Fule vs Ca

GREGORIO FULE,
vs
COURT OF APPEALS, NINEVETCH CRUZ
and JUAN BELARMINO
[G.R. No. 112212 March 2, 1998; Third
Division]
ROMERO, J.:
FACTS
Gregorio Fule (petitioner), a banker by
profession and a jeweler at the same time,
acquired a 10-hectare property in Tanay, Rizal
(Tanay property).
Petitioner, as corporate secretary of the bank,
asked Remelia Dichoso and Oliva Mendoza to
look for a buyer who might be interested in the
Tanay property. The two found Dr. Ninevetch
Cruz (private respondent).
It so happens that at that time petitioner had
shown interest in buying a pair of emerald-cut
diamond earrings owned by Dr. Cruz which he
had seen when his mother examined and
appraised them as genuine. Petitioner then
made a bid to buy them but Dr. Cruz declined
the offer. At that point former inspected said
jewelry at the lobby of the Prudential Bank
branch in San Pablo City and then made a
sketch thereof. Having sketched the jewelry then
gave them back to Dr. Cruz.
Subsequently, negotiations for the barter of the
jewelry and the Tanay property ensued. When
Dr. Cruz had later agreed to the proposal,
petitioner went to Prudential Bank once again to
take a look at the jewelry.
In the afternoon of October 23, 1984, petitioner
met Atty. Belarmino (Dr. Cruzs lawyer) at the
latter's residence to prepare the documents of
sale. The Attorney accordingly caused the
preparation of a deed of absolute sale while
petitioner and Dr. Cruz attended to the
safekeeping of the jewelry.
The following day, petitioner, together with
Dichoso and Mendoza, arrived at the residence
of Atty. Belarmino to finally execute a deed of
absolute sale.
Petitioner signed the deed. Since the jewelry
was appraised only at P160,000.00, the parties
agreed that the balance of P40,000.00 would

just be paid later in cash.

Thereafter the petitioner headed for the bank,
arriving there at past 5:00 p.m. Dr. Cruz (who
arrived later) and the cashier then opened the
safety deposit box, the former retrieving a
cellophane bag with the jewelry inside and
handing over the same to petitioner. The latter
took the jewelry from the bag, went near the
electric light at the bank's lobby, held the jewelry
against the light and examined it for ten to fifteen
minutes. After a while, Dr. Cruz asked, "Okay na
ba iyan?" Petitioner expressed his satisfaction
by nodding his head.
Later, at about 8:00 o'clock in the evening of the
same day, petitioner arrived at the residence of
Atty. Belarmino complaining that the jewelry
given to him was fake. He then used a tester to
prove the alleged fakery.
On October 26, 1984, petitioner filed a complaint
before the Regional Trial Court (RTC) against
private respondents praying, among other
things, that the contract of sale over the Tanay
property be declared null and void on the ground
of fraud and deceit.
RTC, as affirmed by the Court of Appeals, held
the earrings uses as consideration for the sale
was delivered by Dr. Cruz to the petitioner as
genuine.
Hence this petition.
ISSUE
Whether or not the deed of sale of the Tanay
property is null and void.
RULING
PETITION DENIED. The contract of barter or
sale is valid.
The Civil Code provides that contracts are
perfected by mere consent. From this moment,
the parties are bound not only to the fulfillment
of what has been expressly stipulated but also to
all the consequences which, according to their
nature, may be in keeping with good faith, usage
and law. A contract of sale is perfected at the
moment there is a meeting of the minds upon
the thing which is the object of the contract and
upon the price. Being consensual, a contract of
sale has the force of law between the
contracting parties and they are expected to
abide in good faith by their respective
contractual commitments. Article 1358 of the
Civil Code which requires the embodiment of
certain contracts in a public instrument, is only
for convenience, and registration of the
instrument only adversely affects third parties.
Formal requirements are, therefore, for the

benefit of third parties. Non-compliance

therewith does not adversely affect the validity of
the contract nor the contractual rights and
obligations of the parties thereunder.
It is evident from the facts of the case that there
was a meeting of the minds between petitioner
and Dr. Cruz. As such, they are bound by the
contract unless there are reasons or
circumstances that warrant its nullification.
Hence, the problem that should be addressed in
this case is whether or not under the facts duly
established herein, the contract can be voided in
accordance with law so as to compel the parties
to restore to each other the things that have
been the subject of the contract with their fruits,
and the price with interest.
Contracts that are voidable or annullable, even
though there may have been no damage to the
contracting parties are: (1) those where one of
the parties is incapable of giving consent to a
contract; and (2) those where the consent is
vitiated by mistake, violence, intimidation, undue
influence or fraud. Accordingly, petitioner now
stresses before this Court that he entered into
the contract in the belief that the pair of emeraldcut
diamond earrings was genuine. On the
pretext that those pieces of jewelry turned out to
be counterfeit, however, petitioner subsequently
sought the nullification of said contract on the
ground that it was, in fact, "tainted with fraud"
such that his consent was vitiated.
There is fraud when, through the insidious words
or machinations of one of the contracting
parties, the other is induced to enter into a
contract which, without them, he would not have
agreed to. The records, however, are bare of
any evidence manifesting that private
respondents employed such insidious words or
machinations to entice petitioner into entering
the contract of barter. Neither is there any
evidence showing that Dr. Cruz induced
petitioner to sell his Tanay property or that she
cajoled him to take the earrings in exchange for
said property. On the contrary, Dr. Cruz did not
initially accede to petitioner's proposal to buy the
said jewelry. Rather, it appears that it was
petitioner, through his agents, who led Dr. Cruz
to believe that the Tanay property was worth
exchanging for her jewelry as he represented
that its value was P400,000.00 or more than
double that of the jewelry which was valued only
at P160,000.00. If indeed petitioner's property
was truly worth that much, it was certainly
contrary to the nature of a businessman-banker
like him to have parted with his real estate for

half its price. In short, it was in fact petitioner

who resorted to machinations to convince Dr.
Cruz to exchange her jewelry for the Tanay
property.
Moreover, petitioner did not clearly allege
mistake as a ground for nullification of the
contract of sale. Even assuming that he did,
petitioner cannot successfully invoke the same.
To invalidate a contract, mistake must "refer to
the substance of the thing that is the object of
the contract, or to those conditions which have
principally moved one or both parties to enter
into the contract." An example of mistake as to
the object of the contract is the substitution of a
specific thing contemplated by the parties with
another. In his allegations in the complaint,
petitioner insinuated that an inferior one or one
that had only Russian diamonds was substituted
for the jewelry he wanted to exchange with his
10-hectare land. He, however, failed to prove
the fact that prior to the delivery of the jewelry to
him, private respondents endeavored to make
such substitution.
Likewise, the facts as proven do not support the
allegation that petitioner himself could be
excused for the "mistake." On account of his
work as a banker-jeweler, it can be rightfully
assumed that he was an expert on matters
regarding gems. He had the intellectual capacity
and the business acumen as a banker to take
precautionary measures to avert such a mistake,
considering the value of both the jewelry and his
land. The fact that he had seen the jewelry
before October 24, 1984 should not have
precluded him from having its genuineness
tested in the presence of Dr. Cruz. Had he done
so, he could have avoided the present situation
that he himself brought about. Indeed, the finger
of suspicion of switching the genuine jewelry for
a fake inevitably points to him. Such a mistake
caused by manifest negligence cannot invalidate
a juridical act. As the Civil Code provides,
"(t)here is no mistake if the party alleging it knew
the doubt, contingency or risk affecting the
object of the contract."
Furthermore, petitioner was afforded the
reasonable opportunity required in Article 1584
of the Civil Code within which to examine the
jewelry as he in fact accepted them when asked
by Dr. Cruz if he was satisfied with the same. 29
By taking the jewelry outside the bank, petitioner
executed an act which was more consistent with
his exercise of ownership over it. This gains
credence when it is borne in mind that he

