Sales and Lease Finals Cases
Sampaguita Pictures, Inc. vs. Jalwindor Manufacturers,
Inc.
93 SCRA 420
October 1979
FACTS:
Both the plaintiff-appellant Sampaguita Pictures Inc.
(Sampaguita) and defendant-appellee Jalwindor Manufacturers
Inc. (Jalwindor) were domestic corporations duly organized
under the Philippine laws. Sampaguita leased to Capitol 300
Inc. (Capitol) the roof deck of its building with the agreement
that all permanent improvements Capitol will make on said
property shall belong to Sampaguita without any part on the
latter to reimburse Capitol for the expenses of said
improvements. Shortly, Capitol purchased on credit from
Jalwindor glass and wooden jalousies, which the latter itself
delivered and installed in the leased premises, replacing the
existing windows.
ISSUE:
Was there a delivery made and, therefore, a transfer of
ownership of the thing sold?
Held:
Ownership is not transferred by perfection of the contract but
by delivery, either actual or constructive. Payment of the
purchase price is not essential to the transfer of ownership as
long as the property sold has been delivered. Ownership is
acquired from the moment the thing sold was delivered to
vendee, as when it is placed in his control and possession.
Southwestern Sugar & Molasses Co. vs. Atlantic Gulf &
Pacific Company
97 Phil 247
June 1955
FACTS:
On March 24, 1953, defendant-appellant Atlantic granted
plaintiff-appellee Southwestern an option period of ninety days
to buy the formers barge No. 10 for the sum of P30,000. On
May 11 of the same year, Southwestern Company
communicated its acceptance of the option to Atlantic through
a letter, to which the latter replied that their understanding was
that the "offer of option" is to be a cash transaction and to be
effected "at the time the lighter is available." On June 25,
Atlantic advised the Southwestern Company that since there is
still further work for it, the barge could not be turned over to the
latter company.
ISSUE:
Is Atlantic liable for specific performance and to pay damages
in favor of Southwestern Company?
Held:
The Supreme Court reversed the trial courts decision applying
Article 1479 of the new Civil Code. The Court reiterated that
"an accepted unilateral promise" can only have a binding effect
if supported by a consideration, which means that the option
can still be withdrawn, even if accepted, if said option is not
supported by any consideration.
Serra vs. Court of Appeals, and RCBC
229 SCRA 60
January 1994
FACTS:
Petitioner Federico Serra, who is the owner of a 374 square
meter parcel of land located at Masbate, Masbate, and private
respondent Rizal Commercial Banking Corporation (RCBC)
entered into a "Contract of Lease with Option to Buy" in May
25, 1975 which provided that Serra will lease the subject land
to RCBC for a period of 25 years from June 1, 1975 to June 1,
2000, that the RCBC has the option to purchase the same at
P210.00 per square meter within a period of 10 years.
ISSUE:
Was there a valid contract of lease with option to buy between
the parties? Was there a consideration distinct from the price
to support the option given to RCBC?
Held:
The court ruled that the contract of "lease with option to buy"
between the petitioner and respondent bank is valid, effective
and enforceable, the price being certain and that there was a
consideration distinct from the price to support the option given
to the lease.
Roman vs. Grimalt
6 Phil 96
April 1906
FACTS:
In between the 13th to the 23d of June, 1904, petitioner Pedro
Roman, the owner, and respondent Andres Grimalt, the
purchaser, verbally agreed upon the sale of the schooner
Santa Marina. In his letter on June 23, Grimalt agreed to buy
the vessel and offered to pay in three installments of P500
each on July 15, September 15, and November 15, provided
the title papers to the vessel were in proper form.
ISSUE:
Who should bear the risk of loss?
Held:
The sale of the schooner was not perfected and the purchaser
did not consent to the execution of the deed of transfer for the
reason that the title of the vessel was in the name of one Paulina
Giron and not in the name of Pedro Roman, the alleged owner. If
no contract of sale was actually executed by the parties the loss
of the vessel must be borne by its owner and not by a party who
only intended to purchase it and who was unable to do so on
account of failure on the part of the owner to show proper title to
the vessel and thus enable them to draw up the contract of sale.
