dacion is, by express provision of law

(Art. 1245), governed by the Law on Sales. Being governed by the

Law on Sales, Art. 1628 applies:

The vendor in good faith shall be responsible for the exis tence and

legali ty of the credit at the time of the sale , unless it should have been sold as

doubtful ; but not for the solvency of the debtor, unless i t has been so expressly

s tipulated or unless the insolvency was prior to the sale and of common

knowledge.



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Accordingly, Lo, being the vendor of his credit, is bound by

law and the stipulation on the deed to warrant the existence and

legality of the credit at the time of the sale or assignment. This he

failed to do because, as it appears, compensation had already taken

place between him and JRC. In other words, at the time he assigned

his credit to KJS, the credit was already non-existent because of

compensation had already taken place by operation of law.

Chapter 2: Parties to a Contract of Sale

DOMINGO v CA

(sorry for the long digest and dahil hindi paragraph form! heavy to

sa facts dahil 2 different versions kaya hiniwalay ko na parang

bullet form para mas malinaw. magulo din pagkasulat sa case eh)

Facts:

Paulina Rigonan owned 3 parcels of land in Ilocos. She

allegedly sold them to spouses Felipe and Concepcion Rigonan

(private respondents) who claim to be her relatives. Respondents

filed a complaint for revindication against Petitioners Eugenio

Domingo and 2 others, who claim to be Paulina's closest surviving

relatives, who allegedly took possession of the properties and

refused to vacate the same.

RESPONDENT's VERSION

-they are the owners of the three parcels of land through a deed of

sale executed by Paulina in 1965

-since then, they had been in continuous possession and had

introduced permanent provisions

-that petitioners entered the properties illegally and refused to

leave when asked to do so

PETITIONER's VERSION

-alleged deed of absolute sale is void for being spurious and for

lacking consideration

-Paulina did not sell her properties to anyone

-as Paulina's nearest surviving kin within the 5th degree of

consanguinity, they inherited the three lots upon her death in 1966

-they had been in possession of the properties for more than 10

years

- the alleged consideration for the parcels of land which was for the

price of P850 only indicates a fictitious sale

TESTIMONY FOR RESPONDENTS

1. Juan Franco testified that he was a witness to the questionned

deed. However when cross-examined and shown the deed, he

stated that the deed was not the document he signed as a witness

2. Atty Tagatag (Notary) testified that he personally prepared the

deed, that he saw Paulina affix her thumbprint, and that he signed

as both witness and notary. He also testified to notarizing Paulina's

last will and testament in 1965. The will mentioned the same lots

sold to respondents and he could not explain why.



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3. Felipe Rigonan claimed to be Paulina's close relative, that their

fathers were first cousins. But he could not remember the name of

Paulina's grandfather. His claim was disputed by defendants who

lived withh Paulina as their close kin.

TESTIMONY FOR PETITIONERS

1. Jose Flores, owner of the adjacent lot and who lived there with

Paulina since he could remember and til her death, said thathe did

not receive any notice nor offer to sell the lots. This is contrary to

the deed of sale which mentioned that all adjacent owners were

notified of the sale. He doesnt have any knowledge of any sale

2. Ruben Blanco, Refistrar of Deeds, testified that only a carbon

copy of the deed was filed in his office

3. Zosima Domingo, wife ofEugenio, testified that her husband was

Paulina's nephew ( Eugenio's father and Paulina were first

cousins) and that they lived with Paulina since 1956. They took care

of her daily needs even whenl she was hospitalized and until she

died.

RULINGS OF LOWER COURTS

1. RTC favored herein petitioners and declared them the lawful

owners and possessors by virtue of intestate succession. The deed

was found to be "fake", being a carbon copy with no original

presented, and that the document's execution was tainted with

alterations, defects, tamperings, and irregularities which render it

void ab initio. Testimonies for respondents were also rebutted as

Franco retracted his testimony, Tagatag's testimony was not

credible as he is a witness and notary to both the deed and will AND

ALSO a paid witness to the case. Also, Zosima Domingo, Paulina's

housekeeper, testified that he did not seeTagatag and the other

parties in Paulina's house on the alleged date of the deed's

execution.

2. CA reversed and ordered herein petitioners to vacate the

property.

Issue

W/N the existence and due execution of the deed of sale was

established. --NO.

