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SPS. TUMIBAY v. SPS.

LOPEZ
G.R. No. 171692, June 3, 2013

DOCTRINE: In a contract to sell, the seller retains ownership of the property until the buyer has
paid the price in full. A buyer who covertly usurps the seller's ownership of the property prior to
the full payment of the price is in breach of the contract and the seller is entitled to rescission
because the breach is substantial and fundamental as it defeats the very object of the parties in
entering into the contract to sell.

FACTS; On March 23, 1998, Petitioners filed a complaint alleging that they are the owners of a
parcel of land in Malaybalay, Bukidnon. They further alleged that on July 23, 1997 when
Reynalda Visitacion (Sister of Petitioner Aurora Tumibay) sold the said property to her daughter,
Respondent Rowena Lopez, through a Deed of Sale for a lower price. The Petitioners allege that
the sale was done without their knowledge and consent and thus the Deed of Sale must be
declared void and the subject land reconveyed to the Petitioners with damages from the
Respondents.

Respondents contended that Reynalda was in possession of the Special Power of Attorney
executed by the Petitioners, granting her the authority to sell the subject property and that
Rowena had in fact come into an agreement on the purchase price on installments as shown
by presented money orders. Respondents in turn prayed for the dismissal of the Petitioner’s
complaint.

ISSUE: Whether or not there was a valid contract between the parties

HELD: The Supreme Court Held that there was indeed a valid Contract to Sell. A contract to sell
has been defined as a bilateral contract whereby the prospective seller, while expressly
reserving the right of ownership of the subject property despite delivery to the subject buyer,
binds himself to sell the same exclusively to the latter upon fulfillment of the condition agreed
upon, that is full payment of the purchase price. The Court ruled that the agreement between
the Parties partook of an Orally Executed Contract to Sell and, taken in conjunction with the
numerous payments made by the Respondents, clearly evidence the existence of such an
agreement.

However, in the case at bar, Respondent Rowena was found to be in breach of the said
Contract because when the Deed of Sale was executed, there was yet to be full payment on
the subject property. The Premature Transfer of the said property without the consent of the
Petitioners renders such Contract rescissible. Under Article 1191 of the Civil Code, the power to
rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply
with what is incumbent upon him.
SPS. CACAYORIN v. ARMED FORCES AND POLICE MUTUAL BENEFIT ASSOCIATION
G.R. No. 171298, April 15, 2013

DOCTRINE: Consignation is necessarily judicial. Article 1258 of the Civil Code specifically provides
that consignation shall be made by depositing the thing or things due at the disposal of judicial
authority. The said provision clearly precludes consignation in venues other than the courts.

FACTS: Petitioner Oscar Cacayorin is a member of the Respondent Association engaged in the
business of developing low cost housing projects for personnel of the AFP, PNP, BFP, BJMP, and
the Philippine Coast Guard. He filed an application to purchase a piece of property owned by
the association in Puerto Princesa through a loan facility.

On July 1994, the Spouses executed a Loan and Mortgage Agreement with the Rural Bank of
San Teodora under the Pag-Ibig Fund’s Financing Program. On the basis of the Rural Bank’s letter
of guaranty, AFPMBAI executed a Deed of Sale in favor of the Petitioners and the subject
property was thereafter transferred in their name.

Unfortunately, the Pag-Ibig Loan did not push through and the Rural Bank was placed under
receivership by the PDIC which prompted the association to take possession of the Petitioner’s
Loan Documents and Transfer Certificate of Title.

Thereafter, Petitioenrs filed a complaint for consignation of loan payment, recovery of title, and
cancellation of mortgage against the Association, PDIC, and the Register of Deeds of Puerto
Princesa. Petitioners contended that as a result of the Rural Bank’s closure and PDIC’s claim that
their loan papers could not be located, they were left without recourse as to where they should
tender full payment of their loan and how to secure the cancellation of annotation on the TCT.
The Association filed a motion to dismiss on the ground that the jurisdiction of the case falls within
the auspices of the HLURB.

ISSUE: Whether or not the Complaint falls within the jurisdiction of the HLURB.

HELD: The Supreme Court held that the Complaint makes out a case for consignation. It is well
settled that the allegations of the complaint are determinative of the nature of the action and
consequently the jurisdiction of the courts. Under Art. 1256 of the Civil Code, the debtor shall be
released from responsibility by the consignation of the thing or sum due, without need of prior
tender of payment, when the creditor is absent or unknown or when he is incapacitated to
receive such payment at the time it is due, or when two or more persons claim the same right to
collect, or when the title to the obligation has been lost.

