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1. G.R. No.

. No. 125585 June 8, 2005 After the Cruzes presented the owners duplicate certificate, along with the deeds of
sale and the subdivision plan, the Register of Deeds cancelled the OCT and issued in
HEIRS OF EDUARDO MANLAPAT, represented by GLORIA MANLAPAT-BANAAG and lieu thereof TCT No. T-9326-P(M) covering 603 square meters of Lot No. 2204 in the
LEON M. BANAAG, JR., Petitioners, name of Ricardo and TCT No. T-9327-P(M) covering the remaining 455 square meters
vs. in the name of Eduardo.
HON. COURT OF APPEALS, RURAL BANK OF SAN PASCUAL, INC., and JOSE B. On 9 August 1989, the Cruzes went back to the bank and surrendered to Salazar TCT
SALAZAR, CONSUELO CRUZ and ROSALINA CRUZ-BAUTISTA, and the REGISTER OF No. 9327-P(M) in the name of Eduardo and retrieved the title they had earlier given as
DEEDS of Meycauayan, Bulacan,Respondents.
substitute collateral. After securing the new separate titles, the Cruzes furnished
petitioners with a copy of TCT No. 9327-P(M) through the barangay captain and paid
Tinga, J.: the real property tax for 1989.
n October of 1989, Banaag went to RBSP, intending to tender full payment of the
Facts: mortgage obligation. It was only then that he learned of the dealings of the Cruzes
with the bank which eventually led to the subdivision of the subject lot and the
The controversy involves Lot No. 2204, a parcel of land with an area of 1,058 square issuance of two separate titles thereon. In exchange for the full payment of the loan,
meters, located at Panghulo, Obando, Bulacan. The property had been originally in RBSP tried to persuade petitioners to accept TCT No. T-9327-P(M) in the name of
the possession of Jose Alvarez, Eduardos grandfather, until his demise in 1916. It Eduardo.
remained unregistered until 8 October 1976 when OCT No. P-153(M) was issued in The trial court found that petitioners were entitled to the reliefs of reconveyance and
the name of Eduardo pursuant to a free patent issued in Eduardos name3 that was damages. On this matter, it ruled that petitioners were bona fide mortgagors of an
entered in the Registry of Deeds of Meycauayan, Bulacan.4 The subject lot is adjacent unclouded title bearing no annotation of any lien and/or encumbrance. This fact,
to a fishpond owned by one Ricardo Cruz (Ricardo), predecessor-in-interest of
according to the trial court, was confirmed by the bank when it accepted the mortgage
respondents Consuelo Cruz and Rosalina Cruz-Bautista (Cruzes).
unconditionally on 25 November 1981. It found that petitioners were complacent and
Thereafter, two separate contract of sale was entered into by Eduardo with Ricardo, unperturbed, believing that the title to their property, while serving as security for a
constituting the area of 603 square meters of the lot, the first 503 square meters was loan, was safely vaulted in the impermeable confines of RBSP. To their surprise and
sold on 19 December 1954, before it was titled, while the succeeding 50 square prejudice, said title was subdivided into two portions, leaving them a portion of 455
meters was sold on 18 March 1981, after it was titled. square meters from the original total area of 1,058 square meters, all because of the
In December 1981, Leon Banaag, Jr. (Banaag), as attorney-in-fact of his father-in-law fraudulent and negligent acts of respondents and RBSP. The trial court ratiocinated
Eduardo, executed a mortgage with the Rural Bank of San Pascual, Obando Branch that even assuming that a portion of the subject lot was sold by Eduardo to Ricardo,
(RBSP), for P100,000.00 with the subject lot as collateral. Banaag deposited the petitioners were still not privy to the transaction between the bank and the Cruzes
owners duplicate certificate of OCT No. P-153(M) with the bank. which eventually led to the subdivision of the OCT into TCTs No. T-9326-P(M) and No.
Upon learning of their right to the subject lot, the Cruzes immediately tried to confront T-9327-P(M), clearly to the damage and prejudice of petitioners.
petitioners on the mortgage and obtain the surrender of the OCT. The Cruzes, The CA reversed the RTC decision. The appellate court ruled that petitioners were
however, were thwarted in their bid to see the heirs. On the advice of the Bureau of not bona fide mortgagors since as early as 1954 or before the 1981 mortgage,
Lands, NCR Office, they brought the matter to the barangay captain of Barangay Eduardo already sold to Ricardo a portion of the subject lot with an area of 553 square
Panghulo, Obando, Bulacan. During the hearing, petitioners were informed that the meters. This fact, the Court of Appeals noted, is even supported by a document of
Cruzes had a legal right to the property covered by OCT and needed the OCT for the sale signed by Eduardo Jr. and Engracia Aniceto, the surviving spouse of Eduardo,
purpose of securing a separate title to cover the interest of Ricardo. Petitioners, and registered with the Register of Deeds of Bulacan. The appellate court also found
however, were unwilling to surrender the OCT. that on 18 March 1981, for the second time, Eduardo sold to Ricardo a separate area
Secured copy of OCT from RBSP. Made a photocopy of the same OCT. Showed the containing 50 square meters, as a road right-of-way. Clearly, the OCT was issued only
copy to the Registry of Deeds which advice them to make a subdivision plan to after the first sale. It also noted that the title was given to the Cruzes by RBSP
segregate their interest in the whole property. voluntarily, with knowledge even of the banks counsel. Hence, the imposition of
They asked the opinion of Land Registration Officer, who agreed with the advice given damages cannot be justified, the Cruzes themselves being the owners of the property.
by the Registry of Deeds. Made a subdivision plan with the help of 2 geodetic
Certainly, Eduardo misled the bank into accepting the entire area as a collateral since
engineers. Presented the plan to the Land Management Bureau who approved of the the 603-square meter portion did not anymore belong to him. The appellate court,
same plan. however, concluded that there was no conspiracy between the bank and Salazar.
Issue: W/N the mortgage of the entire property, with the inclusion of the disputed portion of For a person to validly constitute a valid mortgage on real estate, he must be the absolute owner
Ricardos interest, is valid thereof as required by Article 2085 of the New Civil Code. The mortgagor must be the owner,
otherwise the mortgage is void. In a contract of mortgage, the mortgagor remains to be the
Held: owner of the property although the property is subjected to a lien. A mortgage is regarded as
nothing more than a mere lien, encumbrance, or security for a debt, and passes no title or estate
to the mortgagee and gives him no right or claim to the possession of the property. In this kind of
A careful perusal of the evidence on record reveals that the Cruzes have sufficiently proven their contract, the property mortgaged is merely delivered to the mortgagee to secure the fulfillment of
claim of ownership over the portion of Lot No. 2204 with an area of 553 square meters. The duly the principal obligation. Such delivery does not empower the mortgagee to convey any portion
notarized instrument of conveyance was executed in 1954 to which no less than Eduardo was a thereof in favor of another person as the right to dispose is an attribute of ownership. The right to
signatory. The execution of the deed of sale was rendered beyond doubt by Eduardos dispose includes the right to donate, to sell, to pledge or mortgage. Thus, the mortgagee, not
admission in his Sinumpaang Salaysay dated 24 April 1963.35These documents make the being the owner of the property, cannot dispose of the whole or part thereof nor cause the
affirmance of the right of the Cruzes ineluctable. impairment of the security in any manner without violating the foregoing rule. The mortgagee
only owns the mortgage credit, not the property itself.
Registration is not a requirement for validity of the contract as between the parties, for the effect
of registration serves chiefly to bind third persons. The principal purpose of registration is merely 2. NOTE: WALA KOY NAHANAP NA VAGILIDAD VS VAGILDAD NA DIGEST
to notify other persons not parties to a contract that a transaction involving the property had
been entered into. Where the party has knowledge of a prior existing interest which is 3. National Grains Authority v. IAC
unregistered at the time he acquired a right to the same land, his knowledge of that prior
unregistered interest has the effect of registration as to him. Facts:

Further, the heirs of Eduardo cannot be considered third persons for purposes of applying the On August 23, 1979, private respondent Leon Soriano offered to sell palay grains to NFA
rule. The conveyance shall not be valid against any person unless registered, except (1) the through William Cabal, the provincial manager in Tuguegarao. The documents submitted were
grantor, (2) his heirs and devisees, and (3) third persons having actual notice or knowledge processed, and he was given a quota of 2,640 cavans, which is the maximum number of cavans
thereof. Not only are petitioners the heirs of Eduardo, some of them were actually parties to he may sell to NFA. On the same day and on the following day, Soriano delivered 630 cavans,
the Kasulatan executed in favor of Ricardo. Thus, the annotation of the adverse claim of the which were no rebagged, classified and weighed. When he demanded payment, he was told
Cruzes on the OCT is no longer required to bind the heirs of Eduardo, petitioners herein. that payment will be held in abeyance since Mr. Cabal was still investigating on an information
received that Soriano was not a bona fide farmer. Instead of withdrawing the palay, Soriano
insisted that the palay grains be delivered and paid. He filed a complaint for specific
The requirements of a valid mortgage are clearly laid down in Article 2085 of the New Civil
performance. Petitioners contend that the delivery was merely made for the purpose of offering it
Code, viz:
for sale because until the grains were rebagged, classified and weighed, they are not considered
ART. 2085. The following requisites are essential to the contracts of pledge and mortgage:
(1) That they be constituted to secure the fulfillment of a principal obligation;
Whether there was a perfected sale
(2) That the pledgor or mortgagor be the absolute owner of the thing pledged or
mortgaged; Held:

(3) That the persons constituting the pledge or mortgage have the free disposal of Soriano initially offered to sell palay grains produced in his farmland to NFA. When the latter
their property, and in the absence thereof, that they be legally authorized for the accepted the offer by noting in Soriano's Farmer's Information Sheet a quota of 2,640 cavans,
purpose. there was already a meeting of the minds between the parties. The object of the contract, being
the palay grains produced in Soriano's farmland and the NFA was to pay the same depending
Third persons who are not parties to the principal obligation may secure the latter by pledging or upon its quality. The fact that the exact number of cavans of palay to be delivered has not been
mortgaging their own property. (emphasis supplied) determined does not affect the perfection of the contract. Article 1349 of the New Civil Code
provides: ". . .. The fact that the quantity is not determinate shall not be an obstacle to the
existence of the contract, provided it is possible to determine the same, without the need of a
new contract between the parties." In this case, there was no need for NFA and Soriano to enter At the foreclosure sale held on March 15, 1984, the mortgaged property was sold to CDB as the
into a new contract to determine the exact number of cavans of palay to be sold. Soriano can highest bidder. Guansing failed to redeem, and on March 2, 1987, CDB consolidated title to the
deliver so much of his produce as long as it does not exceed 2,640 cavans. From the moment property in its name. TCT No. 300809 in the name of Guansing was cancelled and, in lieu
thereof, TCT No. 355588 was issued in the name of CDB.1wphi1.nt
the contract of sale is perfected, it is incumbent upon the parties to comply with their mutual
obligations or "the parties may reciprocally demand performance" thereof. On June 16, 1988, private respondent Lolita Chan Lim, assisted by a broker named Remedios
Gatpandan, offered to purchase the property from CDB.
4. TAEDO V. CA (January 22, 1996)
Pursuant to the foregoing terms and conditions of the offer, Lim paid CDB P30,000.00 as Option
Money, for which she was issued Official Receipt No. 3160, dated June 17, 1988, by CDB.
FACTS: However, after some time following up the sale, Lim discovered that the subject property was
Lazaro Taedo executed a deed of absolute sale in favor of Ricardo Taedo and Teresita originally registered in the name of Perfecto Guansing, father of mortgagor Rodolfo Guansing,
Barrera in which he conveyed a parcel of land which he will inherit. Upon the death of his father under TCT No. 91148.
he executed an affidavit of conformity to reaffirm the said sale. He also executed another deed
of sale in favor of the spouses covering the parcel of land he already inherited. Ricardo Aggrieved by what she considered a serious misrepresentation by CDB and its mother-
registered the last deed of sale in the registry of deeds in their favor. company, FEBTC, on their ability to sell the subject property, Lim, joined by her husband, filed
on August 29, 1989 an action for specific performance and damages against petitioners in the
Ricardo later learned that Lazaro sold the same property to his children through a deed of sale. Regional Trial Court.

ISSUE: On March 10, 1993, the trial court rendered a decision in favor of the Lim spouses. Petitioners
WON the Taedo spouses have a better right over the property against the children of Lazaro brought the matter to the Court of Appeals, which, on October 14, 1997, affirmed in toto the
Taedo. decision of the Regional Trial Court.

HELD: Issue: WON there was a valid sale.