Ruling

1. Respondents only presented a carbon copy of the deed. Although

CA calls it a "duplicate original", it contained filled in blanks and

alterations.It also did not bear Paulina's signature but only her

alleged thumbprint. Franco, also testified that said deed was not the

one he signed as witness. The only testimony available for them is

Atty Tagatag's, which is uncorroborated and self-serving

2. Irregularities abound regarding the execution and registration of

the alleged deed of sale. The carbon copy had intercalations and

discrepancies allegedly due to blanks left unfilled by Tagatag during

its registration. The alleged other copies also bore different dates of

entry and the deed was registered long after its date of execution

and after Paulina's death. Paulina, the alleged vendor, was not given

a copy.



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Also, Paulina was never asked to vacate the premises she

purportedly sold, allegedly because Felipe agreed to let Paulina to

stay in the house until her death. In one case, The buyer's

immediate possession and occupation of the property was

deemed corroborative of truthfulness and authenticity of the deed

of sale. The alleged vendor's continued possession in this case

throws an inverse implication, a serious doubt on the due

execution of the deed of sale.

It is also noteworthy that the same parcels of land involved

here were still included in he will subsequently executed by Paulina.

3. The price of P850 allegedly paid by respondents for 9 parcels of

land, including 3 parcels in dispute, a house, and a warehouse,

raises further questions. Consideration is the why of the contract,

the essential reason which moves the contracting parties to enter

into the contract. Since Paulina is well-off, we see no compelling

reason for her to sell the subject properties at a meager price of

P850. (Fictitious and grossly and shockingly inadequate

consideration -- sale is void ab initio)

4.The general rule is that a person is not incompetent to contract

merely because of advanced years or by reason of physical

infirmities. However, when such age or infirmities have impaired

the mental faculties so as to prevent the person from properly,

intelligently, and firmly protecting her property rights, then she is

undeniably incapacitated.At the time of the execution of the

alleged contract, Paulina was already of advanced age and senile.

Zosima he housekeeper testified that at the time of the alleged

execution of thhe deed, Paulina was already incapacitated physically

and mentally (she was 80 y/o.Zosima narrated that at that time,

Paulina plays with her waste and urinates in bed). These raise doubt

that she consented to the sale of and the price of the properties.

There is also no receipt.

IF EVER ASKED: Procedural Issues raised by Respondents

1. Factual determination by the trial court lacks credibility for itwas

made by trial judge who presided only in one hearing of the case

COURT RULED: A judge may validly render a decision although he

has only partly heard the tertimony of the witnesses since he could

rely on the records of the case

2. The Petition lacks a certification against forum shopping

COURT RULED: Petitiones averred that they attached one in the

copy intended for this Court. This is substantial compliance

3. Petition must be deniedbecause it does not present

anybsubstantial legal issue, but factual or evidentiary ones which

were already firmly resolved by the CA

COURT RULED: This petition is properly given due course though

mainly factual because of the contradictory findings of the trial

court and the CA. The latter court apparenlty overlooked certain

relevant factswhich justify a different conclusion.

PARAGAS v. HEIRS of BALACANO

G.R. No. 168220 August 31, 2005



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Facts:

Gregorio Balacano was the registered land owner of Lots

1175-E and 1175-F in Santiago City, Isabela. He was hospitalized for

suffering from liver cirrhosis on June 28, 1996 at the Veterans

Hospital in Nueva Viscaya, and was later on transferred to Veterans

Memorial Hospital in Quezon City. He died on July 28, 1996.

On July 22, 1996, or barely a week before his death,

Gregorio purportedly sold Lot 1175-F and a portion of 1175-E to

spouses Rudy and Corazon Paragas for P500,000. On October 17,

1996, the spouses sold a portion of Lot 1175-E to Catalino, one of

the children of Gregorio.

On October 22, 1996, the grandchildren of Gregorio then

filed a complaint for annulment of sale and partition. They allege

that their grandfather could not have sold the subject lots because

at the time of the execution of the deed of sale, their grandfather

was seriously ill and dying at that time, which vitiated his consent to

the disposition of the property.

Issue:

1. W/N the sale of the lots are valid

Held:

No. In Domingo v. Court of Appeals, the Court declared as

null and void the deed of sale therein inasmuch as the seller, at the

time of the execution of the alleged contract, was already of

advanced age and senile. The general rule is that a person is not

incompetent to contract merely because of advanced years or by

reason of physical infirmities. However, when such age or

infirmities have impaired the mental faculties so as to prevent the

person from properly, intelligently, and firmly protecting her

property rights, then she is undeniably incapacitated.

In the case at bar, the deed of sale was allegedly signed by

Gregorio on his death bed in the hospital. Gregorio was an

octogenarian and was suffering an illness at that time

circumstances which raise grave doubts on his physical and mental

capacity to freely consent to the contract.