In the case at bar, the Court held that a case for consignation has been made whereby there
are two entities claiming the same right to collect from the petitioners. As to jurisdiction, the Civil
Code provides under Art. 1258 that Consignation shall be made by depositing the things due at
the disposal of Judicial Authority, before whom the tender of payment shall be provided, in a
proper case, and the announcement of the consignation in other cases. Thus, Consignation is
necessarily judicial and outside the jurisdiction of the HLURB.
HEIRS OF GALLARDO v. SOLIMAN
G.R. No. 178952, April 10, 2013

DOCTRINE: When one party enters into a covenant with another, he must perform his obligations
with fealty and good faith. This becomes more imperative where such party has been given a
grant, such as land, under the land reform laws. While the tenant is emancipated from bondage
to the soil, the landowner is entitled to his just compensation for the deprivation of his land.

FACTS: Petitioners filed a complaint for collection of land amortizations, dispossession, ejectment
and cancellation of Deed of Transfer, and Emancipation Patent against the Respondent before
the Provincial Agrarian Reform Adjudicator in Tarlac City. The Petitioners alleged that
Respondent was obliged under a Kasunduan and a Notarized Deed of Transfer to pay the
Petitioners 999 Cavans of Palay in 15 yearly amortizations or 16 cavans per hectare per year.
However, the latter fell short on his amortization payments about 10 years into the deed.
Therefore, the Petitioners were constrained to institute the instant case which the Respondents
seek to dismiss arguing that PARAD has no jurisdiction over the case and no authority to cancel
such titles as the same pertains to the regular courts considering the lack of a tenancy
relationship between the Parties.

ISSUE: Whether or not the Respondents should have complied with the amortization payments

HELD: The Supreme Court held that as the farmer tenant-transferee of the land under PD 27,
Respondent is by law required to make amortizations on the land until he completes payment of
the fixed price thereof.

Under the Kasunduan and Deed of Transfer, he has to make good on his payments to the
landowners. If he fails to pay, cancellation of any Certificate of Land Transfer or Emancipation
Patent issued in his name is proper, pursuant to Section 2 of PD 816.Considering the tenor of the
law, the PARAD’s and DARAB’s pronouncement that respondents cannot be faulted for they
"labored under the honest belief that they were now vested with absolute ownership" of the
land, and that they "cannot be expected to understand the legal implications of the existing
lien/encumbrances annotated on their respective titles entered into in 1990 to insure payment of
the land value" to petitioners, appears to be anchored not on legal ground. Besides, it is
common maxim that "ignorance of the law excuses no one from compliance therewith."

Moreover, when one party enters into a covenant with another, he must perform his obligations
with fealty and good faith. This becomes more imperative where such party has been given a
grant, such as land, under the land reform laws. While the tenant is emancipated from bondage
to the soil, the landowner is entitled to his just compensation for the deprivation of his land.
MOLDEX REALTY, INC. v. SABERON
G.R. No. 176289, April 8, 2013

DOCTRINE: The lack of a license to sell or the failure on the part of a subdivision developer to
register the contract to sell or deed of conveyance with the Register of Deeds does not result to
the nullification or invalidation of the contract to sell it entered into with a buyer. The contract to
sell remains valid and subsisting.

FACTS: Respondent Flora entered a contract to sell of a lot with the petitioner Moldex.Flora
opted to pay on installment. Later on, Moldex sent Flora notices reminding her to update her
account. For failure to settle accounts, Notarized Notice of Cancellation of Reservation
Application and/or Contract to Sell.

Flora, on the other hand, filed for the annulment of the contract to sell, recovery of all her
payments with interests, damages, and the cancellation of Moldex’s license to sell.

Flora alleged that the contract to sell between her and Moldex is void from its inception.
According to Flora, Moldex violated Section 5 of PD No. 957 when it sold the subject lot to her
before it was issued a license to sell. Flora likewise claimed that Moldex violated Section 17 of
the same law because it failed to register the contract to sell in the Registry of Deeds

ISSUE: Is the contract to sell between Moldex and Flora void for violating Sections 5 and 17 of PD
957

HELD: The Supreme Court held that no, the lack of a certificate of registration and a license to
sell on the part of asubdivision developer does not result to the nullification or invalidation of the
contractto sell it entered into with a buyer. The contract to sell remains valid and subsisting. The
court upheld the validity of the contract to sell notwithstanding violations by thedeveloper of the
provisions of PD 957. We held that nothing in PD 957 provides forthe nullity of a contract validly
entered into in cases of violation of any of its provisionssuch as the lack of a license to sell.
ROBERN DEVELOPMENT CORP. v. PEOPLE’S LANDLESS ASSOCIATION
G.R. No. 173622, March 11, 2013

DOCTRINE: The Courts may not presume the existence of a sale of land, absent any direct proof
of the same.