himself had earlier delivered the Tanay property

to Dr. Cruz by affixing his signature to the
contract of sale. That after two hours he later
claimed that the jewelry was not the one he
intended in exchange for his Tanay property,
could not sever the juridical tie that now bound
him and Dr. Cruz. The nature and value of the
thing he had taken preclude its return after that
supervening period within which anything could
have happened, not excluding the alteration of
the jewelry or its being switched with an inferior
kind.
Both the trial and appellate courts, therefore,
correctly ruled that there were no legal bases for
the nullification of the contract of sale.
Ownership over the parcel of land and the pair
of emerald-cut diamond earrings had been
transferred to Dr. Cruz and petitioner,
respectively, upon the actual and constructive
delivery thereof. Said contract of sale being
absolute in nature, title passed to the vendee
upon delivery of the thing sold since there was
no stipulation in the contract that title to the
property sold has been reserved in the seller
until full payment of the price or that the vendor
has the right to unilaterally resolve the contract
the moment the buyer fails to pay within a fixed
period. Such stipulations are not manifest in the
contract of sale.
While it is true that t

EARNEST MONEY
VILLONCO vs. BORMACHECO (1975)
Unqualified acceptance, even if it contained request for changes; receipt of earnest money
Francisco N. Cervantes and his wife, Rosario P. Navarra-Cervantes, are the owners of 3 lots in
Buendia. Makati with a total area of 3,500 sq. m and were titled. The lots were mortgaged to the Development
Bank of the Phil (DBP) as security for a loan of P441,000. The mortgage debt was fully paid on July 10, 1969.
Cervantes is the president of Bormaheco, Inc., a dealer and importer of industrial and agricultural machinery.
The entire lots are occupied by the building, machinery and equipment of Bormaheco, Inc. and are adjacent to
the property of Villonco Realty Company.
Negotiations for the sale of the said lots pursued through the intervention of Editha
Perez as real estate broker. Bormaheco, Inc., through Cervantes, made a written offer dated February 12,
1964, to Romeo Villonco for the sale of the property. The written offer mentioned the ff:
1. That a deposit of P100,000.00 must be placed as earnest money on the
purchase of the above property which will become part payment of the property in the event that the sale is
consummated; 2.That this sale is to be consummated only after I shall have also
consummated my purchase of another property located at Sta. Ana, Manila;
3. That if my negotiations with said property will not be
consummated by reason beyond my control, I will return to you your deposit of P100,000 and the sale of my
property to you will not also be consummated; and 4.That final negotiations on both properties can
be definitely known after 45 days.
The property mentioned in the letter was the
land of the National Shipyards & Steel Corporation (Nassco), located at Punta, Sta. Ana, Manila. At the bidding,
that land was awarded to Bormaheco, Inc., the highest bidder, for the price of P552,000. The Nassco Board of
Directors in its resolution of February 18, 1964 authorized the General Manager to sign the necessary contract.

Villonco Realty Company, through

Teofilo Villonco, in its letter made a revised counter- offer for the purchase of the property. The counter-offer
was accepted by Cervantes which was in a way a reiteration only of Cervantes letter.
The check for P100,000 was
delivered by Edith Perez de Tagle to Bormaheco, Inc. and was received by Cervantes. In the voucher-receipt
evidencing the delivery the broker indicated in her handwriting that the earnest money was "subject to the
terms and conditions embodied in Bormaheco's letter". Then, unexpectedly,
or 26 days after the signing of the contract of sale, Cervantes returned the earnest money, with interest.
Cervantes cited as an excuse the circumstance that "despite the lapse of 45 days from February 12, 1964
there is no certainty yet" for the acquisition of the Punta property. Villonco Realty Company refused to accept
the letter and the checks of Bormaheco, Inc. Cervantes sent them by registered mail. When he rescinded the
contract, he was already aware that the Punta lot had been awarded to Bormaheco, Inc. Villonco filed
a complaint and a notice of lis pendens was annotated at the back of the title of the lands. Bormacheco
pleaded the defense that no perfection of sale occured. LC:
in favor of petitioner spouses
Issue: w/n there was a perfected contract of sale
Held: YES
1. There was meeting of the minds upon the matter and consideration of the sale. Bormachecos
acceptance of the part of the payment of 100k shows that the sale was conditionally consummated.
The non-consummation of that purchase would be a negative resolutory condition. In fact,
Bormachecos bid for the Sta. Ana property was already accepted by Naasco.
2. The agreement between the parties has a subject matter, the price, and the mode of payment and
that part of the price was paid. Whenever earnest money is given, it shall be considered as part of the
price and proof of the perfection of the contract of sale.
3. The 45 day period was merely an estimate and did not serve as deadline. And as stated above, the
condition that Bormacheco should acquire the Sta. Ana property was fulfilled.
4. Cervantes alleged that he did not obtain the consent of his wife, the property being a conjugal one.
Court held that such is not sustainable because if he did not obtain so, such would only make the sale
voidable.
5. Under the facts of the case, it is evident that Bormacheco acted in gorss and evident bad faith in
refusing to satisfy the valid and just demand of Villonco for specific performance.
The contract of sale is perfected at the moment of the meeting of the minds upon the thing which is
the object of the contract and upon the price. From that moment, the parties may reciprocally
demand performance, subject to the provisions of the law governing the form of contracts.
Payment of earnest money was part of price and proof of perfection of contract
Concurring opinion of Barredo:
1. The actual contract between the parties is not the letter made by Cervantes but the counter-offer that
was given by Villonco.
The act of Cervantes in signing his conformity to the counter-offer resulted in a completely perfected sale

SPOUSES DOROMAL V. CA
Not clear if the money was in the concept of earnest money

DOROMAL V. CA (September 5, 1975)

FACTS:
A parcel of land in Iloilo were co-owned by 7 siblings all surnamed Horilleno. 5 of the siblings gave a SPA
to their niece Mary Jimenez, who succeeded her father as a co-owner, for the sale of the land to father
and son Doromal. One of the co-owner, herein petitioner, Filomena Javellana however did not gave her
consent to the sale even though her siblings executed a SPA for her signature. The co-owners went on
with the sale of 6/7 part of the land and a new title for the Doromals were issued.
Respondent offered to repurchase the land for 30K as stated in the deed of sale but petitioners declined
invoking lapse in time for the right of repurchase. Petitioner also contend that the 30K price was only

placed in the deed of sale to minimize payment of fees and taxes and as such, respondent should pay the
real price paid which was P115, 250.
ISSUE:
WON the period to repurchase of petitioner has already lapsed.
HELD:
Period of repurchase has not yet lapsed because the respondent was not notified of the sale. The 30-day
period for the right of repurchase starts only after actual notice not only of a perfected sale but of actual
execution and delivery of the deed of sale.
The letter sent to the respondent by the other co-owners cannot be considered as actual notice because
the letter was only to inform her of the intention to sell the property but not its actual sale. As such, the 30day period has not yet commenced and the respondent can still exercise his right to repurchase.
The respondent should also pay only the 30K stipulated in the deed of sale because a redemptioners
right is to be subrogated by the same terms and conditions stipulated in the contract.