EQUATORIAL REALTY V. MAYFAIR (November 21, 1996)
FACTS:
Petitioner Carmelo and Bauermann Inc. leased its parcel of land
with 2-storey building to respondent Mayfair Theater Inc.
They entered a contract which provides that if the LESSOR
should desire to sell the leased premises, the LESSEE shall be
given 30-days exclusive option to purchase the same.
Carmelo informed Mayfair that it will sell the property to
Equatorial. Mayfair made known its interest to buy the property
but only to the extent of the leased premises.
Notwithstanding Mayfairs intention, Carmelo sold the property to
Equatorial.
ISSUE:
WON the sale of the property to Equatorial is valid.
Held:
An option is a contract granting a privilege to buy or sell within
an agreed time and at a determined price. It is a separate and
distinct contract from that which the parties may enter into upon
the consummation of the option. It must be supported by
consideration. In the instant case, the right of first refusal is an
integral part of the contracts of lease. The consideration is built
into the reciprocal obligations of the parties
Norkis Distributors Inc. vs. Court of Appeals, and Nepales
193 SCRA 694
February 1991
FACTS:
On September 20, 1979, private respondent Alberto Nepales
bought from the Norkis Distributors, Inc. (Norkis) in its Bacolod
branch a brand new Yamaha Wonderbike motorcycle Model
YL2DX with Engine No.L2-329401K Frame No.NL2-0329401,
color maroon, which was then on display in the Norkis
showroom.
ISSUE:
Who should bear the risk of loss?
Held:
The issuance of a sales invoice does not prove transfer of
ownership of the thing sold to the buyer. An invoice is nothing
more than a detailed statement of the nature, quantity and cost
of the thing sold and has been considered not a bill of sale.
POWER COMMERCIAL AND INDUSTRIAL CORPORATION,
petitioner, vs. COURT OF APPEALS, SPOUSES
REYNALDO and ANGELITA R. QUIAMBAO and
PHILIPPINE NATIONAL BANK, respondents.
Facts:
Petitioner Power Commercial & Industrial Development
Corporation, an industrial asbestos manufacturer, needed a
bigger office space and warehouse for its products. For this
purpose, on January 31, 1979, it entered into a contract of sale
with the spouses Reynaldo and Angelita R. Quiambao, herein
private respondents. The contract involved a 612-sq. m. parcel
of land covered by Transfer Certificate of Title No. S-6686
located at the corner of Bagtican and St. Paul Streets, San
Antonio Village, Makati City. The parties agreed that petitioner
would pay private respondents P108,000.00 as down payment,
and the balance of P295,000.00 upon the execution of the
deed of transfer of the title over the property. Further, petitioner
assumed, as part of the purchase price, the existing mortgage
on the land. In full satisfaction thereof, he paid P79,145.77 to
Respondent Philippine National Bank (PNB for brevity).
Issue:
WON there was a substantial breach of the contract between
the parties warranting rescission
WON there was a mistake in payment made by petitioner,
obligating PNB to return such payments
Held:
In order that this symbolic delivery may produce the effect of
tradition, it is necessary that the vendor shall have had such
control over the thing sold that xxx its material delivery could
have been made. It is not enough to confer upon the purchaser
the ownership and the right of possession. The thing sold must
be placed in his control. When there is no impediment whatever
to prevent the thing sold passing into the tenancy of the
purchaser by the sole will of the vendor, symbolic delivery
through the execution of a public instrument is sufficient. But if,
notwithstanding the execution of the instrument, the purchaser
cannot have the enjoyment and material tenancy of the thing
and make use of it himself or through another in his name,
because such tenancy and enjoyment are opposed by the
interposition of another will, then fiction yields to reality -- the
delivery has not been effected.