FACTS: Al-Amanah owned a 2000 sqm lot in Davao City. On December 12, 1992, Al-Amanah
Davao Branch asked some of the members of the Respondent Association to desist from
building their houses on the property and vacate the same unless they are interested in
purchasing it. The informal settlers thus expressed their interest to purchase the property but Al-
Amanah turned down due to their offer being far below the asking price. Subsequently,
numerous letter requests were sent to the settlers asking for them to vacate the said property. In
response, PELA replied that it had already reached an agreement with Al-Amanah regarding
the sale based on their offered price.

Subsequently, Petitioner corporation made an offer on the said property which Al-Amanah
accepted, however they were informed that the responsibility of asking the settlers to vacate fell
on their shoulders within 15 days otherwise, their deposit would be forfeited. Thereafter, a deed
of sale was executed between the parties and PELA filed a suit for annulment thereof claiming
that there was already a perfected contract between PELA and Al-Amanah.

ISSUE: Whether or not there was a perfected contract between PELA and Al-Amanah.

HELD: The Supreme Court ruled that the transaction between Al-Amanah and PELA remained in
the negotiation stage. The offer of PELA never materialized into a perfected sale for no oral or
documentary evidence was proferred to support this contention. Rather, Al-Amanah expressly
refused this offer made by PELA before the lapse of the 1 year period agreed upon by the
Parties. Thus, there is no reason to disturb the consummated sale between Robern and Al-
Amanah.
DIEGO v. DIEGO
G.R. No. 179965, February 20, 2013

DOCTRINE: It is settled jurisprudence, to the point of being elementary, that an agreement which
stipulates that the seller shall execute a deed of sale only upon or after payment of the
purchase price is a contract to sell, not a contract of sale. In Reyes v. Tuparan, this Court
declared in categorical terms that "[w]here the vendor promises to execute a deed of absolute
sale upon the completion by the vendee of the payment of the price, the contract is only a
contract to sell. The aforecited stipulation shows that the vendors reserved title to the subject
property until full payment of the purchase price.

FACTS; In 1993, petitioner Nicolas P. Diego (Nicolas) and his brother Rodolfo, respondent herein,
entered into an oral contract to sell covering Nicolas's share, fixed at P500,000.00, as co-owner
of the family's Diego Building situated in Dagupan City. Rodolfo made a down payment of
P250,000.00. It was agreed that the deed of sale shall be executed upon payment of the
remaining balance of P250,000.00. However, Rodolfo failed to pay the remaining balance.

Meanwhile, the building was leased out to third parties, but Nicolas's share in the rents were not
remitted to him by herein respondent Eduardo, another brother of Nicolas and designated
administrator of the Diego Building. Instead, Eduardo gave Nicolas's monthly share in the rents
to Rodolfo. Despite demands and protestations by Nicolas, Rodolfo and Eduardo failed to
render an accounting and remit his share in the rents and fruits of the building, and Eduardo
continued to hand them over to Rodolfo.

Thus, on May 17, 1999, Nicolas filed a Complaint [6] against Rodolfo and Eduardo before the RTC
of Dagupan City. Nicolas prayed that Eduardo be ordered to render an accounting of all the
transactions over the Diego Building; that Eduardo and Rodolfo be ordered to deliver to Nicolas
his share in the rents; and that Eduardo and Rodolfo be held solidarily liable for attorney's fees
and litigation expenses.

ISSUE: Whether or not there was a perfected Contract of Sale between the Parties

HELD: There is no dispute that in 1993, Rodolfo agreed to buy Nicolas's share in the Diego Building
for the price of P500,000.00. There is also no dispute that of the total purchase price, Rodolfo
paid, and Nicolas received, P250,000.00. Significantly, it is also not disputed that the parties
agreed that the remaining amount of P250,000.00 would be paid after Nicolas shall have
executed a deed of sale.

This stipulation, i.e., to execute a deed of absolute sale upon full payment of the purchase price,
is a unique and distinguishing characteristic of a contract to sell. In Reyes v. Tuparan, this Court
ruled that a stipulation in the contract, "[w]here the vendor promises to execute a deed of
absolute sale upon the completion by the vendee of the payment of the price," indicates that
the parties entered into a contract to sell. According to this Court, this particular provision is
tantamount to a reservation of ownership on the part of the vendor. Explicitly stated, the Court
ruled that the agreement to execute a deed of sale upon full payment of the purchase
price "shows that the vendors reserved title to the subject property until full payment of the
purchase price."[
REPUBLIC v. HEIRS OF SPS. BAUTISTA
G.R. No. 181218, January 28, 2013

DOCTRINE: Time and again it has been said that the market value of a piece of property is the
price that may be agreed upon by parties willing but not compelled to enter into a sale. As
expected, a seller in dire need of funds will accept less, and a buyer desperate to acquire
naturally agrees to pay more, than what the property is truly worth.