Doromal vs. CA [G.R. No. L-36083. September 5, 1975.] En Banc, Barredo (J): 6
concurring, 2 took no part, 2 on leave Facts: Lot 3504 of the cadastral survey of
Iloilo, situated in the poblacion of La Paz, one of its districts, with an area of a little
more than 2-1/2 hectares was originally decreed in the name of the late Justice
Antonio Horilleno, in 1916, under OCT 1314. Before he died, on a date not
particularized in the record, he executed a last will and testament attesting to the
fact that it was a co-ownership between himself and his brothers and sisters. The
truth was that the owners or better stated, the co-owners were, besides Justice
Horilleno, Luis, Soledad, Fe, Rosita, Carlos and Esperanza, all surnamed Horilleno, in
the proportion of 1/7 undivided ownership each. Since Esperanza had already died,
she was succeeded by her only daughter, Filomena Javellana. Still, even though
their right had not as yet been annotated in the title, the co-owners led by Carlos,
and as to deceased Justice Antonio Horilleno, his daughter Mary, sometime since
early 1967, had wanted to sell their shares, or if possible if Filomena Javellana were
agreeable, to sell the entire property. They hired an acquaintance Cresencia Harder,
to look for buyers, and the latter came to the interest of Ramon Doromal, Sr. and Jr.
In preparation for the execution of the sale (since the brothers and sisters Horilleno
were scattered in various parts of the country: Carlos in Ilocos Sur, Mary in Baguio,
Soledad and Fe, in Mandaluyong, Rizal, and Rosita in Basilan City), the Horillenos
executed various powers of attorney in favor of their niece, Mary H. Jimenez. They
also caused preparation of a power of attorney of identical tenor for signature by
Javellana, and sent it with a letter of Carlos, dated 18 January 1968 unto her thru
Mrs. Harder. Carlos informed Javellana that the price was P4.00 a square meter. It

appears, however, that as early as 22 October, 1967, Carlos had received in check
as earnest money from Ramon Doromal, Jr., the sum of P5,000.00 and the price
therein agreed upon was P5.00 a square meter. At any rate, Javellana, not being
agreeable, did not sign the power of attorney, and the rest of the co-owners went
ahead with their sale of their 6/7. Carlos saw to it that the deed of sale prepared by
their common attorney in fact, Mary H. Jimenez, be signed and ratified. The Deed
was signed and ratified in Candon, Ilocos Sur, on 15 January 1968, and was brought
to Iloilo by Carlos in the same month. The Register of Deeds of Iloilo refused to
register right away, since the original registered owner, Justice Antonio Horilleno
was already dead. Carlos had to hire Atty. Teotimo Arandela to file a petition within
the cadastral case, on 26 February 1968, for the purpose. After which, Carlos
returned to Luzon. After compliance with the requisites of publication, hearing and
notice, the petition was approved. On 29 April 1968, Carlos (in Iloilo) went to the
Register of Deeds and caused the registration of the order of the cadastral court
approving the issuance of a new title in the name of the co-owners, as well as of the
deed of sale to the Doromals, as a result of which on that same date, a new title
was issued TCT 23152, in the name of the Horillenos to 6/7 and Javellana to 1/7,
Exh. D, only to be cancelled on the same day under TCT 23153, , already in the
names of the vendees Doromals for 6/7 and to Javellana, 1/7. On 30 April 1968, the
Doromals paid Carlos the sum of P97,000.00 by a check of the Chartered Bank
which was later substituted by check of PNB, because there was no Chartered Bank
Branch in Ilocos Sur. Besides the amount paid in check, the Doromals according to
their evidence still paid an additional amount in cash of P18,250.00 since the
agreed price was P5.00 a square meter; and thus was consummated the
transaction. On 10 June 1968, Atty. Arturo H. Villanueva (Javellanas lawyer) arrived
at the residence of the Doromals in Dumangas, Iloilo, bringing with him her letter of
that date, making a formal offer to repurchase or redeem the 6/7 undivided share in
Lot No. 3504, of the Iloilo Cadastre, which the Doromals bought from her erstwhile
co-owners, the Horillenos, for the sum of P30,000.00 (the sum Atty. Villanueva has
with him which he would deliver to the Doromals as soon as they execute the
contract of sale in her favor). The Doromals refused. On 11 June, 1968, Javellana
filed the case before the CFI Iloilo seeking to exercise her right to redeem the share
of the property, as co-owner, at the price stated in the deed of sale, i.e. P30,000.00.
The trial judge, after hearing the evidence, ruled in favor of the Doromals, holding
that Javellana had no more right, to redeem as she was already informed of the
intended sale of the 6/7 share belonging to the Horillenos, and further condemned
Javellana to pay attorneys fees, and moral and exemplary damages. Javellana
appealed. Sales, 2003 ( 90 ) Haystacks (Berne Guerrero) The Court of Appeals (in
CA-GR 47945-R) reversed the trial courts decision and held that although
respondent Javellana was informed of her co-owners proposal to sell the land in
question to the Doromals she was, however, never notified least of all, in writing,
of the actual execution and registration of the corresponding deed of sale, hence,
Javellana s right to redeem had not yet expired at the time she made her offer for
that purpose thru her letter of 10 June 1968 delivered to the Doromals on even

date. The intermediate court further held that the redemption price to be paid by
Javellana should be that stated in the deed of sale which is P30,000 notwithstanding
that the preponderance of the evidence proves that the actual price paid by the
Doromals was P115,250. The Doromals appealed. The Supreme Court affirmed the
decision of the Court of Appeals, with costs against Spouses Doromal Sr. and
Doromal Jr. 1. Right of pre-emption or redemption Article 1623 of the Civil Code
which provides that The right of legal pre-emption or redemption shall not be
exercised except within thirty days from the notice in writing by the prospective
vendor, or by the vendor, as the case may be. The deed of sale shall not be
recorded in the Registry of Property, unless accompanied by an affidavit of the
vendor that he has given written notice thereof to all possible redemptioners. The
right of redemption of co-owners excludes that of adjoining owners. 2. Carlos
letters do not constitute notice for the computation of the 30-day period in Article
1623; Alleged letters do not refer to a consummated sale The letters sent by Carlos
Horilleno to Filomena Javellana (dated 18 January 1968 and 5 November 1967) do
not constitute the required notice in writing from which the 30-day period fixed in
said provision should be computed. There is no showing that said letters were in
fact received by Javellana and when they were actually received. In any event,
neither of said letters referred to a consummated sale. It was Carlos Horilleno alone
who signed them, and as of 18 January 1968, powers of attorney from the various
co-owners were still to be secured. Indeed, the later letter of 18 January 1968
mentioned that the price was P4.00/sq.m. whereas in the earlier letter of 5
November 1967 it was P5.00. In fact, as early as 21 October 1967, Carlos had
already received P5,000 from the Doromals supposedly as earnest money, of which,
however, mention was made by him to his niece only in the later letter of 18
January 1968, the explanation being that at later negotiation it was increased to
P5.00/sq.m. 3. Sale not yet perfected during the time of the sending of letters;
Earnest