DOMINADOR DIZON, doing business under the firm name
"Pawnshop of DominadorDizon", petitioner, vs.LOURDES
G. SUNTAY
Facts:
"Plaintiff is the owner of a three-carat diamond ring valued at
P5,500.00. On June 13, 1962, the plaintiff and Clarita R. Sison
entered into a transaction wherein the plaintiff's ring was
delivered to Clarita R. Sison for sale on commission. Upon
receiving the ring, Clarita R. Sison executed and delivered to
the plaintiff the receipt. After the lapse of a considerable time
without Clarita R. Sison having returned to the plaintiff the
latter's ring, the plaintiff made demands on Clarita R. Sison for
the return of her ring but the latter could not comply with the
demands because, without the knowledge of the plaintiff, on
June 15, 1962 or three days after the ring above-mentioned
was received by Clarita R. Sison from the plaintiff, said ring
was pledged by Melia Sison, niece of the husband of Clarita R.
Sison, evidently in connivance with the latter, with the
defendant's pawnshop for P2,600.00. When the plaintiff found
out that Clarita R. Sison pledged, she took steps to file a case
of estafa against the latter with the fiscal's office. Subsequently
thereafter, the plaintiff, through her lawyer, wrote a letter ...
dated September 22, 1962, to the defendant asking for the
delivery to the plaintiff of her ring pledged with defendant's
pawnshop under pawnshop receipt serial-B No. 65606, dated
June 15, 1962 ... . Since the defendant refused to return the
ring, the plaintiff filed the present action with the Court of First
Instance of Manila for the recovery of said ring, with P500.00
as attorney's fees and costs.
Issue: who has the right of the subject property?
Held:
The controlling provision is Article 559 of the Civil Code. It reads
thus: 'The possession of movable property acquired in good faith
is equivalent to a title. Nevertheless, one who has lost any
movable or has been unlawfully deprived thereof may recover it
from the person in possession of the same. If the possessor of a
movable lost of which the owner has been unlawfully deprived,
has acquired it in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price paid therefor.
EDCA PUBLISHING & DISTRIBUTING CORP., petitioner,
vs. THE SPOUSES LEONOR and GERARDO SANTOS,
doing business under the name and style of "SANTOS
BOOKSTORE," and THE COURT OF APPEALS,
Facts:
This case arose when on October 5, 1981, a person identifying
himself as Professor Jose Cruz placed an order by telephone
with the petitioner company for 406 books, payable on delivery.
EDCA prepared the corresponding invoice and delivered the
books as ordered, for which Cruz issued a personal check
covering the purchase price of P8,995.65. 5 On October 7,
1981, Cruz sold 120 of the books to private respondent Leonor
Santos who, after verifying the seller's ownership from the
invoice he showed her, paid him P1,700.00. 6
Issue:
WON the petitioner has been unlawfully deprived of the books
because the check issued by the impostor in payment therefor
was dishonored.
Held:
Non-payment only creates a right to demand payment or to
rescind the contract, or to criminal prosecution in the case of
bouncing checks. But absent the stipulation above noted,
delivery of the thing sold will effectively transfer ownership to
the buyer who can in turn transfer it to another.
Actual delivery of the books having been made, Cruz acquired
ownership over the books which he could then validly transfer
to the private respondents. The fact that he had not yet paid for
them to EDCA was a matter between him and EDCA and did
not impair the title acquired by the private respondents to the
books.
Layug vs IAC
Facts:
Involved in the appellate proceedings at bar is a contract for
the purchase on installments by Antonio Layug of twelve (12)
lots owned by Rodrigo Gabuya, situated at Barrio Bara-as,
Iligan City
Layug paid the first two annual installments, totalling
P80,000.00. But he failed to pay the last installment of
P40,000.00, which fell due on October 5, 1980. Gabuya made
several informal demands for payment; and when all these
proved unavailing, he made a formal written demand therefor
under date of April 18, 1981 which was sent to and received by
Layug by registered mail. When this, too, went unheeded,
Gabuya finally brought suit in the Court of First Instance of
Lanao del Norte for the annulment of his contract with Layug
and for the recovery of damages
Issue:
WON the contract of conditional sale cancelled, and forfeited in
Gabuya's favor all payments made by Layug
Held:
R.A. 6552 governs sales of real estate on installments. It
recognizes the vendor's right to cancel such contracts upon
failure of the vendee to comply with the terms of the sale, but
imposes, chiefly for the latter's protection, certain conditions
thereon.