FACTS; Spouses Bautista are the registered owners of a parcel of land in Barangay
Bulacnin North, Lipa City. Respondents are their children.

The Republic of the Philippines, through the DPWH, acquired by negotiated sale a portion of the
lot for P46,800 for use in the STAR (Southern Tagalog Arterial Road) Tollway project. The sale was
annotated on the title on June 1, 2000.

Petitioner offered to purchase an additional 1,155 square meters of the lot at P100 per square
meter, but the spouses Bautista refused to sell. The portion sought to be purchasedwas to be
used for the Balete-Lipa City Interchange Ramp B.

On July 7, 2004, the petitioner filed a Complaint with the RTC of Lipa City for theexpropriation of
the 1,155-square meter portion. In its Amended Complaint, petitioner alleged that the zonal
valuation of the lot at the time of the filing of the Complaint asdetermined by the BIR is P100 per
square meter, which is thus the fair value of the property for purposes of expropriation.

Respondents claimed that the valuation of P100 per square meter based on the BIR
zonalvaluation is not fair considering that the petitioner in the past bought a portion of thesame
property at P1,300 per square meter. They added that the current fair market valueof the lot
should be pegged at more than P3,000 per square mete

ISSUE: Whether or not the Court of Appeals erred in relying on the Joint Commissioner’s Report

HELD: The Supreme Court ruled that the only legal question raised by the petitioner relates to the
commissioners’ and the trial court’s alleged failure to take into consideration, in arriving at the
amount of just compensation, Section 5 of RA 8974 enumerating the standards for assessing the
value of expropriated land taken for national government infrastructure projects. What escapes
petitioner, however, is that the courts are not bound to consider these standards; the exact
wording of the said provision is that "in order to facilitate the determination of just compensation,
the courts may consider" them. The use of the word "may" in the provision is construed as
permissive and operating to confer discretion. In the absence of a finding of abuse, the exercise
of such discretion may not be interfered with. For this case, the Court finds no such abuse of
discretion.
CHING v. BANTOLO
G.R. No. 177086, December 5, 2012

DOCTRINE: It is essential that for damages to be awarded, a claimant must satisfactorily prove
during the trial that they have a factual basis and that the defendant’s acts have a casual
connection to them

FACTS: Respondents are the owners of several properties located in Tagaytay City. On April 3,
2000, respondents executed in favor of petitioners Albert Ching (Ching) and Romeo J. Bautista a
Special Power of Attorney (SPA)7 authorizing petitioners to obtain a loan using respondents’
properties as collateral. Thereafter, without notice to petitioners, respondents executed a
Revocation of Power of Attorney9 effective at the end of business hours of July 17, 2000.

On July 18, 2000, the Philippine Veterans Bank (PVB) approved the loan application of petitioner
Ching in the amount of P25 million for a term of five years. On July 31, 2000, petitioner Ching thru
a letter informed respondents of the approval of the loan.

Sometime in the first week of August 2000, petitioners learned about the revocation of the SPA.
Consequently, petitioners sent a letter to respondents demanding that the latter comply with
the agreement by annulling the revocation of the SPA.

On September 8, 2000, petitioners filed before the Regional Trial Court (RTC) of Quezon City a
Complaint for Annulment of Revocation of SPA, Enforcement of SPA and/or interest in the
properties covered by said SPA and Damages against respondents. Petitioners later amended
the Complaint, docketed as Q00-41851, to include an alternative prayer to have them declared
as the owners of one-half of the properties covered by the SPA.

Petitioners alleged that the SPA is irrevocable because it is a contract of agency coupled with
interest. According to them, they agreed to defray the costs or expenses involved in processing
the loan because respondents promised that they would have an equal share in the proceeds
of the loan or the subject properties.

ISSUE: Whether or not Respndents are liable to pay exemplary damages for revoking the SPA in
bad faith.

HELD: The Supreme Court held that It is essential that for damages to be awarded, a claimant
must satisfactorily prove during the trial that they have a factual basis, and that the defendant’s
acts have a causal connection to them. Article 2229 of the Civil Code provides that exemplary
damages may be imposed “by way of example or correction for the public good, in addition to
the moral, temperate, liquidated or compensatory damages.” They are, however, not
recoverable as a matter of right. They are awarded only if the guilty party acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner.

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