money was made as understood under

the Old Civil Code While the letters relied upon by
the Doromals could convey the idea that more or
less some kind of consensus had been arrived at
among the other co-owners to sell the property in
dispute to the Doromals, it cannot be said
definitely that such a sale had even been actually
perfected. The difference in the prices per square
meter in the two letters negatives the possibility
that a price definite had already been agreed
upon. While P5,000 might have indeed been paid

to Carlos in October 1967, there is nothing to show

that the same was in the concept of the earnest
money contemplated in Article 1482 of the Civil
Code as signifying perfection of the sale. Viewed in
the backdrop of the factual milieu thereof extant in
the record, said P5,000 were paid in the concept of
earnest money as the term was understood under
the Old Civil Code, that is, as a guarantee that the
buyer would not back out, considering that it is not
clear that there was already a definite agreement
as to the price then and that the Doromals were
decided to buy 6/7 only of the property should
Javellana refuse to agree to part with her 1/7
share. 3. Right of redemption; Requirement of notice, must be in a public
instrument (Article 1620 and 1623) For purposes of the co-owners right of
redemption granted by Article 1620 of the Civil Code, the notice in writing which
Article 1623 requires to be made to the other co-owners and from receipt of which
the Sales, 2003 ( 91 ) Haystacks (Berne Guerrero) 30-day period to redeem should
be counted is a notice not only of a perfected sale but of the actual execution and
delivery of the deed of sale. This is implied from the latter portion of Article 1623
which requires that before a register of deeds can record a sale by a co-owner,
there must be presented to him, an affidavit to the effect that the notice of the sale
had been sent in writing to the other co-owners. A sale may not be presented to the
register of deeds for registration unless it be in the form of a duly executed public
instrument. Moreover, the law prefers that all the terms and conditions of the sale
should be definite and in writing. 4. Co-owners right of redemption (Article 1619)
Article 1619 of the Civil Code bestows unto a co-owner the right to redeem and to
be subrogated under the same terms and conditions stipulated in the contract, and
to avoid any controversy as to the terms and conditions under which the right to
redeem may be exercised, it is best that the period therefor should not be deemed
to have commenced unless the notice of the disposition is made after the formal
deed of disposal has been duly executed. 5. Javellana not notified in writing
Javellana has never been notified in writing of the execution of the deed of sale by
which the Doromals acquired the subject property, it necessarily follows that her
tender to redeem the same made on 10 June 1968 was well within the period
prescribed by law. Indeed, it is immaterial when she might have actually come to
know about said deed, it appearing she has never been shown a copy thereof

through a written communication by either any of the Doromals or any of the

Horillenos. (Cf. Cornejo et al. vs. CA et al., 16 SCRA 775.) 6. Tax evasion must be
condemned It is impossible for the Supreme Court to sanction the Doromals
pragmatic but immoral posture. Being patently violative of public policy and
injurious to public interest, the seemingly wide practice of understating
considerations of transactions for the purpose of evading taxes and fees due to the
government must be condemned and all parties guilty thereof must be made to
suffer the consequences of their ill-advised agreement to defraud the state. The
trial court fell short of its devotion and loyalty to the Republic in officially giving its
stamp of approval to the stand of the Doromals and even berating Javellana as
wanting to enrich herself at the expense of her own blood relatives who are her
aunts, uncles and cousins. On the contrary, said blood relatives should have
been sternly told that they are in pari-delicto with the Doromals in committing tax
evasion and should not receive any consideration from any court in respect to the
money paid for the sale in dispute. Their situation is similar to that of parties to an
illegal contract. 7. Consideration is P30,000 The consideration of P30,000 only was
placed in the deed of sale to minimize the payment of the registration fees, stamps
and sales tax. The redemption in controversy should be only for the price stipulated
in the deed, regardless of what might have been actually paid by the Doromals. 8.
Article 1619: Legal redemption as the right to be subrogated Legal redemption is
the right to be subrogated, upon the same terms and conditions stipulated in the
contract, in the place of one who acquires a thing by purchase or dation in payment,
or by any other transaction whereby ownership is transmitted by onerous title. In
the present case, the stipulation in the public evidence of the contract, made public
by both vendors and vendees is that the price was P30,000.00. 9. Article 1620
and 1623; Reasonable price A co-owner of a thing may exercise the right
of redemption in case the share of all the other coowners or any of them, are
sold to a third person. If the price of the alienation is grossly excessive, the
redemptioner shall pay only a reasonable one. The law seeks to protect
redemptioner and converts his position into one not that of a contractually but of a
legally subrogated creditor as to the right of redemption, if the price is not grossly
excessive, what the law had intended redemptioner to pay can be read in Art.
1623, Sales, 2003 ( 92 ) Haystacks (Berne Guerrero) which provides that The right
of a legal pre-emption or redemption shall not be exercised except within thirty (30)
days from the notice in writing by the prospective vendor, or by the vendor as the
case may be. The deed of sale shall not be recorded in the Registry of Property,
unless accompanied by an affidavit of the vendor that he has given written notice
thereof of all possible redemptioners. 10. Affidavits intended for a definitive
purpose Affidavit must have been intended by the lawmakers for a definite purpose,
to argue that this affidavit has no purpose is to go against all canons of statutory
construction. No law mandatory in character and worse, prohibitive should be
understood to have no purpose at all. That would be an absurdity. Purpose could not
but have been to give a clear and unmistakable guide to redemptioner, on how
much he should pay and when he should redeem. Notice must have been intended

to state the truth and if vendor and vendee should have instead, decided to state an
untruth therein, it is they who should bear the consequences of having thereby
misled the redemptioner who had the right to rely and act thereon and on nothing
else. 11. Equitable estoppel Stated otherwise, all the elements of equitable estoppel
are present since the requirement of the law is to submit the affidavit of notice to all
possible redemptioners, that affidavit to be a condition precedent to registration of
the sale therefore. The law must have intended that it be by the parties understood
that they were there asking a solemn representation to all possible redemptioners,
who upon faith of that are thus induced to act. In the present case, the parties to
the sale sought to avoid compliance with the law and certainly refusal to comply
cannot be rewarded with exception and acceptance of the plea that they cannot be
now estopped by their own representation. 12. No unjust enrichment, as right is not
contractual but granted by law Javellanas right is not contractual, but a mere legal
one, the exercise of a right granted by the law, and the law is definite that she can
subrogate herself in place of the buyer, upon the same terms and conditions
stipulated in the contract, in the words of Art. 1619, and here the price. stipulated in
the contract was P30,000.00, in other words, if this be possible enrichment on the
part of Javellana, it was not unjust but just enrichment because permitted by the
law. 13. Exercise of right, just solution, promotion of justice What Javellana sought to
enforce is not an abuse but a mere exercise of a right. The solution is not unjust
because it only binds the parties to make good their solemn representation to
possible redemptioners on the price of the sale, to what they had solemnly averred
in a public document required by the law to be the only basis for that exercise of
redemption. This thus promote justice.