CALIMLIM-CANULLAS v. FORTUN

FACTS

Mercedes and Fernando were married in 1962 and had 5

children. They lived in a small house on the residential land in

question. Fernando inherited such land after the death of his father

in 1965. In 1978, Fernando left his family to live w/ his concubine

Corazon. He then sold said lot w/ the house in favor of Corazon for

P2,000.00. Corazon, unable to take possession of the house and lot,

filed a complaint for quieting of title. Mercedes objected alleging

that the the sale of the land together with the house and

improvements to Corazon was null and void because they are

conjugal properties and she had not given her consent to the sale.

The trial court at first ruled in favor of Corazon as the lawful

owner of the land as well as of the house erected on the land.

However, lower court later modified the judgment by declaring that

Corazon is the lawful owner of the land but the sale of the conjugal

house was null and void.



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ISSUES

(1) W/N the construction of a conjugal house on the exclusive

property of the husband ipso facto gave the land the character of

conjugal property; and

(2) W/N the sale of the lot together with the house and

improvements thereon was valid under the circumstances

surrounding the transaction.

HELD

(1) YES. According to Article 158 of the Civil Code, buildings

constructed at the expense of the partnership during the marriage

on land belonging to one of the spouses also pertain to the

partnership, but the value of the land shall be reimbursed to the

spouse who owns the same. Therefore, Fernando could not have

alienated the house and lot to Corazon since Mercedes had not

given her consent to said sale.

(2) NO. The sale was null and void for being contrary to morals and

public policy. The law generally prohibits spouses from selling or

donating properties to each other; the same prohibitions apply to a

couple living as husband and wife w/o the benefit of marriage. To

rule otherwise would be to put the persons in guilt at a better

position than those legally married. This is dictated by the public

interest.

MATABUENA v CERVANTES Facts:

On February 20, 1956 Felix Matabuena executed a deed of

donation inter vivos in favor of Petronila Cervantes, his common-

law spouse. They married on March 28, 1962. Unfortunately, on

Sept. 13 1962, Felix died intestate (um... it means: Having made no

legal will). Cornelia Matabuena, Felix only sister and nearest

relative to him, questioned the validity of the donation. She claimed

that the ban on donations between spouses should also apply to

common-law marriages. She had the land declared in her name by

virtue of an affidavit on self-adjudication, paying the estate and

inheritance taxes as well. On November 23, 1965, the lower court

upheld the validity of the donation saying that it was done while the

spouses werent married yet, hence the prohibition on art. 133 does

not apply. Cornelia then appealed to the supreme court

Issue:

W/N the ban on a donation between the spouses during a marriage

applies to common-law relationship

Held:

The supreme court reversed the decision of the lower court.

While Article 133 of the Civil Code considers as void a donation

between the spouses during marriage, policy consideration of the

most exigent character as well as the dictates of morality requires

that the same prohibition should apply to a common-law

relationship, as it is contrary to public policy (JBL Reyes,

Buenaventura v. Bautista 1954). The law prohibits donations to the



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other consort because of fear of undue pressure and influence upon

the donor. So long as marriage remains the cornerstone of family

law, reason and morality alike demand that the disabilities

attached to marriage should likewise attach to concubinage.

(Spirit of the Law: StatCon: Whatever omission may be apparent in

an interpretation purely literal of the language used must be

remedied by an adherence to its avowed objective)

However, the lack of validity of the donation by the deceased to

appellee does not necessarily result in appellant having exclusive

right to the disputed property. As a widow, Cervantes is entitled to

one-half of the inheritance, and the plaintiff, the surviving sister to

the other half.

PHILIPPINE TRUST CO. V ROLDAN Facts:

Mariano Bernardo inherited 17 parcels of land from his

deceased father. Since Mariano was a minor, guardianship

proceedings were instituted and her step-mother, Socorro Roldan

was appointed as his guardian. Roldan filed in said guardianship

proceedings a motion asking for authority to sell as guardian the 17

parcels for the sum of P14,700 to Dr. Fidel C. Ramos, her brother-in-

law, the purpose of the sale being allegedly to invest the money in a

residential house in Tindalo Street Manila, which the minor desired

to have. The motion was granted and she sold the land with judicial

confirmation of the sale. After a week, Dr. Ramos sold to her the

same lands for P15,000. Later on, Roldan sold 4 parcels out of the

17 to Emilio Cruz. Philippine Trust Company subsequently replaced

Roldan as guardian and sought to declare as null and void the three

sales that occurred stating that the first two (between Roldan and

Dr. Ramos and vice versa) was against Article 1459 of the Civil Code

and that the third sale was also ineffectual because Roldan had

acquired no valid title to convey to Cruz.