Since a future inheritance generally cannot be a subject of a contract, the deed of sale and the
affidavit of conformity made by Lazaro has no effect. The subject of dispute therefore is the deed Held: NO.
of sale made by him in favor of spouses Taedo and another to his children after he already
legally acquired the property. In this case, the sale by CDB to Lim of the property mortgaged in 1983 by Rodolfo Guansing
must, therefore, be deemed a nullity for CDB did not have a valid title to the said property. To be
Thus, although the deed of sale in favor of private respondents was later than the one in favor of sure, CDB never acquired a valid title to the property because the foreclosure sale, by virtue of
petitioners, ownership would vest in the former because of the undisputed fact of registration. which, the property had been awarded to CDB as highest bidder, is likewise void since the
On the other hand, petitioners have not registered the sale to them at all. mortgagor was not the owner of the property foreclosed.

Petitioners contend that they were in possession of the property and that private respondents A foreclosure sale, though essentially a "forced sale," is still a sale in accordance with Art. 1458
never took possession thereof. As between two purchasers, the one who registered the sale in of the Civil Code, under which the mortgagor in default, the forced seller, becomes obliged to
his favor has a preferred right over the other who has not registered his title, even if the latter is transfer the ownership of the thing sold to the highest bidder who, in turn, is obliged to pay
in actual possession of the immovable property. therefor the bid price in money or its equivalent. Being a sale, the rule that the seller must be the
owner of the thing sold also applies in a foreclosure sale. This is the reason Art. 2085 of the Civil
Code, in providing for the essential requisites of the contract of mortgage and pledge, requires,
5. Cavite Development Bank Vs. Lim among other things, that the mortgagor or pledgor be the absolute owner of the thing pledged or
mortgaged, in anticipation of a possible foreclosure sale should the mortgagor default in the
Facts: payment of the loan.
Petitioners Cavite Development Bank (CDB) and Far East Bank and Trust Company (FEBTC)
are banking institutions duly organized and existing under Philippine laws. On or about June 15, There is, however, a situation where, despite the fact that the mortgagor is not the owner of the
1983, a certain Rodolfo Guansing obtained a loan in the amount of P90,000.00 from CDB, to mortgaged property, his title being fraudulent, the mortgage contract and any foreclosure sale
secure which he mortgaged a parcel of land situated at No. 63 Calavite Street, La Loma, arising therefrom are given effect by reason of public policy. This is the doctrine of "the
Quezon City and covered by TCT No. 300809 registered in his name. As Guansing defaulted in mortgagee in good faith" based on the rule that all persons dealing with property covered by a
the payment of his loan, CDB foreclosed the mortgage. Torrens Certificate of Title, as buyers or mortgagees, are not required to go beyond what
appears on the face of the title. The public interest in upholding the indefeasibility of a certificate
of title, as evidence of the lawful ownership of the land or of any encumbrance thereon, protects
a buyer or mortgagee who, in good faith, relied upon what appears on the face of the certificate
of title. ision, rendering the Kasunduan void because at the time of its execution (1972), the lotwas still
owned by the Republic of the Philippines. Hence, no right was transferred to
This principle is cited by petitioners in claiming that, as a mortgagee bank, it is not required to
make a detailed investigation of the history of the title of the property given as security before Jaime,who was awarded the lot in 1986 and no right was transferred by Salvador to the
accepting a mortgage.
petitioners. Also, the CA held that the action had prescribed, it having been filed in 1992,more
We are not convinced, however, that under the circumstances of this case, CDB can be than four years from the issuance of the title to the spouses Remoquillo.
considered a mortgagee in good faith. While petitioners are not expected to conduct an
exhaustive investigation on the history of the mortgagor's title, they cannot be excused from the Hence, this petition.
duty of exercising the due diligence required of banking institutions. In Tomas v. Tomas, we
noted that it is standard practice for banks, before approving a loan, to send representatives to
the premises of the land offered as collateral and to investigate who are real owners thereof, ISSUE:
noting that banks are expected to exercise more care and prudence than private individuals in
(1)Whether or not the property was acquired by the spouses Remoquillo throughfraud which by
their dealings, even those involving registered lands, for their business is affected with public
interest. force of law, considered them trustees of an implied trusts
(2)Whether or not the prescriptive period to recover the property obtained byfraud is applicable
6. Heirs of Salvador Hermosilla vs. Spouses Remoquillo in the case at bar