Article 1482 of the Civil Code - Earnest Money

SPOUSES SERRANO, ET. AL. v. CAGUIAT
G.R. No. 139173February 28, 2007
Sandoval-Gutierrez, J.:
FACTS:Spouses Serrano agreed to sell in favor of respondent Caguiat ap a r c e l o f
l a n d a t 1 , 5 0 0 . 0 0 p e r s q u a r e m e t e r. C a g u i a t p a r t i a l l y paid
petitioners 100, 000.00 as evide nced by a receipt issuedby petitioners
indicating therein respondents promise to pay
ther e m a i n i n g b a l a n c e . R e s p o n d e n t , a f t e r m a k i n g k n o w

n h i s readiness to pay the balance, requested from petitioners

thepreparation of the necessary Deed of Sale. When petitioner
s cancelled the transaction and intended to return to Caguiat
hisp a r t i a l p a y m e n t , r e s p o n d e n t f i l e d a c o m p l a i n t f o r s p e c i
f i c performance and damages. The trial court relying on Article 1482of the Civil Code
ruled that the payment of 100, 000.00 being an earnest money signified the
perfection of the contract of
sale. T h e C o u r t o f A p p e a l s d e n i e d p e t i t i o n
e r s m o t i o n f o r reconsideration in affirmation of the lower courts
decision.ISSUE:

W h e t h e r o r n o t t h e p a r t i a l p a y m e n t c o n s t i t u t e s a n e a r n e s t mone
y as manifested in Article 1482 of the Civil
CodeHELD:N o . A r t i c l e 1 4 8 2 a p p l i e s o n l y t o e a r n e s t m o n e y g i v e n
i n a contract of sale. It was apparent that the earnest money in the c a s e a t
b a r w a s g i v e n i n l i e u o f a c o n t r a c t t o s e l l . U n l i k e i n a contract of
sale, the ownership of the parcel of land was retainedby the Spouses Serrano and shall
only be passed to Caguiat uponfull payment of the purchase price as evidenced
by the receipt.R e l a t i v e l y, n o D e e d o f S a l e h a s b e e n e x e c u t e d a s p r o o f
o f t h e intention of the parties to immediately transfer the ownership of t h e
p a r c e l o f l a n d . S p o u s e s S e r r a n o a l s o r e t a i n e d o w n e r s h i p o f the
certificate of title of the lot, thereby indicating no actual or c o n s t r u c t i v e
d e l i v e r y o f t h e o w n e r s h i p o f t h e p r o p e r t y. F i n a l l y, should the transaction
pushed through, Caguiats payment of theremaining balance would have been a
suspensive condition sincethe transfer of ownership was subordinated to the happening
of afuture and uncertain event.
Article 1484 Remedies of a vendor in a contract of sale of a
personal property payable in installments (NotApplicable in Real
Estate Mortgage)

n April 4, 1990, petitioners, through Atty. Ruben V. Lopez, sent a letter 4 to respondent stating that
petitioner Amparo Herrera is leaving for abroad on or before April 15, 1990 and that they are
canceling the transaction. Petitioners also informed respondent that he can recover the earnest
money of P100,000.00 anytime.

Again, on April 6, 1990,5 petitioners wrote respondent stating that they delivered to his counsel
Philippine National Bank Managers Check No. 790537 dated April 6, 1990 in the amount
of P100,000.00 payable to him.
In view of the cancellation of the contract by petitioners, respondent filed with the Regional Trial
Court, Branch 63, Makati City a complaint against them for specific performance and damages,
docketed as Civil Case No. 90-1067.6
On June 27, 1994, after hearing, the trial court rendered its Decision 7 finding there was a perfected
contract of sale between the parties and ordering petitioners to execute a final deed of sale in favor
of respondent. The trial court held:
In the evaluation of the evidence presented by the parties as to the issue as to who was ready to
comply with his obligation on the verbal agreement to sell on March 23, 1990, shows that plaintiffs
position deserves more weight and credibility. First, the P100,000.00 that plaintiff paid whether as
downpayment or earnest money showed that there was already a perfected contract. Art.
1482 of the Civil Code of the Philippines, reads as follows, to wit:
Art. 1482. Whenever earnest money is given in a contract of sale, it shall be considered as
part of the price and as proof of the perfection of the contract.
Second, plaintiff was the first to react to show his eagerness to push through with the sale by
sending defendants the letter dated March 25, 1990. (Exh. D) and reiterated the same intent to
pursue the sale in a letter dated April 6, 1990. Third, plaintiff had the balance of the purchase price
ready for payment (Exh. C). Defendants mere allegation that it was plaintiff who did not appear on
March 23, 1990 is unavailing. Defendants letters (Exhs. 2 and 5) appear to be mere afterthought.
On appeal, the Court of Appeals, in its assailed Decision of January 29, 1999, affirmed the trial
courts judgment.
Forthwith, petitioners filed their motion for reconsideration but it was denied by the appellate court in
its Resolution8dated July 14, 1999.
Hence, the present recourse.
The basic issue to be resolved is whether the document entitled "Receipt for Partial
Payment" signed by both parties earlier mentioned is a contract to sell or a contract of sale.

In San Miguel Properties Philippines, Inc. v. Spouses Huang, 13 we held that the stages of a contract
of sale are: (1)negotiation, covering the period from the time the prospective contracting parties
indicate interest in the contract to the time the contract is perfected; (2) perfection, which takes place
upon the concurrence of the essential elements of the sale, which is the meeting of the minds of the
parties as to the object of the contract and upon the price; and (3) consummation, which begins

when the parties perform their respective undertakings under the contract of sale, culminating in the
extinguishment thereof.
With the above postulates as guidelines, we now proceed to determine the real nature of the
contract entered into by the parties.
It is a canon in the interpretation of contracts that the words used therein should be given their
natural and ordinary meaning unless a technical meaning was intended. 14 Thus, when petitioners
declared in the said "Receipt for Partial Payment" that they
RECEIVED FROM MR. GODOFREDO CAGUIAT THE AMOUNT OF ONE HUNDRED THOUSAND
PESOS (P100,000.00) AS PARTIAL PAYMENT OF OUR LOT SITUATED IN LAS PIAS, M.M.
COVERED BY TCT NO. T-9905 AND WITH AN AREA OF 439 SQUARE METERS.
MR. CAGUIAT PROMISED TO PAY THE BALANCE OF THE PURCHASE PRICE ON OR BEFORE
MARCH 23, 1990, AND THAT WE WILL EXECUTE AND SIGN THE FINAL DEED OF SALE ON
THIS DATE.
there can be no other interpretation than that they agreed to a conditional contract of sale,
consummation of which is subject only to the full payment of the purchase price.
A contract to sell is akin to a conditional sale where the efficacy or obligatory force of the vendor's
obligation to transfer title is subordinated to the happening of a future and uncertain event, so that if
the suspensive condition does not take place, the parties would stand as if the conditional obligation
had never existed. The suspensive condition is commonly full payment of the purchase price.15