Issue:

1. w/n the sale of the 17 parcels of land was null and void for

violation of Article 1459 of the Civil Code which prohibits a

guardian from purchasing either in person or through the

mediation of another the property of her ward.

Held:

The Supreme Court annulled the 3 contracts of sale in

question; declared the minor as the owner of the 17 parcels of land

along with its fruits, with the obligation to return to Roldan the

price of P14,700 with legal interest.

Guardianship is a trust of the highest order, and the trustee

cannot be allowed to have any inducement to neglect his wards

interest and in line with the courts suspicion whenever the

guardian acquires the wards property, the Court has no hesitation

to declare that in this case, in the eyes of the law, Socorro Roldan

took by purchase her wards parcels thru her brother-in-law, and

that Article 1459 ofthe Civil Code applies.

Even if no collusion is proved or that the guardian may have

acted without malice, the fact remains that she acquired the

properties of her protg through her brother-in-law.. Due to the

very short time between the two sales (a week), it may be deduced

that she planned to acquire the properties for herself at the time of



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selling them to Dr. Ramos. The sale between Roldan and Cruz is

likewise void because Roldan never acquired title to the parcels of

land.

More Information:

The Philippine Trust Company filed the case against Roldan

before the CFI Manila which held that there was no proof that Dr.

Ramos was a mere intermediary or that the latter had an agreement

with Socorro to buy the parcels for her benefit. The trial court

upheld the contracts but allowing the minor to repurchase all the

parcels by paying P15, 000, within 1 year. The CA affirmed the

judgment. Hence, the appeal to the SC which reversed the decision.

The defense sought by Roldan through Rodriguez v. Mactal

does not apply because in that case the guardian sold the property

of her ward in 1926 and repurchased it two years after which is

enough to dispel the natural suspicion of the guardians motives or

actions. In the present case, only 1 week had elapsed between the

first two sales.

Minor on losing end in the transaction. The calculation, that

the investment in the Tindalo Street house produces to the minor

the rentals of P2,400 yearly while the parcels of land yield for the

stepmother an average of P1,522 yearly, does not include the price

of the lot on which the house was erected. Estimating such lot at

P14,700 only, the result is that the price paid for the 17 parcels gave

the minor an income of only P1,200 a year, whereas the harvest

from the seventeen parcels netted his step-mother a yearly profit of

P1,522.00. The minor was on the losing end.

Macariola v Asuncion Who were the petitioners/respondents?

Macariola: A civil case for partition of property was decided after

her father died. She was unhappy with her share. Apparently it

was the smallest and least valuable. So naturally she sued to

annul.

Judge Asuncion: The Judge who decided Civil Case 3010. He later

purchased a lot which was part of that involved in the partition of

that case.

Facts:

Both the petitioner and the respondents in the antecedent civil case

are the children of a certain recently deceased Francisco Reyes. The

two contending parties in this case were Macariola, child of Reyes

by his first wife, and the remaining Reyeses, Franciscos children

with his second wife. The case stemmed from a dispute regarding

how to divide the estate of the late Francisco among his various

heirs, and for this purpose a civil case had been filed previously

which resulted in a project of partition among the properties as

between the Macariolas and the Reyeses, duly approved by both.

The problem emerged when one of the properties solely owned by

Francisco Reyes, Lot Number 1184, was subdivided after the Project

of Partition. It was divided into 5 lots, Lot 1184-A through E.

Lot 1184-E (2,172 sqm) was thereafter reconveyed (sold) to Dr.

Arcadio Galapon and wife, in 1964. On 1965, Galapon thereafter

sold a portion of this lot to Judge Asuncion (he was the judge that

handled the previous Civil Case regarding partition) and wife. The

year after (1966), The spouses Galapon and Asuncion sold their



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collective shares and interests in Lot 1184-E to Traders

Manufacturing and Fishing Industries, Inc. of which the spouses

Asuncion were shareholders.

On 1968, Macariola, filed a complaint to annul the partition of the

property. It was only then that Macariola discovered that a lot was

already owned by the Judge. Learning of what transpired, Macariola

filed a complaint against Judge Asuncion with four causes of action:

1) Violation of Article 1491 of the Civil Code by

purchasing a lot which was the subject of decision by

him in a judicial proceeding.

2) Violation of Anti-Graft and Corrupt Practices Act by

associating with Traders Manufacturing and being a

stockholder therein while at the same time a presiding

judge.

3) That he willingly associated with an impostor lawyer

who was a stockholder at Traders.

4) That he lacked judicial ethics.

