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G.R. No.

126444 December 4, 1998

QUIJADA vs. COURT OF APPEALS

FACTS:

Petitioners are the children of the late Trinidad who inherited from the same from Pedro a
two-hectare parcel of land subject of this case.

The said land was the subject of a conditional deed of donation executed by Trinidad, with
her sisters and brother, in favor of the municipality based on the condition that it shall be
used as part of the campus of the proposed provincial high school.

However, Trinidad sold the half of the said land to respondent Mondejar. She then verbally
sold the other half to him without a deed of sale, evidenced solely by receipts of payment.

The proposed provincial high school failed to materialize. For this reason, the Sangguniang
Bayan of the municipality enacted a resolution reverting land donated back to the donors.

Then, Mondejar sold portions of the land to other persons.

The petitioners filed a complaint alleging therein that their deceased mother never
disposed of the property and that at the time of the alleged sale the land still belongs to the
municipality, hence, the supposed sale is null and void.

Respondents claimed otherwise and averred that petitioners action is barred by laches.

The court a quo ordered judgment in favor of the petitioners. But this was reversed by the
Court of Appeals (CA) when appealed on the ground that the sale made by Trinidad to
Mondejar was valid as the former retained an inchoate interest on the lots by virtue of the
automatic reversion clause in the deed of donation

Hence, this petition.

ISSUES:

1. WON the sale of the subject property is void

2. WON the petitioners' case is barred by laches.

HELD:

The Court AFFIRMED the decision of the CA.


On Issue No. 1

No.

Sale, being a consensual contract, is perfected by mere consent, which is manifested the
moment there is a meeting of the minds as to the offer and acceptance thereof on 3
elements: subject matter, price and terms of payment of the price.

Ownership by the seller on the thing sold at the time of the perfection of the contract of sale
is not an element for its perfection. What the law requires is that the seller has the right to
transfer ownership at the time the thing sold is delivered. Perfection per se does not
transfer ownership which occurs upon the actual or constructive delivery of the thing sold.
A perfected contract of sale cannot be challenged on the ground of non-ownership on the
part of the seller at the time of its perfection.

Nowhere in Article 1409 (4) which provide that the properties of a municipality, whether it
be those for public use or its patrimonial property are outside the commerce of men.

Hence, the sale is still valid.

On Issue No. 2

No.

Petitioners' action is not yet barred thereby. Laches presupposes failure or neglect for an
unreasonable and unexplained length of time, to do that which, by exercising due diligence,
could or should have been done earlier. Their cause of action to quiet title commenced only
when the property reverted to the donor and/or his successors-in-interest.

The time of sale made by Trinidad cannot be the reckoning point as to when petitioners'
cause of action arose. They had no interest over the property at that time except under the
deed of donation. Moreover, petitioners had previously filed an ejectment suit against
private respondents only that it did not prosper on a technicality.

Hernando R. Penalosa vs. Severino Santos

G.R. No. 133749 August 23, 2001

Facts:

Severino sold his property to henry. Henry applied for a loan with philam life. As It was already approved
pending the submission of certain documents such as the owners duplicate of transfer certificate of title
which is in possession of severino.

Henry already took possession of the property in question after ejectment of the lessees. He also paid an
ernest money of 300,000 under the premise that it shall be forfeited in favor of severino in case of
nonpayment.

Severino now claims ownership over the property claiming that henry did not pay for the property,
therefore there was no sale to speak of.

Issue: whether or not there is a contract of sale perfected in this case.

Held: there was a perfected contract of sale due to the second deed of sale.

The basic characteristic of an absolutely simulated or fictitious contract is that the apparent contract is not
really desired or intended to produce legal effects or alter the juridical situation of the parties in any way. 30
However, in this case, the parties already undertook certain acts which were directed towards fulfillment
of their respective covenants under the second deed, indicating that they intended to give effect to their
agreement.

Further, the fact that Severino executed the two deeds in question, primarily so that petitioner could eject
the tenant and enter into a loan/mortgage contract with Philam Life, is to our mind, a strong indication that
he intended to transfer ownership of the property to petitioner. For why else would he authorize the latter
to sue the tenant for ejectment under a claim of ownership, if he truly did not intend to sell the property to
petitioner in the first place? Needless to state, it does not make sense for Severino to allow petitioner to
pursue the ejectment case, in petitioner's own name, with petitioner arguing that he had bought the
property from Severino and thus entitled to possession thereof, if petitioner did not have any right to the
property.

Also worth noting is the fact that in the case filed by Severino's tenant against Severino and petitioner in
1989, assailing the validity of the sale made to petitioner, Severino explicitly asserted in his sworn answer
to the complaint that the sale was a legitimate transaction. He further alleged that the ejectment case filed
by petitioner against the tenant was a legitimate action by an owner against one who refuses to turn over
possession of his property.

It should be emphasized that the non-appearance of the parties before the notary public who notarized
the deed does not necessarily nullify nor render the parties' transaction void ab initio. We have held
previously that the provision of Article 1358 of the New Civil Code on the necessity of a public document
is only for convenience, not for validity or enforceability. Failure to follow the proper form does not
invalidate a contract. Where a contract is not in the form prescribed by law, the parties can merely compel
each other to observe that form, once the contract has been perfected. 35 This is consistent with the basic
principle that contracts are obligatory in whatever form they may have been entered into, provided all
essential requisites are present.3

The elements of a valid contract of sale under Art. 1458 of the Civil Code are: (1) consent or meeting of
the minds; (2) determinate subject matter; and (3) price certain in money or its equivalent. 37 In the instant
case, the second deed reflects the presence of all these elements and as such, there is already a
perfected contract of sale.