DALION vs CA
Ruperto Sabesaje (relative of the spouses Dalion) sued to recover
ownership over a
parcel of land based on a private document of Absolute Sale that he alleged
was
executed in favor of him by the spouses.
Spouses denied the sale contending that the document was fictitious, his
signature
forged & the land is conjugal property w/c he & his wife acquired from
Saturnina
Sabaje.
Spouses also deny claims of Sebasaje that after executing the deed of sale,
they had
pleaded w/ him to be allowed to administer the land because they did not
have any
means of livelihood.

Spouses however admitted administering 5 parcels of land w/c belonged to

Sabasajes
grandfather who had already died but never received their 10% & 15%
commission
for sales of copra & abaca respectively. Sebasaje sued merely to harass,
preempt &
forestall their threat to sue for these unpaid commissions.
TC: Dalion to deliver to Sebaseje the parcel of land & to execute formal deed
of conveyance
in a public document CA: Affirmed
W/N a public document is necessary for transfer of ownership?
Dalion impugns that even assuming genuineness of his signature & of the
document,
the sale is not valid as it is embodied in private document thus, did not
convey
title/right in question. Art 1358, par.1: Acts & contracts w/c have for their
object the
creation, transmission, modification or extension of real rights over
immovable
property must appear in a public instrument
However, this necessity is only for convenience, not for validity or
enforceability. It
is not a requirement for the validity of a contract of sale of a parcel
of land that
this be embodied in a public instrument.
A contract of sale is perfected by mere consent & no required form is
required for its
validity. Parties to a perfected contract of sale have the right to reciprocally
demand
performance (Art1475), and to observe a particular form if warranted
(Art1357). A
sale of real property may be in a private instrument, but that
contract is valid &
binding between the parties upon its perfection. And a party may
compel the
other party to execute a public instrument embodying their contract
affecting
real rights once the contract appearing in a private instrument has
been
perfected.
It was correct for TC to order Dalion to deliver the land & to execute formal
deed of
conveyance in a public document. When the sale is made through a public
instrument,

the execution thereof is equivalent to the delivery of the thing (Art1498).

Delivery
may either be actual (real) or constructive. Thus, delivery may be done by
placing the
vendee in control & possession of the land (real) or by embodying the sale in
a public
instrument (constructive).
DECISION AFFIRMED.
STATUTE OF FRAUDS
Secuya vs. Vda. De Selma (2000)
FACTS:

Lot 5679 was originally sold to Caballero.

Caballero then entered into an Agreement of Partition with Sabellona, whereby the latter will receive
1/3 of the portion of the whole property (Lot 5679).
Sabellona then sold her portion to Secuya (predecessors of plaintiffs), by means of a private
document which was lost. (Sabellonas only heir admitted and confirmed said sale)
Secuya, together with his bro and sis, took possession and cultivated the land.
Superales, husband of Secuyas sister, constructed his house on the said lot, and lived their
continuously up to the present. (this was made with permission)
Later, Secuya died.

Selma, defendant-respondent, bought a portion of the whole Lot 5679; and later bought the
remaining portion.

The land in question, which was a portion of Lot 5679, is embraced and included within the boundary
of the acquired land by Selma.

Selma then filed a complaint with the Bgy. Captain asserting her ownership over the whole property.

Selma argued that she bought the whole property from Aro, to whom the property was sold to by
Caballeros heirs, as evidenced by a notarized Deed of Sale.

RTC: ruled in favor of Selma

CA: affirmed decision of RTC.
ISSUE: I. W/N there was a valid transfer of 1/3 portion of Lot 5679 by Caballero to Sebellona, by virtue of the
Agreement of Partition.
HELD: I. NO
1. The Agreement is to be considered as an express trust, not a partition.
2. In the said Agreement, Caballero held the portion specified as belonging to Sabellona when the
application of ownership (granted by Director of Lands in favor of Caballero) was eventually
approved and a sale certificate is to be issued in her name.

3.

However, Caballero never transferred the said lot to Sabellona during her lifetime. Instead, her
heirs sold it to Aro (as argued by Selma).
4. Plaintiffs did not even register the said Agreement with the Registry of Property or pay the
requisite land taxes.
5. Plaintiffs even insist that there was a sale between Sabellona and Secuya, which was embodied in
a private document.

6.

As held before, while a sale of a piece of land appearing in a private deed is binding between the
parties, it cannot be considered binding on 3rd persons, if it is not embodied in a public instrument
and recorded in the Registry of Property.
Yuvienco v. Dacuycuy

this case refers to the Sotto property in Tacloban which was offered through a letter by Yuvienco
(coursed through the attorney Gamboa) to Yao for 6.5M. Yao was given around 19 days to respond to
the offer. A telegram was sent accepting the offer, after which Gamboa wrote to Yao that he would be
arriving in Tacloban to negotiate the sale. The agreement as to payment was as such: (though not
included in the memoranda)
P2,000,000.00 to be paid in full on the date of the execution of the contract; and the balance of
P4,500,000.00 shall be fully paid within ninety (90) days thereafter;

But when Gamboa arrived Tacloban City bringing with him the prepared contract to purchase and to
sell referred to in his telegram dated July 27, 1978 for the purpose of closing the transactions,
however, to the complete surprise of plaintiffs, the defendant (except def. Tacloban City Ice Plant,
Inc.) without giving notice to plaintiffs, changed the mode of payment with respect to the

balance of P4,500,000.00 by imposing upon plaintiffs to pay same amount within thirty
(30) days from execution of the contract instead of the former term of ninety (90) days
Yuvienco moved to dismiss on the ground of unenforceability under the Statute of Frauds
Issues:
1. whether or not there was a perfected contract of sale
2. whether or not the claim alleged therein is unenforceable under the Statute of Frauds
Held:
1. NO

it should be noted that the Gamboas telegram was that he was going to Tacloban To negotiate the
details and Yao King Ong's telegram simply says "we agree to buy property". It does not necessarily
connote acceptance of the price but instead suggests that the details were to be subject of
negotiation.