(1) NO. The property was previously a public land, petitioners have no personality to impute
The subject property is a 65 sq.m. lot located in the San Pedro Tunasan Homesite. This
fraud or misrepresentation against the State or violation of the law.
Homesite was acquired by the Republic of the Philippines in 1931. Apolinario
If the title was in fact fraudulently obtained, it is the State which should file the suit to
Hermosilla(Apolinario) was occupying a lot in such homesite until his death in 1964. He caused
recover the property through the Office of the Solicitor General. The title originated from a grant
the subdivision of the lots into two, Lot 12 and Lot 19, with the same area of 341 sq. m. The
by the government, hence, its cancellation is a matter between the grantor and the grantee.
65sq.m. subject of this controversy forms part of Lot 19.In 1962, Apolinario made a deed of
At all events, for an action for reconveyance based on fraud to prosper, the petitioners must
assignment transferring possession of Lot 19in favor of his grandson, Jaime Remoquillo. The
prove by clear and convincing evidence not only his title to the property but also the fact of fraud.
Land Tenure Administration later found that Lot 19 is still available for qualified applicants.
Fraud is never presumed.
Jaime, being its occupant filed an application in 1963.
Intentional acts to deceive and deprive another of his right, or in some manner injure him must
On that same year, Apolinario conveyed Lot 12 to his son Salvador. He filed for anapplication to
be specifically alleged and proved by the petitioners by clear and convincing evidence.
purchase the said lot, which the LTA granted in 1971.In 1972, Jaime and Salvador made a
Petitioners failed to discharge this burden.
Kasunduan whereby Jaime transferredownership of the 65 sq.m. in Lot 19 in favor of Salvador.
In 1986, the NHA (then LTA)awarded Lot 19 to Jaime, for which he and his wife were issued a
(2) NO. From the allegations of the Complaint, petitioners seek the reconveyance of the property
title. The petitioners filed for the annulment of the title on the ground of fraud becauseby the
based on implied trust. The prescriptive period for the reconveyanceof fraudulently registered
virtue of the Kasunduan, the 65 sq.m. in Lot 19 were already conveyed to Salvador.
real property is 10 years, reckoned from the date of the issuance of the certificate of title, if
The trial court held that the petitioners were co-owners of the subject
the plaintiff is not in possession, but imprescriptible if he is in possession of the property.It is
propertyand allowed for the action for specific performance. The CA reversed the trial courtsdec
undisputed that petitioners houses occupy the questioned property and thatrespondents have
Ruling: The Court ruled that the petitioners could not derive title of Lot No. 6-B because Miguel
not been in possession thereof. Since there was no actual need to reconvey the property as
R. Socco was not yet the owner of the said lot and was only expecting to inherit the same. The
petitioners remained in possession thereof, the action took the nature of a suit for quieting of contract was a conditional sale, conditioned upon the event Miguel Socco would actually inherit
title, it having been filed to enforce an alleged implied trust after Jaime refused to segregate title and become the owner of the said property. The Court, relying on Article 1459 of the Civil Code
on contracts of sale, said that, The thing must be licit and the vendor must have the right to
over Lot 19.One who is in actual possession of a piece of land claiming to be the owner thereof transfer the ownership thereof at the time it is delivered. The law specifically requires that the
may wait until his possession is disturbed or his title is attacked before taking steps to vindicate vendor must have ownership of the property at the time of it is delivered. Hence, there was no
valid sale from which ownership of the property could have transferred from Miguel Socco to
his right. From the body of the complaint, this type of action denotes imprescriptibility.
Arturo Reyes, since, at the time of the execution, the former was not yet the owner of the same
In Summary: and was only expecting to inherit it. Furthermore, Arturo Reyes, not having acquired ownership
of the property, could not have conveyed the same to his heirs.
The CA, reversing the decision of the trial court, held that the Kasunduan was void because at
the time of its execution in 1972, the Republic of the Philippines was still the owner of Lot 19, 8. BOSTON BANK OF THE PHILIPPINES VS. MANALO
hence, no right thereover was transmitted by Jaime who was awarded the said lot in 1986, and
consequently, no right was transmitted by Salvador through succession to petitioners. And it
found no evidence of fraud in Jaime's act of having Lot 19, including the questioned property, 1. Xavierville Estate, Inc. (XEI) sold to The Overseas Bank of Manila (OBM) some residential
registered in his and his wife's name in 1987. lots in Xavierville subdivision. Nevertheless, XEI continued selling the residential lots in the
subdivision as agent of OBM.

As priorly stated, when the Kasunduan was executed in 1972 by Jaime in favor of Salvador - 2. Carlos Manalo, Jr. proposed to XEI, through its President Emerito Ramos (Ramos), that he
petitioners' predecessor-in-interest - Lot 19, of which the questioned property forms part, was will purchase two lots in the Xavierville subdivision and offered as part of the downpayment the
P34,887.66 Ramos owed him. XEI, through Ramos, agreed.
still owned by the Republic. Nemo dat quod no habet, Nobody can give what he does not
possess. Jaime could not thus have transferred anything to Salvador via the Kasunduan. 3. In a letter dated August 22, 1972 to Perla Manalo (Carlos wife), Ramos confirmed the
reservation of the lots. In the letter he also pegged the price of the lots at P348,060 with a 20%
down payment of the purchase price amounting to P69,612.00 (less the P34,887.66 owing from
7. Heirs of Arturo Reyes v. Socco-Beltran, G.R. No. 176474 Ramos), payable as soon as XEI resumes its selling operations; the corresponding Contract of
Conditional Sale would then be signed on or before the same date. Perla Manalo conformed to
the letter agreement.

4. Thereafter, the spouses constructed a house on the property. The spouses were notified of
XEIs resumption of selling operations. However, they did not pay the balance of the
Facts: Elena Socco-Beltran (Socco) filed an application for Lot No. 6-B, alleging that it was downpayment because XEI failed to prepare a contract of conditional sale and transmit the
adjudicated in her favor in the extra-judicial settlement of Constancia Soccos estate, before the same to them. XEI also billed them for unpaid interests which they also refused to pay. XEI
Department of Agrarian Reform (DAR). The heirs of Arturo Reyes opposed the application on the turned over its selling operations to OBM.
ground that Lot No. 6-B was sold by Miguel R. Socco, brother of Socco, in favor of their father,
Atty. Arturo Reyes, as evidenced by the Contract to Sell.