Issue Important to Sales:

I) Whether or not Judge Asuncion Violated Article 1491 of

the Civil Code: No

Article 1491 states that:

Article 1491. The following persons cannot acquire by purchase,

even at a public or judicial action, either in person or

through the mediation of another:

"(5) Justices, judges, prosecuting attorneys, clerks of superior and

inferior courts, and other officers and employees connected with

the administration of justice, the property and rights in litigation or

levied upon an execution before the court within whose jurisdiction

or territory they exercise their respective functions; this prohibition

includes the act of acquiring by assignment and shall apply to

lawyers, with respect to the property and rights which may be the

object of any litigation in which they may take part by virtue of their

profession".

Ruling:

The prohibition regarding the purchase of the subject property

under article 1491 only applies to property under litigation. By

under litigation, we mean literally that there is still a case pending.

By the time Judge Asuncion had acquired the property, there has

been a long time had already transpired, there was no appeal filed

or perfected in due course, In short, it was already final and

executor. Note that his decision was made in 1963, while he

purchased the land in 1965. Hence, it was no longer subject of

litigation. The subsequent case filed to annul the partition on 1968

did not change the character of the property and the fact that, by

then, it was already owned by Asuncion. Hence, there was no

violation. Further, the property was purchased not from the parties

in litigation, but from an innocent third party afterwards (Galapon).

, the Court did say it was improper (not illegal) for the

judge to purchase a property previously subject to his judicial



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decision, because judges should avoid the appearance of

impropriety. Nevertheless, as to the charges of possessing

prohibited interest, the Court took notice of the fact that a few days

after the incorporation of Traders, the Asuncions sold their share,

implies that they were aware of the appearance of impropriety. This

is according to Canon 25, Canons of Judicial Ethics.

"A judge should abstain from making personal investments in

enterprises which are apt to be involved in litigation in his court;

and, after his accession to the bench, he should not retain such

investments previously made, longer than a period sufficient to

enable him to dispose of them without serious loss. It is desirable

that he should, so far as reasonably possible, refrain from all

relations which would normally tend to arouse the suspicion that

such relations warp or bias his judgment, or prevent his impartial

attitude of mind in the administration of his judicial duties. . . ."

Judge Asuncin was Aquitted

Also, he got promoted to Court of Appeals Justice in the end.

DOMINGO D.RUBIAS vs. ISAIAS BATILLER

FACTS:

On August 31, 1964, plaintiff Domingo D. Rubias filed a suit

to recover the ownership and possession of certain portions of lot

under Psu-99791 located in Barrio General Luna, Barotac Viejo,

Iloilo which he bought from his father-in-law, Francisco Militante in

1956 against its present occupant defendant, Isaias Batiller,

Before the war, Militante claimed ownership of a parcel of

land located in the Barrio of General Luna, municipality of Barotac

Viejo province of Iloilo, which he caused to be surveyed on,

whereby he was issued a plan Psu-99791. During the war, the

record of the case was lost before it was heard, so Militante

petitioned to reconstitute the case. The CFI of Iloilo dismissed his

application. Militante appealed to the CA. Pending appeal, Militante

sold the land to plaintiff. However, the CA affirmed the CFIs

decision dismissing Militantes application for registration.

ISSUES:

1. WON the contract of sale between appellant and his father-

in-law, the late Francisco Militante over the property

subject of Plan Psu-99791 was void because it was made

when plaintiff was counsel of his father-in-law in a land

registration case involving the property in dispute (relevant

to Sales)

HELD:

1. Yes. Plaintiff lacks cause of action that calls for the dismissal

of the complaint. No right or title was passed on/sold by

Militante to plaintiff because Militantes application for

registration was dismissed. Also, even assuming that

Militante had the right to sell to plaintiff, their deed of

sale/contract is null and void according to the Civil Code:

Art. 1409. The following contracts are inexistent and void from the

beginning: xxx

(7) Those expressly prohibited by law.



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ART. 1491. The following persons cannot acquire any purchase,

even at a public auction, either in person of through the mediation

of another: xxx

(5) Justices, judges, prosecuting attorneys, clerks of superior and

inferior courts, and other officers and employees connected with the

administration of justice, the property and rights of in litigation or



includes the act of acquiring an assignment and shall apply to



profession.

DAROY V ABECIA Nature: Complaint for malpractice filed by Regalado Daroy (now

deceased) against Atty. Esteban Abecia, a member of the Bar.

Facts:

Abecia was the counsel for Daroy in a forcible entry case. He

hired Abecia as his lawyer and won. To satisfy the award for

damages, a parcel of land of the defendant was sold to Daroy at an

execution sale. . Upon failure of the defendants to redeem the land,

its ownership was consolidated in complainant Daroy. The land was

then sold to Daroys relative, who then sold it to Abecias wife.