A. A. ADDISON, plaintiff-appellant, vs.MARCIANA FELIX
and BALBINO TIOCO, defendants-appellees.
Facts:
By a public instrument dated June 11, 1914, the plaintiff sold to
the defendant Marciana Felix, with the consent of her husband,
the defendant Balbino Tioco, four parcels of land, described in
the instrument. The defendant Felix paid, at the time of the
execution of the deed, the sum of P3,000 on account of the
purchase price, and bound herself to pay the remainder in
installments, the first of P2,000 on July 15, 1914, and the
second of P5,000 thirty days after the issuance to her of a
certificate of title under the Land Registration Act, and further,
within ten years from the date of such title P10, for each
coconut tree in bearing and P5 for each such tree not in
bearing, that might be growing on said four parcels of land on
the date of the issuance of title to her, with the condition that
the total price should not exceed P85,000. It was further
stipulated that the purchaser was to deliver to the vendor 25
per centum of the value of the products that she might obtain
from the four parcels "from the moment she takes possession
of them until the Torrens certificate of title be issued in her
favor."
Issue: WON Was there a delivery made and, therefore, a
transfer of ownership of the thing sold?
Held:
it is enough to confer upon the purchaser the ownership and the
right of possession. The thing sold must be placed in his control.
When there is no impediment whatever to prevent the thing sold
passing into the tenancy of the purchaser by the sole will of the
vendor, symbolic delivery through the execution of a public
instrument is sufficient. But if, notwithstanding the execution of
the instrument, the purchaser cannot have the enjoyment and
material tenancy of the thing and make use of it himself or
through another in his name, because such tenancy and
enjoyment are opposed by the interposition of another will, then
fiction yields to reality the delivery has not been effected.
TEN FORTY REALTY AND DEVELOPMENT CORP.,
Represented by its President, VERONICA G. LORENZANA,
petitioner, vs. MARINA CRUZ, respondent.
Facts
A complaint for ejectment was filed by [Petitioner Ten Forty
Realty and Development Corporation] against x xx
[Respondent Marina Cruz] before the Municipal Trial Court in
Cities (MTCC) of Olongapo City, docketed as Civil Case 4269,
which alleged that: petitioner is the true and absolute owner of
a parcel of lot and residential house situated in #71 18th
Street, E.B.B. Olongapo City, having acquired the same on
December 5, 1996 from Barbara Galino by virtue of a Deed of
Absolute Sale; the sale was acknowledged by said Barbara
Galino through a 'Katunayan'; payment of the capital gains tax
for the transfer of the property was evidenced by a Certification
Authorizing Registration issued by the Bureau of Internal
Revenue; petitioner came to know that Barbara Galino sold the
same property on April 24, 1998 to Cruz, who immediately
occupied the property and which occupation was merely
tolerated by petitioner; on October 16, 1998, a complaint for
ejectment was filed with the Barangay East Bajac-Bajac,
Olongapo City but for failure to arrive at an amicable
settlement, a Certificate to File Action was issued; on April 12,
1999 a demand letter was sent to [respondent] to vacate and
pay reasonable amount for the use and occupation of the
same, but was ignored by the latter; and due to the refusal of
[respondent] to vacate the premises, petitioner was
constrained to secure the services of a counsel for an agreed
fee of P5,000.00 as attorneys fee and P500.00 as appearance
fee and incurred an expense of P5,000.00 for litigation.
Issue: WON petitioner should be declared the rightful owner of
the property.
Held:
This Court has held that the execution of a public instrument
gives rise only to a prima facie presumption of delivery. Such
presumption is destroyed when the delivery is not effected
because of a legal impediment. Pasagui v. Villablanca had
earlier ruled that such constructive or symbolic delivery, being
merely presumptive, was deemed negated by the failure of the
vendee to take actual possession of the land sold.