Issue: Whether or not petitioners have a better right to the subject property over the
5. Subsequently, Commercial Bank of Manila (CBM) acquired the Xavierville Estate from OBM. 1.) Whether or not the factual issues raised by the petitioner are proper
CBM requested Perla Manalo to stop any on-going construction on the property since it (CBM)
was the owner of the lot and she had no permission for such construction. Perla informed them 2.) Whether or not there was a perfected contract to sell the property
that her husband had a contract with OBM, through XEI, to purchase the property. She promised
to send CBM the documents. However, she failed to do so. Thus, CBM filed a complaint for 3.) Whether or not the CA correctly held that the terms of the deeds of conditional sale executed
unlawful detainer against the spouses. But later on, CBM moved to withdraw its complaint by XEI in favor of the other lot buyers in the subdivision, which contained uniform terms of 120
because of the issues raised. In the meantime, CBM was renamed the Boston Bank of the equal monthly installments, constitute evidence that XEI also agreed to give the Manalo spouses
Philippines. the same mode and timeline of payment. (Evidence, Disputable Presumptions, Habits and
Customs Rule 130, Section 34)
6. Then, the spouses filed a complaint for specific performance and damages against the bank
before the RTC. The spouses alleged that they had always been ready and willing to pay the HELD:
installments on the lots sold to them but no contract was forthcoming. The spouses further
alleged that upon their partial payment of the downpayment, they were entitled to the execution 1.) YES. The rule is that before this Court, only legal issues may be raised in a petition for review
and delivery of a Deed of Absolute Sale covering the subject lots. During the trial, the spouses on certiorari. The reason is that this Court is not a trier of facts, and is not to review and calibrate
adduced in evidence the separate Contracts of Conditional Sale executed between XEI and 3 the evidence on record. Moreover, the findings of facts of the trial court, as affirmed on appeal by
other buyers to prove that XEI continued selling residential lots in the subdivision as agent of the Court of Appeals, are conclusive on this Court unless the case falls under any of the
OBM after the latter had acquired the said lots. following exceptions.1 A careful examination of the factual backdrop of the case, as well as the
antecedental proceedings constrains us to hold that petitioner is not barred from asserting that
RTC : XEI or OBM, on one hand, and the respondents, on the other, failed to forge a perfected contract
to sell the subject lots.
The trial court ordered the petitioner (Boston Bank) to execute a Deed of Absolute Sale in favor
of the spouses upon the payment of the spouses of the balance of the purchase price. It ruled 2.) NO. In a contract to sell property by installments, it is not enough that the parties agree on
that under the August 22, 1972 letter agreement of XEI and the spouses, the parties had a the price as well as the amount of downpayment. The parties must, likewise, agree on the
"complete contract to sell" over the lots, and that they had already partially consummated the manner of payment of the balance of the purchase price and on the other terms and conditions
same. relative to the sale. Even if the buyer makes a downpayment or portion thereof, such payment
cannot be considered as sufficient proof of the perfection of any purchase and sale between the
parties. 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 the price. The agreement as to the manner of
CA: payment goes into the price, such that a disagreement on the manner of payment is tantamount
to a failure to agree on the price. We have meticulously reviewed the records, including Ramos
The Court of Appeals sustained the ruling of the RTC, but declared that the balance of the February 8, 1972 and August 22, 1972 letters to respondents and find that said parties confined
purchase price of the property was payable in fixed amounts on a monthly basis for 120 months, themselves to agreeing on the price of the property (P348,060.00), the 20% downpayment of the
based on the deeds of conditional sale executed by XEI in favor of other lot buyers. purchase price (P69,612.00), and credited respondents for the P34,887.00 owing from Ramos
as part of the 20% downpayment. Based on these two letters, the determination of the terms of
Boston Bank filed a Motion for the Reconsideration of the decision alleging that there was no
perfected contract to sell the two lots, as there was no agreement between XEI and the
respondents on the manner of payment as well as the other terms and conditions of the sale.
1 (1) when the conclusion is a finding grounded entirely on speculations, surmises and conjectures; (2) when the inference
made is manifestly mistaken, absurd or impossible; (3) where there is a grave abuse of discretion; (4) when the judgment is
Boston Bank also asserts that there is no factual basis for the CA ruling that the terms and based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its
conditions relating to the payment of the balance of the purchase price of the property (as findings went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) when
the findings are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific
agreed upon by XEI and other lot buyers in the same subdivision) were also applicable to the
evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs
contract entered into between the petitioner and the respondents. CA denied the MR. are not disputed by the respondents; and (10) when the findings of fact of the Court of Appeals are premised on the supposed
absence of evidence and contradicted by the evidence on record. We have reviewed the records and we find that, indeed, the
ISSUES: ruling of the appellate court dismissing petitioners appeal is contrary to law and is not supported by evidence.
payment of the P278,448.00 had yet to be agreed upon on or before December 31, 1972, or CFI of Pampanga but he was unable to give the required bond, an indispensable
even afterwards, when the parties sign the contract of conditional sale. So long as an essential condition for his appointment.
element entering into the proposed obligation of either of the parties remains to be determined Since Cruzado was friends with Bustos, a rich woman in their place. He begged the
by an agreement which they are to make, the contract is incomplete and unenforceable. latter to simulate a mortgage deed of a certain property and have it executed in court
in his favor only to pose that he has real property to enable him to qualify to such
3.) NO. The bare fact that other lot buyers were allowed to pay the balance of the purchase price position of procurador. In truth, the said mortagage was a front and fraudulent but was
of lots purchased by them in 120 or 180 monthly installments does not constitute evidence that effected by making a pretended contract which bore the appearance of truth.
XEI also agreed to give the respondents the same mode and timeline of payment. Under It is unquestionable that the contract of sale was perfect and binding upon both
Section 34, Rule 130 of the Revised Rules of Court, evidence that one did a certain thing at one contracting parties since their names both appear in that instrument to have agreed
time is not admissible to prove that he did the same or similar thing at another time, although upon the thing sold. But it is also undeniable that the said contract was not
such evidence may be received to prove habit, usage, pattern of conduct or the intent of the consummated. 1.) Cruzado did not pay the purchase price of P2,200 2.) he never took
parties. Habit, custom, usage or pattern of conduct must be proved like any other facts. The possession of the land apparently sold in the said deed. All that the vendee did was to
offering party must establish the degree of specificity and frequency of uniform response that pledge the land as a security for the faithful discharge of the duties of his office.
ensures more than a mere tendency to act in a given manner but rather, conduct that is semi- Santiago Cruzado, the son, brought an action for recovery of possession, founded on
automatic in nature. The offering party must allege and prove specific, repetitive conduct that the right transmitted to him by his father at his death a right arising from the said
might constitute evidence of habit. The examples offered in evidence to prove habit, or pattern of simulated deed of sale of the land in question.
evidence must be numerous enough to base on inference of systematic conduct. Mere similarity
of contracts does not present the kind of sufficiently similar circumstances to outweigh the Issue:
danger of prejudice and confusion. In determining whether the examples are numerous enough,
and sufficiently regular, the key criteria are adequacy of sampling and uniformity of response. It W/N the said deed of sale was simulated, not with the intent to defraud 3rd persons,
is only when examples offered to establish pattern of conduct or habit are numerous enough to but for the sole purpose of making it appear that Agapito Cruzado has real property?
lose an inference of systematic conduct that examples are admissible. Respondents failed to W/N rights of transmission acquired by Santiago Cruzado from the death of his father,
allege and prove that, as a matter of business usage, habit or pattern of conduct, XEI granted pertaining to the said land in contest is valid and without defect?
all lot buyers the right to pay the balance of the purchase price in installments of 120 months of
fixed amounts with pre-computed interests, and that XEI and the respondents had intended to Ruling:
adopt such terms of payment relative to the sale of the two lots in question. Indeed, respondents
adduced in evidence the three contracts of conditional sale executed by XEI and other lot buyers Under the law, the contract of purchase and sale, as consensual, is perfected by
merely to prove that XEI continued to sell lots in the subdivision as sales agent of OBM after it consent as to the price and the thing and is consummated by the reciprocal delivery of
acquired said lots, not to prove usage, habit or pattern of conduct on the part of XEI to require all the one and the other. Full ownership of the thing sold being conveyed to the vendee,
lot buyers in the subdivision to pay the balance of the purchase price of said lots in 120 months. from which moment the right of action derived from this right may be exercised. the
record discloses that there was no payment made by Cruzado to Bustos, thus,
9. Cruzado v. Bustos rendering the contract not to be consummated.
Art 1164 states that, a creditor has a right to the fruits of the time the obligation to
Case: deliver it arise. However, he shall not acquire a property right thereto until it has been
delivered to him.
An appeal from the judgment of CFI Pampanga allowing declaring defendant Bustos Besides the failure to pay the purchase price, neither the vendee nor his heirs, had at
as the rightful owner of the property in question. any time taken possession of the land. Seven witnesses attest to the fact, Bustos and
Bustos and Escaler who has said to be detaining such land, refused to deliver the her husband while still living, continued to possess the said land supposedly sold to
possession thereof to plaintiff and refused to recognize his ownership of the same. Agapito Cruzado and cultivated it, as she had done long before the sale of September
1875 to September 1891, the date of complaint by Santiago Cruzado.
Facts: Consequently, at the death of Agapito, he could not have transmitted to the Santiago
as his successor any greater right than a personal right to exact fulfillment of a
Agapito Cruzado was a poor man living in Pampanga, he had a job in court but was contract, as plaintiff was not the owner of the said land, he could not validly register it.
still not enough to support his family. He aspired to hold the office of procurador in the This fulfillment of a right has already prescribed since, under the law, prescription
towards real property shall be 30 years. In the case at bar, the action to recover took particular case. Though the fact or extent of authority of the agents may not, as a general rule,
34 years to bring it to court, thus has already prescribed. be established from the declarations of the agents alone, if one frofessed to act as agent for
Petition is denied.
another, she may be stopped to deny her agency both as against the asserted principal and the
10. Jocelyn B. Doles vs. Ma. Aura Tina Angeles third persons interested in the transaction in which he or she is engaged.
G.R. No. 149353. June 26, 2006.
In this case, petitioner knew that the financier of the respondent is Pua, and respondent knew
Facts: that the borrowers are friends of petitioner. It is sufficient that petitioner disclosed to respondent
Petitioner executed a Deed of Absolute Sale ceding a parcel of land in favor of respondent to that the former was acting in behalf of her principals, her friends. For an agency to arise, it is not
satisfy the alleged indebtedness of the former in the amount of P405,430.00. Since the said land necessary that the principal personally encounter the third person with whom the agent
was mortgaged to the National Home Mortgage Finance Corporation, they further agreed that interacts.
respondent assume the remaining balance of the loan. Learning that the petitioner still has
arrearages, respondent demanded that the arrearages be paid first. Petitioner did not heed, thus Here, both petitioner and respondent have undeniably disclosed to each other that they are
a case was filed by the respondent. representing someone else and so both of them are estopped to deny the same.

In answer, the petitioner alleged that sale was void for lack of consideration and that she was not That both parties acted as mere agents is shown by the undisputed fact that the friends of the
indebted to the respondent as she only referred her friends to respondent whom she knew to be petitioner issued checks in payment of the loan in the name of Arsenio Pua.

engaged in the business of lending money in exchange for personal checks through her
capitalist Arsenio Pua. Further petitioner contended that since the respondent is also an agent,
she does not have the capacity to sue her. 11. Torres vs. CA

It is an admitted fact by both petitioner and defendant, based on their testimonies, that
respondent knew that the money will be used by the friends of the petitioner; that the respondent Petitioners Torres and Baring entered into a joint venture agreement with Respondent Torres
was merely representing Arsenio Pua; and that before the supposed friends of the petitioner for the development of a parcel of land into a subdivision. They executed a Deed of Sale
covering the said parcel of land in favor of respondent Manual Torres, who then had it registered
defaulted in payment, each issued their personal checks in the name of Arsenio Pua for the in his name. By mortgaging the property, respondent Manuel Torres obtained from Equitable
payment of their debt. Bank a loan of P40,000, which was supposed to be used for the development of subdivision as
per the JVA. However, the project did not push through and the land was subsequently
foreclosed by the bank.
Whether or not petitioner and respondent were acting on their personal capacity or as mere Petitioners Antonia Torres alleged that it was due to respondents lack of funds/skills that caused
the project to fail, and that respondent use the loan in the furtherance of his own company. On
agents. the otherhand, respondent Manuel Torres alleged that he used the loan to implement the JVA
surveying and subdivision of lots, approval of the project, advertisement, and construction of
roads and the likes, and that he did all of these for a total of P85,000.
The question whether an agency has been created is ordinarily a question which may be Petitioners filed a case for estafa against respondent but failed. They then instituted a civil case.
established in the same was as any other fact, either by direct or circumstantial evidence. CA held that the two parties formed a partnership for the development of subdivision and as
such, they must bear the loss suffered by the partnership in the same proportion as their share
Agency may be implied from the words and conduct of the parties and the circumstances of the in profits. Hence, the petition.
Issue #1: committee of appraisers was appointed to ascertain and fix the actual value of La Insular. The
Whether or not the transaction between petitioner and respondent was that of joint
committee rendered its report on November 14, 1910, fixing the net value at P4,428,194.44.
Subsequently to the execution of Exhibit J, demand was made by the plaintiff upon the
Held: defendant for his share of the profits from June 30, 1909, to November 22, 1910. This demand
Yes. There formed a partnership between the two on the basis of joint-venture agreement and
was refused and thereupon this action was instituted to recover said profits.
deed of sale. A reading of the terms of agreement shows the existence of partnership pursuant
to Art 1767 of Civil Code, which states By the contract of partnership two or more persons bind
themselves to contribute money, property, or industry to a common fund, with the intention of The plaintiff argued that if the agreement of May 3, 1910, was a perfected sale he cannot
dividing the profits among themselves. In the agreement, petitioners would contribute property
to the partnership in the form of land which was to be developed into a subdivision; while recover any profits after that date; while on the other hand the defendant concedes that if said
respondent would give, in addition to his industry, the amount needed for general expenses and agreement was only a promise to sell in the future it, standing alone, would not prevent recovery
other costs. Furthermore, the income from the said project would be divided according to the
stipulated percentage. Clearly, the contract manifested the intention of the parties to form a in this action.
ISSUE: Whether the agreement made by the parties on May 3, 1910 was a perfected contract of
Issue #2: sale.
Whether or not the deed of sale between the two was valid.

HELD: YES, it was a perfected contract of sale.

No. Petitioners were wrong in contending that the JVA is void under Article 1422[14] of the Civil
Code, because it is the direct result of an earlier illegal contract, which was for the sale of the Article 1450 of the Civil Code reads: "The sale shall be perfected between vendor
land without valid consideration.
and vendee and shall be binding on both of them, if they have agreed upon the thing which is

The Joint Venture Agreement clearly states that the consideration for the sale was the the object of the contract and upon the price, even when neither has been delivered."
expectation of profits from the subdivision project. Its first stipulation states that petitioners did
not actually receive payment for the parcel of land sold to respondent. Consideration, more This is supplemented by Article 1447 of the Code which reads as follows: "In order that the
properly denominated as cause, can take different forms, such as the prestation or promise of a
thing or service by another. price may be considered fixed, it shall be sufficient that it be fixed with regard to another
determine thing also specific, or that the determination of the same be left to the judgment of a
In this case, the cause of the contract of sale consisted not in the stated peso value of the land, specified person."
but in the expectation of profits from the subdivision project, for which the land was intended to
be used. As explained by the trial court, the land was in effect given to the partnership as
petitioners participation therein. There was therefore a consideration for the sale, the petitioners The contract of May 3, 1910, provides that:"Whereas the respective contracting
acting in the expectation that, should the venture come into fruition, they would get sixty percent parties have agreed, the one to sell and the other to buy the whole of the right, title and interest
of the net profits.
of the said Antonio Maria Barretto in and to the said joint account association, including not only
12. ANTONIO M. BARRETTO, plaintiff-appellee, vs. JOSE SANTA MARINA, defendant- the individual participation of the said party of the second part standing on the books of the
appellant. association in the name of Antonio M. Barretto, but also one-half of the share in the business
which stands on the books in the name of Barretto & Company constituting a total nominal share
FACTS: The La Insular cigar and cigarette factory is a joint account association with a nominal of P54,700 Philippine currency in the total nominal capital of P865,000 Philippine currency
capital of P865,000, the plaintiff's share is P20,000, or 4/173 of the whole. The plaintiff's
attorneys wrote the defendant's local representative a letter offering to sell plaintiff's share in the
factory. The result of the correspondence between the parties and their representatives was that
Exhibit G was duly executed on May 3, 1910. In accordance with the terms of this exhibit a
Under article 1450, supra there are two indispensable requisites in a perfected 14. ROBLES v. HERMANOS
sale: (1) There must be an agreement upon the things which is the object of the contract; G.R. No. L-26173 July 13, 1927
Street, J.
and (2) the contracting parties must agree upon the price. The object of the contract in
the case at bar was the whole of the plaintiff's right, title, and interest in La Insular. This Doctrine:
whole was 4/173 of the entire net value of the business. The parties agreed that the price should The lessee may prove an independent verbal agreement on the part of the landlord to put the
leased premises in a safe condition.
be 4/173 of the total net value. The fixing of such net value was unreservedly left to the judgment
of the appraisers. As to the thing and the price the minds of the contracting parties met, The appraised value of the property may be used to determine the price.
and all questions relating thereto were settled. Nothing was left unfinished in so far as the
contracting parties were concerned. Neither party could withdraw from the contract A parcel of land was originally owned by the parents of the present plaintiff, Zacarias Robles.
without the consent of the other. The result is that the two essential requisites necessary Upon the death of his father, plaintiff leased the parcel of land from the administrator with the
to constitute a perfected sale were present. stipulation that any permanent improvements necessary to the cultivation and exploitation of the
hacienda should be made at the expense of the lessee without right to indemnity at the end of
the term. As the place was in a run-down state, and it was foreseen that the lessee would be put
to much expense in bringing the property to its productive capacity, the annual rent was fixed at
the moderate amount of P2,000 per annum.
We find that the parties did not only agree "the one to sell and the other to buy" and
that "one will immediately sell and the other will immediately buy" the whole of the plaintiff's The plaintiff made various improvements and additions to the plant. The firm of Lizarraga
Hermanos was well aware of the nature and extent of these improvements.
interest but that they were unable to agree "as to the true present value of the said interest;"
they did agree, however, upon the method of fixing and determining such value by appointing When the plaintiffs mother died, defendant came forward with a proposal to buy the heirs
appraisers for this purpose. It was the duty of the appraisers to hear the respective claims of the portion of the property. In consideration that the plaintiff should shorten the term of his lease to
the extent stated, the defendant agreed to pay him the value of all betterments that he had made
one and the other party relative to the value and assets of the business, "and in accordance with
on the land and furthermore to purchase from him all that belonged to him personally on the
the proof adduced relative to said values to fix and determine the same for the purposes of the land. The plaintiff agreed to this.
purchase and sale above mentioned." They did not say for the purpose of a sale to be made in
the future. Is the language, "for the purposes of the purchase and sale above mentioned" any On the ensuing instrument made, no reference was made to the surrender of the plaintiffs rights
as lessee, except in fixing the date when the lease should end; nor is anything said concerning
the less significant or controlling than that relied upon by the plaintiff found in the first and fifth the improvements which the plaintiff had placed. At the same time the promise of the defendant
paragraph? When the parties used this language they had in mind the purchase and sale which to compensate for him for the improvements was wanting. Accordingly, the representative of the
they had just made. According to the ordinary and well-understood use of the words "purchase" defendant explained that this was unnecessary in view of the confidence existing between the
and "sale" they mean, in the absence of any expression to limit their significance, a
transmutation of property from one party to another in consideration of some price or On the part of the defendant it was claimed that the agreement with respect to compensating the
recompense in value; a transmission of property by a voluntary act or agreement, founded on a plaintiff for improvements and other things was never in fact made.

valuable consideration; divesting the title out of the vendor and vesting it in the vendee. Again, Issue:
not only was the title of the plaintiff's interest vested in the defendant on the execution of the 1. Whether or not the lessee may contest the validity of a written contract with oral evidence
contract of May 3 but the possession of that interest was also then transferred to the defendant. 2. Whether or not the appreciation value can be used to determine the price

(Art. 1462, Civil Code; Uy Piaoco vs. McMicking, 10 Phil. Rep., 286.)
1. Yes. In case of a written contract of lease, the lessee may prove an independent verbal
13. wa ko kahanap ug digest ani sorry
agreement on the part of the landlord to put the leased premises in a safe condition. The verbal
contract which the plaintiff has established in this case is therefore clearly independent of the Petitioners failed to prove any of the instances mentioned in Articles 1355 and 1470 of the Civil
main contract of conveyance, and evidence of such verbal contract is admissible under the Code which would invalidate, or even affect, the Deeds of Sale. Indeed, there is no requirement
that the price be equal to the exact value of the subject matter of sale. All the
doctrine above stated. In the case before us the written contract is complete in itself; the oral
respondents believed that they received the commutative value of what they gave.
agreement is also complete in itself, and it is a collateral to the written contract, notwithstanding
the fact that it deals with related matters.
18. Manila Metal Container Corporation vs Philippine National Bank
3. Yes. The stipulation with respect to the appraisal of the property did not create a
suspensive condition. The true sense of the contract evidently was that the defendant [GR No. 166862, December 20, 2006]
would take over the movables and the improvements at an appraised valuation, and
the defendant obligated itself to promote the appraisal in good faith. As the defendant
partially frustrated the appraisal, it violated a term of the contract and made itself liable
for the true value of the things contracted about, as such value may be established in
the usual course of proof. Furthermore, an unjust enrichment of the defendant would Callejo, Sr., J.:
result from allowing it to appropriate the movables without compensating the plaintiff
15. wan a pud, basaha nalng ang fulltext maba lang man
Petitioner was the owner of 8,015 square meters of parcel of land located in Mandaluyong
City, Metro Manila. To secure a P900,000.00 loan it had obtained from respondent Philippine
16. wa pud
National Bank, petitioner executed a real estate mortgage over the lot. Respondent PNB later
granted petitioner a new credit accommodation. On August 5, 1982, respondent PNB filed a
17. Spouses Buenaventura vs. CA petition for extrajudicial foreclosure of the real estate mortgage and sought to have the property
sold at public auction. After due notice and publication, the property was sold at public action
where respondent PNB was declared the winning bidder. Petitioner sent a letter to PNB,
requesting it to be granted an extension of time to redeem/repurchase the property. Some PNB
personnel informed that as a matter of policy, the bank does not accept partial redemption.
Facts: Sought to be declared null and void ab initio are certaindeeds of sale of real property Since petitioner failed to redeem the property, the Register of Deeds cancelled TCT No. 32098
executed by defendant parents Leonardo Joaquin and Feliciana Landrito in favor of their co- and issued a new title in favor of PNB.
defendant children. The petitioners contend that there was no actual valid consideration and that
Meanwhile, the Special Asset Management Department (SAMD) had prepared a
assuming that there was considerationin the sums reflected the properties are more than three- statement of account of petitioners obligation. It also recommended the management of PNB to
fold times more valuable than the small sums appearing therein. The RTC ruled in favor of the allow petitioner to repurchase the property for P1,574,560.oo. PNB rejected the offer and
defendants and dismissed the case. RTCs ruling was affirmed by CA. Hence the appeal. recommendation of SAMD. It instead suggested to petitioner to purchase the property
for P2,660,000.00, in its minimum market value. Petitioner declared that it had already agreed to
SAMDs offer to purchase for P1,574,560.47 and deposited a P725,000.00.
Issue:Whether or not there was a valid consideration in the deeds of sale
Held: If there is a meeting of the minds of the parties as to the price, the contract of sale is valid, Whether or not petitioner and respondent PNB had entered into a perfected contract for
despite the manner of payment, or even the breach of that manner of payment. If the real price petitioner to repurchase the property for respondent.
is not stated in the contract, then the contract of sale is valid but subject to reformation.

Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a
contract, unless there has been fraud, mistake or undue influence. Ruling:

Article 1470 of the Civil Code further provides:Gross inadequacy of price does not affect a The SC affirmed the ruling of the appellate court that there was no perfected contact of
contract of sale, except as may indicate a defect in the consent, or that the parties really sale between the parties.
intended a donation or some other act or contract.
A contract is meeting of minds between two persons whereby one binds himself, with Whether or not the partial payment constitutes an earnestmoney as manifested in Article 1482 of
respect to the other, to give something or to render some service. Under 1818 of the Civil Code, the Civil Code
there is no contract unless the following requisites concur:

1. Consent of the contracting parties; HELD:

2. Objection certain which is the subject matter of the contract; No. Article 1482 applies only to earnest money given in acontract of sale. It was apparent that
the earnest money in thecase at bar was given in lieu of a contract to sell. Unlike in acontract of
3. Cause of the obligation which is established.
sale, the ownership of the parcel of land was retainedby the Spouses Serrano and shall only be
Contract is perfected by mere consent which is manifested by the meeting of the offer and passed to Caguiat uponfull payment of the purchase price as evidenced by the
the acceptance upon the thing and causes which are to constitute the contract. Once perfected, receipt.Relatively, no Deed of Sale has been executed as proof of theintention of the parties to
the bind between other contracting parties and the obligations arising therefrom have the form of immediately transfer the ownership of the parcel of land. Spouses Serrano also retained
law between the parties and should be complied in good faith. The absence of any essential ownership of the certificate of title of the lot, thereby indicating no actual orconstructive delivery
element will negate the existence of a perfected contract of sale.
of the ownership of the property. Finally,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
The court ruled in Boston Bank of the Philippines vs Manalo:

A definite agreement as to the price is an essential element of a binding agreement to sell

personal or real property because it seriously affects the rights and obligations of the parties.
Price is an essential element in the formation of a binding and enforceable contract of sale. The
fixing of the price can never be left to the decision of one of the contracting parties. But a price
fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale.

In the case at bar, the parties to the contract is between Manila Metal Container
Corporation and Philippine National Bank and not to Special Asset Management Department.
Since the price offered by PNB was not accepted, there is no contract. Hence it cannot serve as
a binding juridical relation between the parties.


G.R. No. 139173February 28, 2007

Sandoval-Gutierrez, J.:


Spouses Serrano agreed to sell in favor of respondent Caguiat aparcel of land at 1,500.00 per
square meter. Caguiat partiallypaid petitioners 100, 000.00 as evidenced by a receipt issuedby
petitioners indicating therein respondents promise to pay theremaining balance. Respondent,
after making known hisreadiness to pay the balance, requested from petitioners thepreparation
of the necessary Deed of Sale. When petitionerscancelled the transaction and intended to return
to Caguiat hispartial payment, respondent filed a complaint for specificperformance and
damages. The trial court relying on Article 1482of the Civil Code ruled that the payment of 100,
000.00 beingan earnest money signified the perfection of the contract of sale. The Court of
Appeals denied petitioners motion forreconsideration in affirmation of the lower courts decision.