G.R.No.

191696

April10,2013

ROGELIO DANTIS,Petitioner,vs.JULIO MAGHINANG, JR.,Respondent.MENDOZA,J.:

The Facts: The case draws its origin from a complaint for quieting of title andrecovery of possession with damages filed by petitioner
Rogelio Dantis (Rogelio) against respondent Julio Maghinang, Jr. (Julio, Jr.) " before the RTC, docketed as Civil Case No. 280-M-2002.
Rogelio alleged that he was the registered owner of a parcel of land covered by Transfer Certificate of Title (TCT) No. T-125918, with
an area of 5,657 square meters, located in Sta.Rita, San Miguel, 2ulacan3 thathe acquired ownership of the property through a deed
ofextraJudicial partition of theestate of his deceased father, Emilio Dantis (Emilio), dated December 22, 1993; that he had been
paying the realty taxes on the said property; that Julio Jr. occupied and built a house on a portion of his property without any right
at all; that demands were made upon Julio, Jr. that he vacate the premises but the same fell on deaf ears; and that the acts of
Julio,Jr. had created a cloud of doubt over his title and right of possession of his property. He added that he was constrained to
institute an ejectment suit against Julio, Jr.before the Municipal Trial Court of San Miguel, Bulacan (MTC), but the complaint was
dismissed for lack of jurisdiction and lack of cause of action.Julio claimed that his father, Julio Maghinang Sr., bought thesaid lot
from the parents of Rogelio Dantis. He admitted that the affidavit was not signed by the alleged vendor, Emilio Dantis, the father of
Rogelio Dantis. The receipt he presented was admittedly a mere photocopy.

RTCs Ruling:On March 2, 2005 the RTC rendered its decision declaring Rogelio as the true owner of the entire -5,657 - square meter
lot located in Sta. Rita, San Miguel, Bulacan, as evidenced by his TCT over the same.The RTCruled that even if the purported affidavit
and thereceipt presentedby Juliowere adjudgedas competent evidence, still, they would only serve as proofs that the purchase
price for the sub5ect lot had not yet been completely paid and,hence, Rogelio was not duty bound to deliver the property to Julio,
Jr. The RTC found Julio, Jr. to be a mere possessor by tolerance. The dispositive portion of the RTC decision reads:Julio, Jr. moved
for a reconsideration of the March 2, 2005 decision, but the motion was denied by the RTC in its May 3, 2005 Order. Feeling
aggrieved, Julio, Jr.appealed the decision to the CA.The CA held that the receiptwas an indubitable proof of the sale of the 352
square meter lot between Emilio and Julio, Sr. It also ruled that the partial payment of the purchase price, coupled with the delivery
of the res, gave e9cacy to the oral sale and brought it outside the operation of the statute of frauds.The motion forreconsideration
filed by Rogelio was denied by the CA, hence this petition.

Issues: whether there is a perfected contract of sale between Emilio and Julio, Sr.

The Courts Ruling

There isno perfected contract of sale. First, the affidavit allegedly executed by Ignacio Dantis (Ignacio), Rogelios grandfather,
whereby said affiant attested, among others, to the sale ofthe subject lot made byhis son, Emilio, to Julio, Sr. Second theundated
handwritten receipt of initial downpayment in the amount of P100.00 supposedly issued by Emilio to Julio, Sr. in connection with
the sale of the subject lot jurisprudence dictates that an affidavit is merely hearsay evidence where its affiant /maker did not take
the witness stand.

The sworn statement of Ignacio is hearsay evidence. Itcannot be deemed a declaration against interest for the matter to be
considered as an exception to the hearsay rule because the declarant was not the seller (Emilio), but his father Ignacio". On the
other hand, the undated handwritten receipt is considered secondary evidence being a mere photocopy which, in this case, cannot
be admitted to prove the contents of such receipt. The best evidence rule requires that the highest available degree of proof must
be produced. For documentary evidence, the contents of a document are best proved by the production of the document itself to
the exclusion of secondary or substitutionary evidence, pursuant to Rule 130, Section 3.

A secondary evidence is admissible only upon compliance with Rule 130, Section 5,which states that: when the original has been
lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, mayprove its contents by a copy, or by arecital of its contents in some authentic
document, or by the testimony of witnesses in the order stated. Proof of the due execution of the document and its subsequent
loss would constitute the basis for the introduction of secondary evidence.