Carbonell vs. Court of Appeals, and Poncio
69 SCRA 99
January 1976
FACTS:
On January 27, 1955, respondent Jose Poncio executed a
private memorandum of sale of his parcel of land with
improvements situated in San Juan, Rizal in favor of petitioner
Rosario Carbonell who knew that the said property was at that
time subject to a mortgage in favor of the Republic Savings Bank
(RSB) for the sum of P1,500.00. Four days later, Poncio, in
another private memorandum, bound himself to sell the same
property for an improved price to one Emma Infante for the sum
of P2,357.52, with the latter still assuming the existing mortgage
debt in favor of the RSB in the amount of P1,177.48. Thus, in
February 2, Poncio executed a formal registerable deed of sale
in her (Infante's) favor. So, when the first buyer Carbonell saw
the seller Poncio a few days afterwards, bringing the formal
deed of sale for the latter's signature and the balance of the
agreed cash payment, she was told that he could no longer
proceed with formalizing the contract with her (Carbonell)
because he had already formalized a sales contract in favor of
Infante.
Issue:
Who has the superior right over the subject property?
Held:
The buyer of realty must act in good faith in registering his
deed of sale to merit the protection of the second paragraph of
Article 1544 of the New Civil Code. Where the first buyer was
not aware - and could not have been aware - of any sale to
another person as there was no such sale, the buyer's prior
purchase of the land was made in good faith. The annotation of
the adverse claim by the first buyer in good faith is deemed to
have been equivalent to the registration required under Article
1544. What is registered is not the document but the right of
ownership over the property.
Dagupan Trading vs. Macam
14 SCRA 99
May 1965
FACTS:
Sammy Maron and his seven brothers and sisters were pro-
indiviso owners of a parcel of unregistered land located in barrio
Parayao, Binmaley, Pangasinan. In 1955, while their application
for registration of said land under Act No. 496 was pending, they
executed, on June 19 and on September 21, two deeds of sale
conveying the property to herein respondent Rustico Macam
who thereafter took possession of the property and made
substantial improvements upon it. On October 14, 1955, OCT
No. 6942 covering the land was issued in the name of the
Marons, free from all liens and encumbrances.
Issue:
Who has the superior right over the one-eight portion of the
subject property?
Held:
Where one sale before registration of land and the other an
execution sale after registration of land, what should determine
the issue is the provision of the last paragraph, sec. 35, Rule
39, Rules of Court to the effect that, upon the execution and
delivery of the final certificate of sale in favor of the purchaser
of land sold in an execution sale, such purchaser " shall be
substituted to and acquire all the rights, title, interest and claim
of the judgment debtor to the property as of the time of the
levy.
G.R. No. L-48322 April 8, 1987
FELIPE DAVID and ANTONIA G. DAVID, petitioners,
vs.
EULOGIO BANDIN (substituted by his legal heirs, namely:
JUANA SILVERIO, JOSE, GABRIEL, ANICETA, VIRGINIA
and FELIX, all surnamed Bandin); GREGORIO BANDIN,
RAYMUNDA BANDIN, VALENTIN BRIONES, SOFIO
BRIONES and AGAPITA RAMOS. respondents.
Facts:
These petitions, which were consolidated by resolution of this
Court dated February 20, 1980, stemmed from a complaint
filed by the herein respondents with the Court of First Instance
of Rizal Branch VII, Pasay City, on June 14, 1963, for the
recovery and partition of property. The complaint was
amended twice to reflect additional pertinent and material
facts, such as transfers, partitions, subdivisions and
registration of portions of the properties involved, and to bring
in other indispensable parties to the case.
ISSUES:
Whether or not private respondents' claim is barred by
prescription2. Whether or not petitioners were buyers in good
faith
Held:
The issue of good faith or bad faith of the buyer is relevant only
where the subject of the sale is registered land and the
purchaser is buying the same from the Registered Owner,
whose title to the land is clean. One who purchases an
unregistered land does so at his peril.
G.R. No. L-34500 March 18, 1988
MOISES OLIVARES and JUANITA T.
OLIVARES, petitioners-appellants,
vs.
THE HONORABLE CARLOS V. GONZALES as Judge of the
Court of First Instance of Iloilo (Branch VI), respondent
and JACINTO TUVILLA, CEFERINO TUVILLA, and JUAN
TUMABINI, respondents-appellees.
Facts:
Sometime in 1955, the Tuvillas executed a "Deed of Sale with
Right to Repurchase" in favor of respondent-appellee Juan
Tumabini over the Disputed Property in consideration of the
sum of P1,350.00. The document was duly acknowledged
before a Notary Public but was not recorded in the Registry of
Property.