While Respondents maintain that what the telegram refers to as "details" to be "negotiated" are mere
"accidental elements", not the essential elements of the contract, this cannot hold water because it
was seen that negotiations have been going on for quite some time, but they have not come to a final
agreement, and a meeting of the minds did not materialize. That respondents were all the time
agreeable to buy the property may be conceded, but instead of "absolutely" accepting the "certain"
offer if there was one of the petitioners, they still insisted on further negotiation of details.
it being doubtful whether or not, under Article 1319 of the Civil Code, the said letter may be deemed
as an offer to sell that is "certain", and more, the Yao telegram is far from being an "absolute"
acceptance under said article, there still there appears to be a cause of action alleged in Paragraphs 8
to 12 of the respondents' complaint, considering it is alleged therein that subsequent to the telegram
of Yao, it was agreed that the petitioners would sell the property to respondents for P6.5 M, by paving
P2 M down and the balance in 90 days and which agreement was allegedly violated when in the deeds
prepared by Atty. Gamboa and taken to Tacloban, only 30 days were given to respondents.
BUT even if there seems to be a cause of action, such is still unenforceable under the Statute of
Frauds.
1. NO. There wasnt sufficient compliance with the Statute of Frauds because the manner of payment
was not included in the letters and telegrams.

Yuvienco initially argued against this motion and asked the court to reject the objection for the simple
reason that the contract of sale sued upon in this case is supported by letters and telegrams annexed
to the complaint and other papers which will be presented during the trial. This is not well taken. Yao
having alleged that the contract is backed up by letters and telegrams, and the same being a
sufficient memorandum, the complaint should be given a day in court and allowed to substantiate
their allegations.
In other words, the entire case was not dismissed outright just because the contract was backed up
by letters and telegrams. However, the central issue now (whether there is a cause of action because
of the change in the manner of payment) is UNENFORCEABLE for not being included in said letters
and telegrams.

It is nowhere alleged in said paragraphs 8 to 12 of the complaint that there is any writing or
memorandum, much less a duly signed agreement to the effect that the price of P6,500,000 fixed by
petitioners for the real property herein involved was agreed to be paid not in cash but in installments
as alleged by respondents. In any sale of real property on installments, the Statute of Frauds read
together with the perfection requirements of Article 1475 of the Civil Code must be understood and
applied in the sense that the idea of payment on installments must be in the requisite of a note or
memorandum therein contemplated.
Yaos complaint dismissed.
LIMKETKAI SONS MILLING, INC
v s.
CA

Phil Remnants Co constituted BPI as trustee to manage, administer & sell its real estate property

including one in Pasig. Revilla, a real estate broker was given formal authority by BPI to sell the lot for
1K/sqm w/c was concurred in by the owners of Phil Remnants.
Revilla contacted Alfonso Lim of Limketkai Sons who agreed to buy the land. So the officials of
Limketkai & Revilla were given permission to enter & view the property.

Revilla informed BPI that he had procured a buyer & 2 officials of Limketkai Sons (Alfonso Lim &
Albino Limketkai) went to BPI & met w/ the VP (Albano) and Asst VP (Aromin) of BPI to confirm the
sale. They asked that the price be reduced to 900/sqm but Albano stated the price to be 1,100/sqm.
They finally agreed that the lot be sold at 1K/sqm to be paid in cash. (Authority to sell was on a first
come first served basis & Limketkai Sons was the first comer)

Lim asked if it was possible to pay on terms. BPIs officials said that there was no harm in trying to
ask as the same had been allowed. However, it was understood that should the term payment be
disapproved, then price shall be paid in cash. It was Albano who dictated the terms under w/c

installments payments may be made & so, Lim wrote to BPI embodying the initial payment of 10% &
the 90% w/in 90 days.

3 days later, Limketkai Sons learned that its offer to pay on terms had been frozen. So Lim went to

BPI to tender payment of 33M w/ Albano but he refused stating that the authority to sell the land had
been w/drawn from his unit. The same check for 33M was tendered to BPI VP Bona, who also refused.
Limketkai Sons filed an action for specific performance w/ damages. In the course of trial, BPI
informed the TC that it had sold the property to Natl Book Store (NBS) & the complaint was amended
to include NBS.
TC: In favor of Limketkai. CA: reversed
W/N bank officials were authorized to enter into the contract? YES
At the start of the transaction, broker Revilla himself had already full authority and was acting for &
behalf of BPI. Notwithstanding this, Revilla saw it fit to bring BPI officials into the transaction. If BPI
could give authority to licensed broker then there is no reason to doubt the authority to sell of the BPI
officials whose precise job is to manage & administer real estate property.
Aromin, BPIs Asst VP & Trust Officer acted in a perfectly natural manner & showed no indication that
we was acting ultra vires. This shows that BPI held him out to the public as the officer routinely
handling such transactions. Everything in the record points to the full authority of Aromin to bind the
bank (made negotiations w/ Limketkai, etc) except for the self-serving memoranda or letters later
produced by BPI that Aromin was an inefficient & undesirable officer and who in fact, was dismissed
after he testified.
MAIN ISSUE: W/N there was a perfected contract because of Limketkais request to pay on terms
constituting it as a counter-offer & negotiations were still in progress at that point? PERFECTED
CONTRACT
Negotiation/Preparation Stage: authority given by Phil remnants to BPI, authority given by BPI to
broker Revilla, the offer to sell to Limketkai, the inspection of the property and the negotiations w/
Aromin & Albano

Perfection: Aromin & Albano, acting for BPI, agreed to sell & officers of Limketkai agreed to buy the

lot for 1K/sqm. Aside from this, there was the earlier agreement between Limketkai & Revilla there
was a concurrence of offer & acceptance on the object & the cause

The allegation of NBS that there was no concurrence of the offer & acceptance of the cause is belied
by Aromin & Albano, the officials w/ whom the contract was perfected the fact that the deed of sale
still had to be signed & notarized does not mean that no contract had already been perfected
The sale of land is valid regardless of the form it may have been entered into. The requisite form
under Art 458 is merely for convenience & failure to comply dos not affect its validity or binding effect.
If the law requires a document or other special form, as in the sale of real property, the contracting
parties may compel each other to observe that form once the contract has been perfected

STATUTE OF FRAUDS APPLICABLE because the sale involved real property. HOWEVER,

under Art 1403, an exception to the unenforceability of the Statute of Frauds (when a
written contract of sale is not necessary) is the existence of a written note or memorandum
evidencing the contract, w/c may be found in several writing, not only in one document.
The memorandum is written evidence that such a contract was entered into. a written
note/memorandum, embodying the essentials of the contract & signed by the party charged or his
agents suffices to make the verbal agreement enforceable, taking it out of the operation of the statute

While in this case there is no written contract, there are abundant notes & memoranda extant in the
records evidencing the elements of a written contract. (e.g.: ExhP letter to Amorin authorizing the
sale at 1K, giving 2% commission to the broken & instructing that sale be on cash basis;
ExhBissued by BPI to Reviila authorizing him to sell property, etc.) Combining all these notes &
memoranda, SC held that there is a perfected contract of sale. No particular form of language
or instrument is necessary to constitute a memorandum or note in writing under the statute of frauds
W/N NBS is an innocent purchaser for value? NO, NBS IN BAD FAITH
NBS ignored the notice of lis pedens annotated on the title when it bought the lot. It was the
willingness & design of NBS to buy property already sold to another party w/c led BPI to dishonor the
contract w/ Limketkai.