Complainant Daroy claimed that respondent Abecia forged his

signature in a deed of absolute sale, dated March 31, 1971,

transferring the subject parcel of land to Jose Gangay purportedly

for the sum of P1,250.00 and that in a fictitious deed of absolute

sale, dated April 17, 1971, it was made to appear that Gangay in

turn conveyed the land to Nena Abecia, wife of respondent Abecia,

for the sum of P1,350.00. Two weeks thereafter, under date of April

17, 1971, the said Jose Gangay executed a Deed of Sale of the same

property in favor of Mrs. Nena Abecia, the wife of the respondent,

by virtue of which TCT No. T-15926 was issued in the name of Nena

Abecia, married to Atty. Esteban Abecia, the respondent.

Sometime in the year 1984, the complainant discovered

that his said property was already in the name of Mrs. Nena Abecia

and Atty. Esteban Abecia.

He now claims that these sales are void because Abecia

forged his signature on the deeds of sale. IBP disbarred Abecia.

Issue:

1. Did the IBP erred in dismissing Abecia?

2. Is the sale of the property void?

Held:

1. The IBP erred in dismissing Abecia. (see reason in no. 2)

2. Daroy had knowledge of the sale. Complainant very well

knew of the execution of the deed of sale as shown in the

Sheriffs Return of Service. The evidence shows that Daroy

was a party to the sale at the time it was made and did not

discover it 9 years later as he claimed. He was not

defrauded. The parties thought that because the land had

been acquired at a public sale to satisfy a judgment in a case

in which respondent was complainants counsel, the latter

could not acquire the land. The parties made this



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arrangement to circumvent Art. 1491 of the Civil Code

which prevents lawyers from acquiring property and rights

that may be the object of any litigation in which they may

take by virtue of their profession.

ART. 1491. The following persons cannot acquire by purchase, even

at a public or judicial auction, either in person or through the

mediation of another:

. . . .

(5) Justices, judges, prosecuting attorneys, clerks of superior and

inferior courts, and other officers and employees connected with

the administration of justice, the property and rights in litigation or



includes the act of acquiring by assignment and shall apply to



profession.

The prohibition in Art. 1491 does not apply to the sale of a

parcel of land acquired by a client to satisfy a judgment in his favor,

to his attorney was not the subject of the litigation.

While judges, prosecuting attorneys, and others connected

with the administration of justice are prohibited from acquiring

property or rights in litigation or levied upon in execution the

prohibition with respect to attorneys in the case extends only to

property and rights that may be the object of any litigation in

which they may take part by virtue of their profession.

Chapter 3: Subject Matter of a Contract of Sale

SIBAL Vs VALDEZ

Facts:

On 1923, Macondray & Co., Inc. bought 8 parcels of land at

the auction held by the sheriff of the Province of Tarlac. On the

same year, Leon Sibal, the judgment debtor, paid Macondray

2000php as the redemption price of said parcels of land, without

specifying the particular parcels to which it was to apply.

On 1924, Emilio J. Valdez bought parcels of land, where the

sugar cane in question is planted, at the auction held by the sheriff

of Province of Tarlac. He bought all of Macondray's rights and

interest in the eight parcels of land it acquired. He also paid

Macondray another 2000php for the redemption price Sibal paid.

Sibal alleged two causes of action (1) that Valdez has

refused to accept Sibal's offer to redeem the sugar cane the latter

planted and (2) that Valdez has harvested and attempted to further

harvest palay that belongs to Sibal. So Sibal prayed for a writ of

injuction against Valdez to prevent the latter from possessing the

subject property and from further possessing or harvesting the

sugar cane and palay in said parcels of land. He also prayed to order

Valdez to consent with the redemption of the sugar cane. However,

Valdez argued that the sugar cane is his personal property and

cannot be subject to redemption.

Issue:



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WON the sugar cane in question is a personal property?

WON the sugar cane in question is subject to sale?

Held:

Yes, sugar cane is classified under personal property so it

cannot be subject of redemption. Art. 334 of the Civil Code provides

that trees, plants, and ungathered products, while they are annexed

to the land are real property. However, it has been modified by the

Code of Civil Procedure and by Act No. 1508, in the sense that, for

the purpose of attachment and execution, and for the purposes of

the Chattel Mortgage Law, "ungathered products" have the nature

of personal property.

Yes, a man may sell something which he potentially but not

actually possesses. It is valid to sell a thing, which though not yet

actually in existence, is reasonably certain to come into existence as

the natural increment or usual incident of something already in

existence, provided that the thing can be specified and identified.