In MCC Industrial Sales Corporation v. Sangyong Corporation,it washeld that where the missing document is the foundation of the
action, more strictness in proof is required than where the document is only collaterally involved.

Guided by these norms, the court holds that Julio, Jr. failed to prove the due execution of the original of affidavit as well as its
subsequent loss. His testimony was riddled with improbabilities and contradictions which tend to erode his credibility and raise
doubt on theveracity of his evidence. his claim of Julio, Jr. that Emilio affixed his signature on the original affidavit in 1953 is highly
improbable because record shows that 6milio died even before that year, specifically, on November 13, 1952.

Assuming, in, that the receipt is admissible in evidence, there will still be no valid and perfected oral contract for failure of Julio, Jr.
to prove the concurrence of the essential requisites of acontract of sale byadequate and competent evidence. By the contract of
sale,one of the contracting parties obligates himself to transfer the ownership of, and to deliver, adeterminate thing, and the
otherto pay therefor a price certain in money orits equivalent. A contract of sale is a consensual contract and, thus, is perfected by
mere consent which is manifested by the meeting of the offer andthe acceptance upon the thing and the cause which are to
constitute the contract. Until the contract ofsale is perfected, it cannot, as an independent source ofobligation, serve as abinding
juridical relation between the parties. The essential elements of acontract of sale are; a) consent or meeting of the minds, that is,
consent to transfer ownership in exchange for the price; b) determinate subject matter and c)price certain in money or its
equivalent.The absence of any of theessential elements shall negate the existence of a perfected contract of sale.

A perusal of the above document would readily show that itdoes not specify a determinate subject matter. Nowhere does it provide
a description of the property subject of the sale, including its metes and bounds, as well as its total area. The Court notes that while
Julio, Jr. testified that the landsubject of the sale consisted of 352 square meters, the receipt however, states that it is more than
400 square meters. Moreover, it does not categorically declare the price certain in money. Neither does it state the modeof payment
of thepurchase price and the period for its payment.

Seemingly, Julio, Jr. wanted to prove the sale by a receipt when it should be the receipt that should further corroborate the existence
of the sale. At best, his testimony only alleges but does not prove the existence of the verbalagreement.Julio, Jr. miserably failed to
establish by preponderance ofevidence.

On one hand, It is an age-old rule in civil cases that he who alleges a fact has the burden of proving it and a mere allegation is not
evidence. After carefully sifting through the evidence on record, the Court finds that Rogelio was able to establish a prima facie case
in his favour tending to show his exclusive ownership of the parcel of land under a title with an area of 5,657 square meters, which
included the 352 square meter subject lot and is a derivative ofa mother title, which covered a bigger area of land measuring 30,000
square meters registered in the name of Emilio Dantis; that Emilio died intestate on November 13, 1952; that Emilios five heirs,
including Rogelio, executed an extra judicial partition of estate on December 22, 1993 and divided among themselves specific
portions of the property

In Swedich Match, AB v Court of Appeals,the Court ruled that the manner of payment of the purchase price was an essential element
before a valid and binding contract of sale could exist. Albeit the Civil Code does notexplicitly provide that the minds of the
contracting parties must also meet onthe terms or manner of payment of the price, the sameis needed, otherwise, there is no sale.
An agreement anent the manner of payment goes intothe price so much so thata disagreement on the manner of payment is
tantamount to afailure to agree on the price.

FIRST OPTIMA REALTY CORPORATION, Petitioner, vs. SECURITRON SECURITY SERVICES, INC., Respondent.
G.R. No. 199648, January 28, 2015
DEL CASTILLO, J.:

Petitioner First Optima Realty Corporation is a domestic corporation engaged in the real estate business. It is the registered owner
of a parcel of land with improvements located in Pasay City, covered by Transfer Certificate of Title (the subject property).
Respondent Securitron Security Services, Inc., a domestic corporation with offices located beside the subject property, claimed
that the said parcel of land is subject of the alleged perfected contract of sale through the latter’s payment of an earnest money.

The RTC and Court of Appeals found the existence of the perfected contract of sale. Hence, the petitioner corporation filed a
petition for review on Certiorari.