BADGES OF FRAUD: 1. Sale was supposed to be done through authorized broken but BPI officials
personally & directly took over this particular sale when a close friend became interested, 2. BPI Sen
VP admitted that NBS Pres was his friend & had lunch meetings to discuss purchase of the lot 3. NBS
offered 5m then 7M if Limketkai would drop the case & give up the lot 4. In an area abound w/
buildings, NBS had constructed only a warehouse w/c ccan easily be dismantled
CA DECISION REVERSED, RTC DECISION REINSTATED.
Ortega v. Leonardo
Partial performance EXC to Statute of Frauds
Ortega and Leonardo were both asserting their rights to a parcel of land in Malate for the purposes of

purchase. Because of this, an investigation ensued, and Leonardo proposed to Ortega that the latter
desist from her claim in exchange for the promise that if and when he succeeded in getting title to the
lot, he would sell to her a portion thereof, provided (1) she paid for the surveying and subdivision of
the lot and that (2) after he acquired title, she could continue holding the lot as tenant by paying
monthly rental until said portion shall haven been segregated and the purchase price fully paid.
The offer was accepted and Ortega desisted from her claim. She then caused the survey and
segregation and paid the monthly rentals.
However, when she tendered payment to defendant the purchase price which the latter refused to
accept.
Issue: w/n the contract is unenforceable for not being written, as required by the Statute of
Frauds?
TC: unenforceable
SC: the case falls under the exception, where there is partial performance.
There were several circumstances indicating partial performance:
1. the relinquishment of the rights of continued possession
2. the building of improvements, which is considered to the the strongest and most unequivocal act of
part performance
3. the tender of payment plus the surveying of the lot at Ortegas expense and the payment of the
rentals
It would be fraud if Leonardo was permitted to oppose performance of his part after he was allowed or induced
the former to perform in reliance upon the agreement.
CLAUDEL V. CA
Statute of frauds applicable
This case is basically a dispute over a land in Muntinlupa which was previously owned by Basilio
Claudel. He declared the lot in his name and paid the realty taxes, which was passed on to his widow
and son after his death.
The dispute is between the HEIRS OF CECILIO and the SIBLINGS OF CECILIO. The HEIRS partitioned
the land, and the SIBLINGS filed a case to cancel the titles and for reconveyance. The ground for this
was that the land was supposedly sold to them prior to Cecilios death for P30, but this was only a
verbal contract.
The CFI dismissed the case because, among others, the SIBLINGS were not able to present any
document evidencing the alleged sale, and the Statute of Frauds precludes admission of oral
testimony on the sale of real property. Plus, the action has prescribed.
CA reversed
Issue:
1. w/n the contract may be proven orally
2. w/n the prescriptive period for filing the action for cancellation and reconveyance should be
counted from thesale or from the date of issuance of titles?
Held:
1. NO
The rule of thumb is that a sale of land, once consummated, is valid regardless of the form it may
have been entered into. For nowhere does law or jurisprudence prescribe that the contract of sale be put in
writing before such contract can validly cede or transmit rights over a certain real property between the parties
themselves.
However, in the event that a third party, as in this case, disputes the ownership of the property, the
person against whom that claim is brought can not present any proof of such sale and hence has no means to
enforce the contract. Thus the Statute of Frauds was precisely devised to protect the parties in a contract of
sale of real property so that no such contract is enforceable unless certain requisites, for purposes of proof, are
met. Except under the conditions provided by the Statute of Frauds, the existence of the contract of sale made
by Cecilio w/ his siblings cannot be proved.
2. YES
The action is supposed to be based on an oral contract, which prescribes in 6 years. More than 6 years has
lapsed. The reason that an implied trust in favor of the SIBLINGS OF CECILIO was established in 1972,
when the HEIRS OF CECILIO executed a contract of partition over the said properties, is not well-taken. As
been pointed out, the law recognizes the superiority of the torrens title. Above all, the torrens title in the
possession of the HEIRS OF CECILIO carries more weight as proof of ownership than the survey or
subdivision plan of a parcel of land in the name of SIBLINGS OF CECILIO.
ALFREDO v. BORRAS (2003)
The owners of the subject lot in this case were petitioner spouses, Godofredo Alfredo and Carmen
Limon Alfredo. The Subject Land is covered by an OCT. Private respondents, spouses Armando Borras and
Adelia Lobaton Borras, filed a complaint for specific performance against Godofredo and Carmen before the
RTC. Armando and Adelia alleged in their complaint that Godofredo and Carmen mortgaged the Subject Land
for 7k with DBP. To pay the debt, Carmen and Godofredo sold the Subject Land to Armando and Adelia for
15k, the buyers to pay the DBP loan and its accumulated interest, and the balance to be paid in cash to the
sellers. Armando and Adelia gave Godofredo and Carmen the money to pay the loan to DBP
which signed the release of mortgage and returned the owners duplicate copy of OCT to Godofredo and

Carmen. Armando and Adelia subsequently paid the balance of the purchase price of the Subject Land.
Godofredo and Carmen then delivered to Adelia the owners duplicate copy of OCT, with the document of
cancellation of mortgage, official receipts of realty tax payments, and tax declaration in the name of
Godofredo. Godofredo and Carmen introduced Armando and Adelia, as the new owners of the Subject Land, to
the Natanawans, the old tenants of the Subject Land. Armando and Adelia then took possession of the Subject
Land. In January 1994, Armando and Adelia learned that hired
persons had entered the Subject Land and were cutting trees under instructions of allegedly new owners of the
Subject Land. Subsequently, Armando and Adelia discovered that Godofredo and Carmen had re-sold portions
of the Subject Land to several persons. Armando and Adelia filed an adverse claim with the Register of Deeds
of Bataan. Armando and Adelia discovered that Godofredo and Carmen had secured an owners duplicate copy
of OCT after filing a petition in court for the issuance of a new copy. Armando and Adelia wrote Godofredo and
Carmen complaining about their acts, but the latter did not reply. Thus, Armando and Adelia filed a complaint
for specific performance. Petitioners asserted that the Subsequent Buyers were buyers in good faith and for
value. TC: in favor of Armando and Amelia. RTC: there was perfected
contract of sale; all the elements are present (object, purchase price, manner of payment); subsequent buyers
not in GF. CA: affirmed
RTC
Issue: w/n there
was perfected contract of sale
Held:
1. There was a perfected contract of sale. A contract is perfected once there is consent of the contracting
parties on the object certain and on the cause of the obligation. The contract of sale has also been
consummated because the sellers and buyers have performed their respective obligations under the
contract. In a contract of sale, the seller obligates himself to transfer ownership of the determinate
thing sold, and to deliver the same, to the buyer who obligates himself to pay a price certain to the
seller.
2. Ownership of the thing sold is transferred to the vendee upon its actual or constructive delivery.
Godofredo and Carmen also turned over to Amando and Amelia the documents of ownership.
Armando and Amelia paid the full purchase price as evidenced by the receipt.

3.

Subsequent buyers not in GF because they were aware of the lis pendens in the title. Also. The settled
rules is when ownership or title passes to the buyer, the seller ceases to have any title to transfer to
any 3rd person. If the seller sells the same land to another, the 2 nd buyer hwo has actual or
constructive knowledge of the prior sal