Sometime in 1959, the Tuvillas executed a "Deed of Sale with
Pacto de Retro" over the Disputed Property in favor of
petitioners- appellants, Moises Olivares and Juanita T.
Olivares (the Olivareses, for short). This document was
acknowledged before a Notary Public and registered with the
Registry of Deeds. In 1966, the Tuvillas also executed in favor
of the Olivareses a "Deed of Absolute Sale" covering the
Disputed Property. Petitioners-appellants have been in
possession of the Disputed Property since 1959.
Issue:
Who has a better right?
Held:
It would be more in keeping with substantial justice if the
controversy between the parties be resolved on the merits
rather than on a procedural technicality in the light of the
express mandate of the rules that they be "liberally construed
in order to promote their object and to assist the parties in
obtaining just, speedy and inexpensive determination of
every action and proceeding.
Caram vs. Laureta G.R. No. L-28740 February 24, 1981
FERNANDEZ, J.:
On June 10, 1945, Marcos Mata conveyed a large tract of
agricultural land covered by OCT No. 3019 in favor of Claro
Laureta, plaintiff, the respondent herein. The deed of absolute
sale in favor of the plaintiff was not registered because it was not
acknowledged before a notary public or any other authorized
officer. Since June 10,1945, the plaintiff Laureta had been and is
in continuous, adverse and notorious occupation of said land.
On May 5, 1947, the same land covered by OCT No.3019 was
sold by Marcos Mata to defendant Fermin Z. Caram, Jr.,
petitioner herein.
Issue:
Whether or not the knowledge petitioner of a prior unregistered
sale of a titled property attributable to petitioner and equivalent in
law of registration of sale.
Held:
A buyer of real estate should exercise ordinary care in
purchasing land. The rule of caveat emptor requires the
purchaser to be aware of the supposed title of the vendor
and one who buys without checking the vendors title takes all
the risks and losses consequent to such failure.
Cruz vs. Cabaa
129 SCRA 656
June 1984
FACTS:
In June 1965, respondent Leodegaria Cabaa sold the subject
property to respondent spouses Teofilo Legaspi and Iluminada
Cabaa (spouses Legaspi) under their contract entitled Bilihang
Muling Mabibili which stipulated that Cabaa can repurchase
the land within one year from December 31, 1966. The said land
was not repurchased, however, so the spouses Legaspi took
possession of the said property.
Issue:
Who is the rightful owner of the subject property?
Held:
Knowledge gained by the first buyer of the second sale cannot
defeat the first buyer's right except where the second buyer
first registers in good faith the second sale ahead of the first.
Conversely, knowledge gained by the second buyer of the first
sale defeats his rights even if he is the first to register the
second sale, since such knowledge taints his prior registration
with bad faith.
Valdez, Jr. v. Court of Appeals, G.R. No. 132424 (May 2,
2006) Case Digest
Facts:
Valdez was the owner of a parcel of land where Fabella
consructed a house without any color of title whatsoever.
Valdez orally asked Fabella several times to vacate the property
but the latter stubbornly refused.
The parties were not able to settle the dispute amicably, which
lead to the filing of a complaint for unlawful detainer by Valdez
against Fabella.
The MTC ruled in favor of Valdez, which was affirmed by the
RTC. The CA, on the other hand, reversed the decision. It held
that Valdez failed to make a case for unlawful detainer because
they failed to show that they had given Fabella the right to
occupy the premises or that they had tolerated the possession of
the same, which is a requirement in unlawful detainer cases.
Issue:
Whether or not the allegations of the complaint clearly made out
a case for unlawful detainer.
Held:
In case of double sale of real property where both vendees
registered the sales with the Register of Deeds and each
produced their respective owner's duplicate copy of the
certificate of title to the property, Article 1544 is clear that a
prior right is accorded to the vendee who first recoded his right
in Good Faith over an immovable property.