The fact shows that the respondent through its General Manager Eleazar offred to purchase the subject property of the petitioner
through a letter addressed to its Vice President Young. Eleazar offered the purchase of the property in cash. Young declined to
accept the payment and informed Eleazar that prior approval of petitioner’s Board of Directors was required for the transaction.

Respondent sent a Letter to the petitioner accompanied by a check in the amount of P100,000.00 made payable to petitioner,
which serve as earnest money for the property. Despite the delicate nature of the matter and large amount involved, respondent
did not deliver the letter and check directly to Young or her office; instead, they were coursed through an ordinary receiving
clerk/receptionist of the petitioner, who issued a provisional receipt.The check was eventually deposited with and credited to
petitioner’s bank account.

Thereafter, respondent through counsel demanded in writing that petitioner proceed with the sale of the property. It averred that
since a perfected contract of sale arose between the parties after negotiations were conducted and respondent paid the earnest
money, which petitioner accepted, the latter should be compelled to sell the subject property to the former. It contended that
the failure to return of its payment amounts to estoppel and retification of sale.
Petitioner argued that it never agreed to sell the subject property; that its board of directors did not authorize the sale thereof to
respondent, as no corresponding board resolution to such effect was issued; that the respondent’s P100,000.00 check payment
cannot be considered as earnest money since the payment constitutes merely an offer which requires acceptance in order to give
rise to a contract of sale.

ISSUE:

Is there a perfected contract of sale upon payment of earnest money prior to the acceptance of the offer by the seller?

RULING:
NO. The Supreme Court ruled that when there is merely an offer by one party without the acceptance of the other, there is no
contract. As contemplated under Art. 1482 of the Civil Code, “there must first be a perfected contract of sale before we can speak
of earnest money.” “Where the parties merely exchanged offers and counter-offers, no contract is perfected since they did not
yet give their consent to such offers. Earnest money applies to a perfected sale.”

In a potential sale transaction, the prior payment of earnest money even before the property owner can agree to sell his property
is irregular, and cannot be used to bind the owner to the obligations of a seller under an otherwise perfected contract of sale; to
cite a well-worn cliché, the carriage cannot be placed before the horse. The property owner-prospective seller may not be legally
obliged to enter into a sale with a prospective buyer through the latter’s employment of questionable practices which prevent the
owner from freely giving his consent to the transaction; this constitutes a palpable transgression of the prospective seller’s rights
of ownership over his property, an anomaly which the Court will certainly not condone.

In this case, respondent’s subsequent sending of the letter and check to petitioner – without awaiting the approval of petitioner’s
board of directors and Young’s decision, or without making a new offer – constitutes a mere reiteration of its original offer which
was already rejected previously; thus, petitioner was under no obligation to reply to the letter. Thus, said letter cannot be
considered as evidence of a perfected sale, which does not exist in the first place; no binding obligation on the part of the
petitioner to sell its property arose as a consequence. The letter made no new offer replacing the first which was rejected.

CORNELIA BALADAD VS SERGIO RUBLICO AND SPS LAUREANO YUPANOG.R.NO. 160743, 4 August 2009, THIRD DIVISION, (Nachura,
J.)
FACTS:
Corazon and Julian Rublico got married at 65yo after cohabiting for some time. Julian diedleaving Corazon and his son, Epitacio as his compulsory heirs.
Upon Corazon’s deathbed, she andEpitacio adjudicated Julian’s 2 parcels of land and sold the same to Epitacio’s daughter thru a deed entitled Extrajudicial
Settlement of Estate with Absolute Sale. The sale was made for P107,750 and Corazon’s thumb mark was imprinted therein with Epitacio’s son, Vincent, signing
in behalf of his father by virtue of a power of attorney. Corazon died 2 days later and the titles remained in Julian’s name.

After 2 years, Sergio, Corazon’s son with Teofilo Rublico, adjudicated unto himself the same parcels of land and was able to obtain TCTs in his name,
claiming that he is the sole heir of Corazon. Hesubsequently sold it to the Spouses Yupano. The Yupanos then demanded rent from
the tenants therein but the latter refused stating that they have been paying rent to Vincent and that the former has no right
todemand rentals from them as he does not own the property. The tenants filed a complaint for interpleaderand the RTC declared the Yupanos as the legal and
lawful owners of the lots.Prior to the promulgation of the decision, Cornelia filed a complaint for annulment off sale andcancellation of the title. The RTC decided
in Cornelia’s favor but the CA reversed the decision.