The thing sold must also belong to the vendor to begin with. The

buyer's title to the thing will vest upon its existence. Moreover,

crops, whether growing or standing in the field ready to be

harvested, when produced by annual cultivation, are not part of the

realty. They can be sold.

Note:

The immovability of growing crops are "only in abstracto and

without reference to rights on or to the crop acquired by others

than the owners of the property to which the crop is attached" but

jurisprudence recognizes the possible mobilization of the growing

crop." [point is crops can be immovable first but then they mature

and become movable. Yan pagkagets ko]

SC decided that since the Sibal, in good faith, planted the palay in

said parcels he is entitled to half of it.

PICHEL V. ALONZO Facts:

Prudencio Alonzo was awarded a parcel of land by the

PHHC. He leased it to Sua. The board of liquidators cancelled the

award to Alonzo on Jan 27, 1965 because the land was leased to

someone, which is not allowed by RA 477. It was later reinstated in

1972. Alonzo executed a deed of sale for the coconut fruits (from

Sept 15, 1968 to Jan 1, 1976) of the parcel of land awarded to him

by PHHC by reason of RA 477. He executed this in favor of Luis

Pichel in exchange for payment amounting to 4,200.00.

According to RA 477, the grantee is prohibited to sell, lease

or encumber the land and the improvements therein within 10

years from the issuance of the title, if he does, the transfer shall be

considered null and void. The trial court held that the deed of sale

was a contract of lease of the land itself and that it is null and void

by virtue of RA 477. It ordered Alonzo to pay back the 4,200 that

Pichel paid.

Issue:



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1. WON Alonzo has the right to execute such deed of sale

considering that the award was, at the time, cancelled by the Board

of Liquidators

2. WON the Deed of sale is the prohibited encumbrance

contemplated in RA 477

Held:

1. Yes. Cancellation of the award granted pursuant to RA 477 does

not automatically divest the awardee of his rights to the land. No

immediate reversion to the state. There should be an appropriate

proceeding for reversion.

2. No.

a. The terms of the contract are controlling when there is no

ambiguity. No need to resort to statutory construction.

b. It is for the SALE of the FRUITS of the land and not lease of the

land. The subject matter of the sale is the fruits of the land.

Possession and use of Fruits is different from possession and use of

land. Different rights. The first one is of the accessories, the second

of the principal. Right over the accessories does not vest right over

principal. The accessory merely follows the principal and not vice

versa.

c. A valid sale may be made of a thing, which, though not yet in

existence, is reasonably certain to come into existence as natural

increment of something in existence and the title will vest on the

buyer when it comes into existence. These are called things of

potential existence.

d. A lease is where one party binds himself to give to another the

enjoyment or use of a thing for a price certain for a period which

may be definite or indefinite and a sale is one where there is

transfer of ownership upon delivery.

e. The purpose of the law is fulfilled, not violated when the fruits

are sold.

The grantee can be self sufficient and not fully reliant on the

government.

MANANSALA VS COURT OF APPEALS Facts:

1. Fidela Manansala is the registered owner of a parcel of land in

QC. She has been in possession of the land since 1955 by virtue of

conditional sale made in her favour by PHHC (now NHA). In 1960,

however, the PHHC awarded the land to the spouses Mercado who

took possession of the land also in that year.

2. Manansala was able to successfully retrieve the land from the

Mercado spouses by claiming precedence not only in actual

possession but also in the application for its purchase. In 1984,

Manansala paid the full price of the land and thereafter a deed of

sale was executed in her favour in 1985.

3. Aranez brought this action for specific performance against

Manansala to enforce a deed of sale covering the same lot entered

into by her and Manansala in 1960. The contract stipulated that the

land shall be transferred to Aranez within 30 days after full payment



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of the purchase price by Manansala to the PHHC. The deed was

notarized by Atty. Lopez who was also her counsel against the

Mercado spouses.

4. Manansala denies selling the land; alleging further that the deed

was a forgery and that her signature was secured through fraud.

She also averred that the selling of the land was void because it was

made in violation of the prohibition of the PHHC against subsequent

disposition of the land within one year after the issuance of the

title.

5. The RTC held the signature to be genuine but there was no

perfected contract since there was no intention to sell the land and

because at the time of the sale, the petitioner was not yet the

owner thereof.

6. The CA reversed the decision holding that there was meeting of

the minds between the party evidence by the signature of the

petitioner in the deed of sale which the NBI found to be genuine.

Further, the CA held that the sale was valid in accordance with ART

1461of the Civil Code which provides that things having potential

existence may be the object of a contract of sale.

Issues:

1. W/N the CA erred in validating a contract in violation of law and

public policy?

2. W/N the challenged notarial document, apart from being

contrary to law and public policy, does not serve the presumption of

regularity?

Held:

1. No, there was no evidence that the sale of the lot was made in

violation of any rules of the PHHC. Further, this contention although

raised in the trial court was not pursued by Manansala. In her

appeal to the CA, she also never argued this point as she simply

considered the issues raised by the RTC. Hence this point is

considered waived and cant be urged as a ground to reverse the

decision of the CA. (Conclusion of fact by a trial judge --- as affirmed

by the CA--- is conclusive upon the SC.)

2. The signature was found out to be genuine as per the report of

the NBI. Further,

Manasalas claim that her signature on the deed had been procured

through fraud is contradicted by her allegation that the signature on

the deed was not hers.

Pio Sian Melliza vs. City of Iloilo, University of the Philippines

and the Court of Appeals (1968) FACTS:

Juliana Melliza owned Lot 2, Lot 5 and Lot 1214. She

donated a part of Lot 1214 to the Municipality of Iloilo to serve as

the municipal hall. The donation was revoked by the parties since

the area donated was found inadequate to meet the requirements

of the municipality development plan called the Arellano Plan.



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Lot 1214 was divided by into several lots, namely: 1214-A, 1214-B,

1214-C and 1214-D. (See illustration below for reference)

Juliana executed an instrument which states that she

assigns and transfers certain parts of Lot 1214 to the Municipal Govt

of Iloilo. Juliana sold her remaining interest in Lot 1214 to Remedios

Sian Villanueva who in turn transferred her rights to said portion of

land to petitioner Pio Sian Melliza. The City of Iloilo donated the city

hall site together with the building thereon to UP Iloilo, which

consisted of Lots Nos 1214-B, 1214-C and 1214-D. Pio Sian Melliza

asked city authorities for payment of value of Lot 1214-B. No

recovery was obtained because the City did not have funds. Pio Sian

Melliza filed in the CFI of Manila an action for recovery of Lot 1214-

B or its value against Iloilo City and UP.

Defendants answered claiming that Lot 1214-B was included

in the public instrument executed by Juliana Melliza in favor of Iloilo

municipality. Pio Sian Melliza claims that the public instrument is

clear that only 1214-C and 1214-D is included and that the 2nd

paragraph of said instrument was only to better identify the lots

sold. Petitioner further claims that to hold that 1214-B is included in

the sale would render the contract invalid because the law requires

as an essential element of sale a determinate object.

CFI: dismissed the complaint, saying that instrument by Juliana

included Lot 1214-B.

CA: affirmed CFI decision, and that the portion sold by Juliana

necessarily included whatever was needed for construction of

avenues, parks, city hall site.

ISSUES:

1. W/N the conveyance by Juliana Melliza to Iloilo municipality

included Lot 1214-B

2. W/N the description of other lots in the 2nd paragraph of the

instrument would be legally insufficient, because the object would

not be determinate as required by law (SALES issue)

HELD:

1. YES. Accdg to the SC, the public instrument describes four parcels

of land, Lot 2, Lot 5, Lot 1214-C and Lot 1214-

D and further describes not only those but also lots needed for the

construction of the city hall site, avenues, parks, according to the

Arellano Plan. If the parties merely intended to cover the specified

lots, there would have been no need for the 2nd paragraph which

describes other portions of land contiguous to the four lots needed

for the said Arellano Plan.

2. NO. The requirement of the law that a sale must have for its

object a determinate thing, is fulfilled as long as, at the time the

contract is entered into, the object of the sale is capable of being

made determinate without the necessity of a new or further

agreement between the parties. (Art 1460 NCC.) The specific

mention of some lots plus the statement that the lots object of the

sale are the ones needed for the Arellano Plan sufficiently provides

a basis, as of the time of the execution of the contract, for rendering

determinate said lots without the need of a new and further

agreement of the parties.



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The SC also noted that Pio Sian Melliza is the notary public of the

public instrument executed by Juliana. As such, he was aware of its

terms. Said instrument was also registered with the Register of

Deeds and such registration was annotated at the back of the Title

Certificate of Juliana. From these facts, Pio Sian Melliza knew of the

terms or is chargeable with knowledge of them and should have

raised the proper objections with Iloilo City and UPs possession of

Lot 1214-B. He is barred by the principles of civil law, as well as

laches, estoppel and equity.Lot 1214

Lot 1214 A

Lot 1214 B

Lot 1214- B

Lot 1214-C

Lot 1214-D

NOTE: Sorry the digest is long. Kailangan specific sa lot numbers eh.

**For reference, this is how Lot 1214 was divided:

Atilano vs. Atilano (M

Documents

Sales Digests Block 2b 2016