Nuguid vs. Court of Appeals, and Guevarra
171 SCRA 213
March 1989
FACTS:
The deceased spouses Victorino and Crisanta dela Rosa
(spouses dela Rosa) were registered owners of a parcel of land
in Orani, Bataan, and covered by OCT No. 3778. On or about
May 4, 1931, Victorino dela Rosa (widowed by then) sold one-
half of the said property to Juliana Salazar for P95.00. This sale
between him and Salazar, though evidenced by a document,
was not registered. Nevertheless, Juliana Salazar constructed a
house on the lot she purchased immediately after the sale. On
March 10, 1964, petitioner spouses Diosdado Nuguid and
Marqiueta Venegas (spouses Nuguid) caused the registration of
a document entitled "Kasulatan ng Partihan at Bilihan"
(Kasulatan) dated June 6, 1961.
Issue:
Who is the rightful owner of the subject property?
Held:
An innocent purchaser for value is protected such when land
has already passed into the hands of an innocent purchaser for
value, reconveyance of the same can no longer be made. The
rule in case of double sale is that the disputed property being
immovable property, the ownership should belong to the
vendee who in good faith first recorded it in the Registry of
Property.
Radiowealth Finance Co. vs. Palileo
197 SCRA 245
May 1991
FACTS:
In April 1970, defendant spouses Enrique Castro and Herminio
R. Castro (spouse Castro) sold to herein respondent Manuelito
Palileo a parcel of unregistered coconut land in Surigao del
Norte. The sale is evidenced by a notarized Deed of Absolute
Sale, but the deed was not registered in the Registry of
Property for unregistered lands in the province of Surigao del
Norte. Since the execution of the deed of sale, Palileo who was
then employed in Lianga, Surigao del Sur, exercised acts of
ownership over the land through his mother Rafaela Palileo, as
administratrix or overseer. Manuelito Palileo has continuously
paid the real estate taxes on said land from 1971 until the
present.
Issue:
Who is the rightful owner of the subject property?
Held:
A person dealing with registered land is not required to go
behind the register to determine the condition of the property.
He is only charged with notice of the burdens on the property
which are noted on the face of the register or certificate of title.
However, Article 1544 does not apply where the second buyer
acquires the unregistered land at an execution sale, even if he
was ignorant of the prior sale made by his judgment debtor in
favour of the first buyer. The purchaser of an unregistered land
at a sheriffs execution sale only steps in the shoes of the
judgment debtor and merely acquires the latters interest in the
property sold as of the time the property was levied upon.
TAEDO V. CA (January 22, 1996)
FACTS:
Lazaro Taedo executed a deed of absolute sale in favor of
Ricardo Taedo and Teresita Barrera in which he conveyed a
parcel of land which he will inherit. Upon the death of his father
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
registered the last deed of sale in the registry of deeds in their
favor.
Ricardo later learned that Lazaro sold the same property to his
children through a deed of sale.
ISSUE:
WON the Taedo spouses have a better right over the property
against the children of Lazaro Taedo.
Held:
Ownership shall belong to the buyer who in good faith registers
it first in the registry of property. As between two purchasers,
the one who registered the sale in his favor has a preferred
right over the other who has not registered his title, even if the
latter is in actual possession of the immovable property. When
two deeds of sale for an inherited property which were
executed after the death of the decedent and after a deed of
extra-judicial settlement. And which said deeds of sale where
made on different dates, the ownership would vest in the deed
which was registered, even if the other deed is executed
earlier. The same rule applies even if actual possession is in
the vendee of the deed executed earlier.
Sps. Occena vs. Esponilla G. R. no. 156973 June 4, 2004
Facts:
After the death of the Tordesillas spouses, the lot was inherited
by their children Harod and Angela, and grandchildren Arnold
and Lilia. In 1951, the heirs executed a Deed of Pacto de Retro
Sale1 in favor of Alberta Morales covering the southwestern
portion of the lot in 1954, Arnold and Lilia executed a Deed of
Definite Sale of Shares, Rights, Interests and Participations2
over the same 748 sq. m. lot in favor of Alberta Morales.