ISSUE:
Whether or not the Extrajudicial Settlement of Estate with Absolute Sale is valid.
HELD
:Yes. When the terms of a contract are lawful, clear and unambiguous, facial challenge cannot beallowed. The subject deed is, on its face, unambiguous
because it clearly stated and complied with therequisites for its validity. The respondents failed to prove that the deed executed was void, therefore,validity of
the deed should be upheld.A contract of sale is perfected the moment there is a meeting of the minds upon the thing which isthe object of the contract and
upon the price. Since Cornelia herself brought the lawyer to notarize thedeed shows that she consented to the contract. It is immaterial that her signature does
not appear on thedeed.
Furthermore, Cornelia’s subseq
uent act of exercising dominion over the properties strengthens herclaim.Sergio Rublico, on the other hand, never had the right to sell the subject properties to
theYupanos because he never owned them to begin with. Even before Sergio could inherit any share of the properties from his mother, the latter
already sold them to Cornelia.The decision of the CA is reversed and set aside. Decision of the RTC reinstated withmodification.
NHA v GRACE BAPTIST CHURCH, G. R. No. 156437, 1 March 2004

Facts: Respondent Church applied to purchase lots from a Resettlement Project in Cavite. Petitioner approved the respondent’s
application. Respondents then proceeded to possess the land and made improvements. The Respondents received the letter from
the petitioner duly approving the sale of the subject lots but in a price not declared to them by the NHA Field Office. Petitioner
returned the check stating that the amount was insufficient considering that the price of the properties had changed. The Church
made demands to the petitioner but the latter refused to accept the payment.
The Church instituted a complaint for specific performance and the trial court ruled that there was a valid contract of sale
between the parties and ordered that the petitioners reimburse the respondent Church the overpayment made for the lots. NHA
appealed the case and the appellate court affirmed the trial court’s decision that there was a valid contract of sale but held that
the petitioner sell the lots at the price approved by the NHA.

A motion for reconsideration was filed but was denied.

Issue: WON there was a valid contract of sale

Ruling: There was no contract at all.
Ratio Decidendi: The principle of estoppel will not apply in this case because it does not operate against the Government for the
acts or inaction of its agents. The case will cover the principle of equity under the law ad will require the determination of the laws
that will govern. Contracts, once perfected, are binding upon the parties and obligations arising from it have the force of law
between them and should be complied in good faith. However, contracts are not the only source of law that govern obligations. A
contract must not run in contrary to law, morals, good customs, public order and public policy.
The offer of the NHA to sell the subject property was not accepted by the respondent. Thus, the alleged contract involved in this
case should be more accurately denominated as inexistent. There being no concurrence of the offer and acceptance, it did not
pass the stage of generation to the point of perfection. As such, it is without force and effect from the very beginning or from its
incipiency, as if it had never been entered into, and hence, cannot be validated either by lapse of time or ratification. Equity
cannot give validity to a void contract, and this rule should apply with equal force to inexistent contracts.
The Church, despite knowledge that its intended contract of sale with the NHA had not been perfected, proceeded to introduce
improvements on the disputed land. On the other hand, the NHA knowingly granted the Church temporary use of the subject
properties and did not prevent the Church from making improvements thereon. Thus, the Church and the NHA, who both acted in
bad faith, shall be treated as if they were both in good faith.

The case was remanded back to the trial court to access the value of the improvements made on the land and fix the terms of the
lease if the parties so agree.

G.R. NO. 124242, January 21, 2005

SAN LORENZO DEVELOPMENT CORPORATION VS. CA

FACTS:
On 20 August 1986, the Spouses Lu purportedly sold the two parcels of land to respondent Pablo Babasanta. The latter
made a downpayment of fifty thousand pesos (P50,000.00) as evidenced by a memorandum receipt issued by Pacita Lu of the same
date. Several other payments totaling two hundred thousand pesos (P200,000.00) were made by Babasanta. He demanded the
execution of a Final Deed of Sale in his favor so he may effect full payment of the purchase price; however, the spouses declined to
push through with the sale. They claimed that when he requested for a discount and they refused, he rescinded the agreement.
Thus, Babasanta filed a case for Specific Performance.
On the other hand, San Lorenzo Development Corporation (SLDC) alleged that on 3 May 1989, the two parcels of land
involved, namely Lot 1764-A and 1764-B, had been sold to it in a Deed of Absolute Sale with Mortgage. It alleged that it was a buyer
in good faith and for value and therefore it had a better right over the property in litigation.
ISSUE:
Who between SLDC and Babasanta has a better right over the two parcels of land?
RULING:
An analysis of the facts obtaining in this case, as well as the evidence presented by the parties, irresistibly leads to the
conclusion that the agreement between Babasanta and the Spouses Lu is a contract to sell and not a contract of sale.
The receipt signed by Pacita Lu merely states that she accepted the sum of fifty thousand pesos (P50,000.00) from
Babasanta as partial payment of 3.6 hectares of farm lot. While there is no stipulation that the seller reserves the ownership of the
property until full payment of the price which is a distinguishing feature of a contract to sell, the subsequent acts of the parties
convince us that the Spouses Lu never intended to transfer ownership to Babasanta except upon full payment of the purchase price.
Babasanta’s letter dated 22 May 1989 was quite telling. He stated therein that despite his repeated requests for the
execution of the final deed of sale in his favor so that he could effect full payment of the price, Pacita Lu allegedly refused to do
so. In effect, Babasanta himself recognized that ownership of the property would not be transferred to him until such time as he
shall have effected full payment of the price. Doubtlessly, the receipt signed by Pacita Lu should legally be considered as a perfected
contract to sell.
The perfected contract to sell imposed upon Babasanta the obligation to pay the balance of the purchase price. There
being an obligation to pay the price, Babasanta should have made the proper tender of payment and consignation of the price in
court as required by law. Glaringly absent from the records is any indication that Babasanta even attempted to make the proper
consignation of the amounts due, thus, the obligation on the part of the sellers to convey title never acquired obligatory force.
There was no double sale in this case because the contract in favor of Babasanta was a mere contract to sell; hence, Art.
1544 is not applicable. There was neither actual nor constructive delivery as his title is based on a mere receipt. Based on this alone,
the right of SLDC must be preferred.

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 latter’s 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.

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. Engineering contends that the contract
was of sale and the claim is barred by prescription since the responsibility of a vendor for any hidden faults or defects in the thing
sold runs only for 6 months (Arts 1566, 1567, 1571). Almeda contends that since it was a contract for a piece of work, hence the
prescription period was ten years (Hence Art 1144 should apply on written contracts).

RTC found that Engineering failed to install certain parts and accessories called for by the contract, and deviated from the plans of
the system, thus reducing its operational effectiveness to achieve a fairly desirable room temperature.

Issue:

1) Whether the contract for the fabrication and installation of a central air-conditioning system in a building, one of “sale” or “for a
piece of work”? CONTRACT FOR PIECE OF WORK.
2) Corrollarily whether the claim for refund was extinguished by prescription? NO.

Held:

1) A contract for a piece of work, labor and materials may be distinguished from a contract of sale by the inquiry as to whether the
thing transferred is one not in existence and which would never have existed but for the order, of the person desiring it. In such
case, the contract is one for a piece of work, not a sale. On the other hand, if the thing subject of the contract would have existed
and been the subject of a sale to some other person even if the order had not been given, then the contract is one of sale.

A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or
procures for the general market, whether the same is on hand at the time or not is a contract of sale, but if the goods are to be
manufactured specially for the customer and upon his special order, and not for the general market, it is a contract for a piece of
work .

The contract in question is one for a piece of work. It is not petitioner’s line of business to manufacture air-conditioning systems to
be sold “off-the-shelf.” Its business and particular field of expertise is the fabrication and installation of such systems as ordered by
customers and in accordance with the particular plans and specifications provided by the customers. Naturally, the price or
compensation for the system manufactured and installed will depend greatly on the particular plans and specifications agreed upon
with the customers.

2)The original complaint is one for damages arising from breach of a written contract – and not a suit to enforce warranties against
hidden defects – we here – with declare that the governing law is Article 1715 (supra). However, inasmuch as this provision does
not contain a specific prescriptive period, the general law on prescription, which is Article 1144 of the Civil Code, will apply. Said
provision states, inter alia, that actions “upon a written contract” prescribe in ten (10) years. Since the governing contract was
executed on September 10, 1962 and the complaint was filed on May 8, 1971, it is clear that the action has not prescribed.