The non-payment of the contract price merely results in a breach of contract for non-performance and
warrants an action for rescission or specific performance under Article 1191 of the Civil Code.

Be that as it may, we agree with petitioner that although the law allows rescission as a remedy for breach
of contract, the same may not be availed of by respondents in this case. To begin with, it was Severino
who prevented full payment of the stipulated price when he refused to deliver the owner's original
duplicate title to Philam Life. His refusal to cooperate was unjustified, because as Severino himself
admitted, he signed the deed precisely to enable petitioner to acquire the loan. He also knew that the
property was to be given as security therefor. Thus, it cannot be said that petitioner breached his
obligation towards Severino since the former has always been willing to and could comply with what was
incumbent upon him.

In sum, the only conclusion which can be deduced from the aforesaid circumstances is that ownership of
the property has been transferred to petitioner.

WHEREFORE, the petition is GRANTED.

PROVINCE OF CEBU, Petitioner, vs. HEIRS OF RUFINA MORALES, NAMELY: FELOMINA V.


PANOPIO,NENITA VILLANUEVA, ERLINDA V. ADRIANO and CATALINA V. QUESADA,
Respondents.

Facts: Province of Cebu leased in favor of Rufina Morales a 210-square meter lot. Petitioner
donated thelot occupied by Morales to the City of Cebu. The city, then, sold the subject lot at
public auction. Thehighest bidder for the said lot was Hever Bascon but Morales was
allowed to match the highest bid sinceshe had a preferential right to the lot as actual
occupant thereof. Morales thus paid the required depositand partial payment for the lot.
Later, the subject lot was returned to petitioner and registered in itsname. Morales died and
apart from the deposit and down payment, she was not able to make any otherpayments on
the balance of the purchase price for the lot. Now the surviving heirs of Morales are
askingfor the formal conveyance of subject lot, in accordance with the award earlier made
by the City of Cebu.They also consigned with the court the amount representing the balance
of the purchase price whichpetitioner allegedly refused to accept.

Issue: can respondents still tender payment of the full purchase price? Yes.

Held: Article 1592 of the Civil Code pertinently provides that In the sale of immovable
property, eventhough it may have been stipulated that upon failure to pay the price at the
time agreed upon therescission of the contract shall of right take place,the vendee may
pay,even after the expiration of theperiod,as long as no demand for rescission of the
contract has been made upon him either judiciallyor by notarial act. After the demand, the
court may not grant him a new term.Thus, respondents could still tender payment of the
full purchase price as no demand for rescission hadbeen made upon them, either judicially
or through notarial act. While it is true that it took a long timefor respondents to bring suit
for specific performance and consign the balance of the purchase price, it isequally true
that petitioner or its predecessor did not take any action to have the contract of
salerescinded. Article 1592 allows the vendee to pay as long as no demand for rescission
has been made.
The consignation of the balance of the purchase price before the trial court thus operated
as fullpayment, which resulted in the extinguishment of respondents obligation under the
contract of sale.

Mate v. CA

Facts: On October 6, 1986, Josefina Josie Rey and private respondent Tan went to the
residence of petitioner in Tacloban City. Josie solicited his help to stave her off her
prosecution by respondent for violation of B. P. 22. Josie asked petitioner to cede to
respondent his 3 lots. Josie explained to him that he was in no danger of losing his property
as they will be redeemed by her own funds. After a long discussion, petitioner agreed to
execute a fictitious deed of sale with right to repurchase after 6 months. Josie gave
petitioner 2 post-dated checks to be used in redeeming the property. However, the checks
were both dishonoured. Realizing that he was swindled, he sent a telegram to Josie, and
looked for her in Manila, but she was nowhere to be found. Petitioner filed a criminal case
against Josie for violation of B. P. 22, but the case was archived since Josie could not be
located. Petitioner filed a case for annulment of contract with damages against Josie and
respondent. Josie was declared in default and the case proceeded against respondent. Both
the trial court and the Court of Appeals upheld the validity of the sale.

Issue: Whether the sale was null and void for want of consideration

Held: It is plain that consideration existed at the time of the execution of the deed of sale
with right of repurchase. It is not only appellant's kindness to Josefina, being his cousin, but
also his receipt of P420,000.00 from her which impelled him to execute such contract.
Furthermore, while petitioner did not receive the P1.4 Million purchase prices from
respondent Tan, he had in his possession a postdated check of Josie Rey in an equivalent
amount precisely to repurchase the two lots on or before the sixth month. Unfortunately,
the two checks issued by Josie Rey were worthless. Both were dishonored upon
presentment by petitioner with the drawee banks. However, there is absolutely no basis for
petitioner to file a complaint against private respondent Tan and Josie Rey to annul the
pacto de retro sale on the ground of lack of consideration, invoking his failure to encash the
two checks. Petitioner's cause of action was to file criminal actions against Josie Rey under
B.P. 22, which he did. The filing of the criminal cases was a tacit admission by petitioner
that there was a consideration of the pacto de retro sale.

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