Issue:
Whether or not the period of more than forty (40) years without
positive action taken by respondents, as well as by alberta
morales, to protect their interest can be considered laches and
thus their present action has prescribed
Held:
Mere registration is not enough; good faith must concur with
registration. To be entitled to priority, the second purchaser
must also have acted in good faith-one without knowledge of
the previous alienation by the vendor to another or must not
have been aware of the facts which should put him upon
inquiry to acquaint him with the defect or lack of title of his
vendor. Should he find out such circumstances, it would be
incumbent upon him to verify the extent of the occupants
possessory rights. Failure to take precautionary steps would
mean negligence on his part and would preclude him from
claiming or invoking the rights of a purchaser in good faith.
Moles vs. IAC
Jerry Moles(petitioner) bought from Mariano Diolosa owner of
Diolosa Publishing House a linotype printing
machine(secondhand machine). Moles promised Diolosa that
will pay the full amount after the loan from DBP worth
P50,000.00 will be released. Private respondent on return
issued a certification wherein he warrated that the machine
was in A-1 condition, together with other express warranties.
After the release of the of the money from DBP, Petitioner
required the Respondent to accomplish some of the
requirements. On which the dependant complied the
requirements on the same day.
Issue:
Whether there is an implied warranty of its quality or fitness.
Whether the hidden defects in the machine is sufficient to
warrant a rescission of the contract between the parties.
Held:
In the sale of a designated and specific article sold as
secondhand, there is no implied warranty as to its quality or
fitness for the purpose intended, at least where it is subject to
inspection at the time of the sale. On the other hand, there is
also authority to the effect that in a sale of a secondhand
articles there may be, under some circumstances, an implied
warranty of fitness for the ordinary purpose of the article sold
or for the particular purpose of the buyer. An exception to the
general rule is that an express warranty can be made by and
also be binding on the seller even in the sale of a secondhand
article. A redhibitory effect must be an imperfection or defect of
such nature as to engender a certain degree of importance in
order to warrant the rescission of the contract.
ENGINEERING AND MACHINERY CORP. VS. COURT OF
APPEALS
G.R. No. 52267 January 24, 1996
Facts:
Almeda and Engineering signed a contract, wherein
Engineering undertook to fabricate, furnish and install the air-
conditioning system in the latters building along Buendia
Avenue, Makati in consideration of P210,000.00. Petitioner
was to furnish the materials, labor, tools and all services
required in order to so fabricate and install said system. The
system was completed in 1963 and accepted by private
respondent, who paid in full the contract price.
This controversy arose from a Complaint for Damages and
Injunction with Preliminary Injunction/Restraining Order 4filed on
December 10, 1990 by herein respondent Angel S. Rodriguez
(Rodriguez), with the RTC, Branch 27, Lapu-lapu City, Cebu,
docketed as Civil Case No. 2365-L against the spouses
Agapita and Jose Catungal (the spouses Catungal), the
parents of petitioners.
Issue:
WON the noncompliance with a condition renders the contract
a failure
Held:
From the moment the contract is perfected, 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.
In accordance with Article 1545 of the Civil Code, one must
distinguish: failure to comply with a condition imposed on the
perfection of a contract results in the failure of the contract
while failure to comply with a condition imposed merely on the
performance of an obligation merely gives the other party the
option to either refuse to proceed with the sale or to waive the
condition. Moreover, where the so-called 'potestative condition'
is imposed not on the birth of the obligation but on its
fulfillment, only the condition is avoided, leaving unaffected the
obligation itself.

Almeda learned from the employees of NIDC of the defects of

the air-conditioning system of the building. Almeda spent for
the repair of the air-conditioning system. He now sues
Engineering for the refund of the repair.

Issue:

Whether the claim for refund was extinguished by prescription

Held:

Where there is an express warranty in the contract, the

prescriptive period is the one specified in the express warranty;
and in the absence of such period. The general rule on
rescission of contract, which is four years, shall apply.

G.R. No. 146839 March 23, 2011

ROLANDO T. CATUNGAL, JOSE T. CATUNGAL, JR.,

CAROLYN T. CATUNGAL and ERLINDA CATUNGAL-
WESSEL, Petitioners,
vs.
ANGEL S. RODRIGUEZ, Respondent.

LEONARDO-DE CASTRO, J.: