Dignos v. CA G.R. No.

L-59266; 29 February 1988

FACTS:

Spouses Silvestre Dignos and Isabela Lumungsod de Dignos sold their parcel of land in Opon, Lapu-Lapu to private
respondent Antonio Jabil for the sum of P28,000.00 payable for 2 installments, with an assumption of indebtedness
with the First Insular Bank of Cebu in the sum of P12,000.00 as was acknowledged by vendors in the Deed of Absolute
Sale (Exh. C), and the next installment to be paid 3 months after. But the same land was also sold by Spouses Dignos
(Exh. J) which was registered in the Registry of Deeds. This prompted Jabil to file a civil suit against Spouses Dignos
for the 2nd sale to Spouses Luciano Cabigas and Jovita de Cabigas, who were then US citizens. CFI of Cebu rendered
the 2nd sale to Spouses Cabigas null and void, directing Spouses Dignos to return the P35,000.00 to Spouses Cabigas
and ordered Jabil to pay the remaining balance. Spouses Dignos contend that Exh. C is a contract to sell and as such,
anchored their contention on the very terms of the contract as mentioned in ¶4, that said spouses have agreed to
sell the herein mentioned property to Alilano B. Jabil and condition in ¶5, in which the spouses agreed to sign a final
deed of absolute sale upon payment of the remaining balance of P4,000.00.

ISSUE:

Is the contract between the parties a contract of sale or a contract to sell?

HELD:

The contract between the parties is a contract of sale. It has been held that a deed of sale is absolute in nature
although dominated as a “Deed of Conditional Sale” where nowhere in the contract in question is a proviso or
stipulation to the effect that title to the property sold is reserved in the vendor until full payment of the purchase
price, nor is there a stipulation giving the vendor the right to unilaterally rescind the contract the moment the vendee
fails to pay within a fixed period. All the elements of a valid contract of sale are present in the document and that
Spouses Dignos never notified Jabil by notarial act that they were rescinding the contract, and neither did they file
a suit in court to rescind the sale. There is no showing that Jabil properly authorized a certain Cipriano Amistad to
tell petitioners that he was already waiving his rights to the land in question.

Jacobs Bernhard Hulst vs. PR Builders Inc. G.R. No. 156364 Sept. 3, 2007

FACTS:

a.) Petitioner and his spouse (Ida) dutch nationals entered into a contract to sell with PR Builders Inc. for the
purchase of a 210 sq m residential unit in respondent town house in Niyugan, Laurel, Batangas.
b.) June 1995, the petitioner filed rescission of contract before housing and land Use Regulatory Board (HLURB) for
respondent’s failure to comply.
c.) April 22, 1997, HLURB arbiter Ma. Perpetua y Aquino(arbiter) rendered a decision in favor of petitioner.
contract is rescinded. (reimburst complaint the sum of P3,187, 500.00 PLUS 12% per anum from time complaint
was filed).
d.) Spouses Hulst divorced, Ida assigned her rights over the purchased property to petitioner and alone pursued
the case.
e.) August 21, 1997, HLURB arbiter issued a writ of execution addressed to ex-officio shrift of RTC of Tanuan,
Batangas diredcting the latter to execute its judgment.
f.) April 13, 1998, The ex-officio sherift proceed to implement the writ of execution. Respondent filed complaint
with CA on Petition for Certiorary and prohibition, levy made by the sheriff was set aside, requiring the sheriff to
levy first on respondents personal properties.
g.) January 26, 1999, upon petitioner’s motion, HLURB issued an alias writ of execution.
h.) March 23, 1999, the sheriff levied on respondent’s 15 parcels of land covered by 13 transfer of title in Brgy.
Niyugan, Laurel , Batangas.
i.) March 27, 200, Noticed of sale , the sheriff set the public auction of the levied properties on April 28, 2000 at 10
am.
j.) April 26, 2000, respondent filed an urgent motion to quash writ of levy with HLURB on the ground that sheriff
made a overlevy.
k.) Public Auction was conducted and the sum of P5,313,040.00 from Holly Properties Realty Corp(winning bidder)
was turned over to petitioner after deducting the legal fees.
l.) September 27, 2000, petitioner filed a petition for certiorari and prohibition with CA(SEC 1(N) RULE IV of
1996HLURB)- Motion for recon is prohibited).
m.) October 30,2002, CA dismissed the petition, held that when there is a right to redeem inadequacy of price
should not be material holds no water as what is obtaining in this case but an inadequacy that shock the senses.
n.) Petitioner took the present recourse on the sole ground that the honorable CA gravely erred in affirming the
arbiter’s order setting aside the levy made by the sheriff on the subject properties.
ISSUE:

Whether or not that the foreign nationals were proscribed to own real property under the rules, but is entitled to
recover only the amount paid representing the purchase upon the rescission of the contract.

HELD:

Yes thus exception finds application in this case, under article 1414, one who repudiates the agreement and
demand his money before the illegal act has taken place is entitled to recover. Petitioner is therefore entitled to
recover what he has paid, although the basis of his claim for rescission, which was granted by the HLURB Was not
the fact that he is not allowed to acquire private land under the Phil. Consti. but petitioner is entitled to the
recovery only the amount of P3,187,500.00 representing the purchase price paid to respondent. No damages may
be recovered on the basis of void contract; being nonexistent, the agreement produces no judicial tie between the
parties involved. Further , petitioner is not entitled to actual as well as interest thereon, moral and exemplary
damages and atty’s fees.

A sense of justice and fairness demands that petitioner should not be allowed to benefit from his act of entering
into a contract to sell that violates the constitutional prescription.

The instant Petition is granted. The decision dated Oct. 30, 2002 of CA is reversed and set aside. The order dated
August 28,2000 of HLURB Arbiter and director Ceniza is declared null and void.

Petitioner is ordered to return to respondent the amount of P2,125,540 without interest in excess of the proceeds
of the auction sale delivered to petitioner.

Toyota Shaw Inc. vs. Court of Appeals, and Sosa 244 SCRA 320 May 1995

FACTS:

Luna L. Sosa and his son, Gilbert, went to purchase a yellow Toyota Lite Ace from the Toyota office at Shaw
Boulevard, Pasig (petitioner Toyota) on June 14, 1989 where they met Popong Bernardo who was a sales
representative of said branch. Sosa emphasized that he needed the car not later than June 17, 1989 because he,
his family, and a balikbayan guest would be using it on June 18 to go home to Marinduque where he will celebrate
his birthday on June 19. Bernardo assured Sosa that a unit would be ready for pick up on June 17 at 10:00 in the
morning, and signed the "Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc.,” a document
which did not mention anything about the full purchase price and the manner the installments were to be paid.
Sosa and Gilbert delivered the down payment of P100,000.00 on June 15, 1989 and Bernardo accomplished a
printed Vehicle Sales Proposal (VSP) No. 928 which showed Sosa’s full name and home address, that payment is by
"installment," to be financed by "B.A.," and that the "BALANCE TO BE FINANCED" is "P274,137.00", but the spaces
provided for "Delivery Terms" were not filled-up.

When June 17 came, however, petitioner Toyota did not deliver the Lite Ace. Hence, Sosa asked that his down
payment be refunded and petitioner Toyota issued also on June 17 a Far East Bank check for the full amount of
P100,000.00, the receipt of which was shown by a check voucher of Toyota, which Sosa signed with the
reservation, "without prejudice to our future claims for damages." Petitioner Toyota contended that the B.A.
Finance disapproved Sosa’s the credit financing application and further alleged that a particular unit had already
been reserved and earmarked for Sosa but could not be released due to the uncertainty of payment of the balance
of the purchase price. Toyota then gave Sosa the option to purchase the unit by paying the full purchase price in
cash but Sosa refused.

The trial court found that there was a valid perfected contract of sale between Sosa and Toyota which bound the
latter to deliver the vehicle and that Toyota acted in bad faith in selling to another the unit already reserved for
Sosa, and the Court of Appeals affirmed the said decision.

ISSUE:

Was there a perfected contract of sale between respondent Sosa and petitioner Toyota?

COURT RULING:

The Supreme Court granted Toyota’s petition and dismissed Sosa’s complaint for damages because the document
entitled “Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc.,” was not a perfected contract of
sale, but merely an agreement between Mr. Sosa and Bernardo as private individuals and not between Mr. Sosa
and Toyota as parties to a contract.

There was no indication in the said document of any obligation on the part of Toyota to transfer ownership of a
determinate thing to Sosa and neither was there a correlative obligation on the part of the latter to pay therefor a
price certain. The provision on the downpayment of P100,000.00 made no specific reference to a sale of a vehicle.
If it was intended for a contract of sale, it could only refer to a sale on installment basis, as VSP No.928 executed
on June 15, 1989 confirmed. The VSP also created no demandable right in favor of Sosa for the delivery of the
vehicle to him, and its non-delivery did not cause any legally indemnifiable injury.

SPS. EDRADA v. SPS. RAMOS G.R. No. 154413, August 31, 2005

FACTS: Respondent (Sps. Ramos) are the owners of 2 fishing vessels. On April 1, 1996, respondents and petitioners
(Sps. Edrada) executed an untitled handwritten document which provides that the 2 vessels owned by respondents
are now in the possession and received in good running and serviceable order by petitioners; that the documents
pertaining to the sale and agreement of payments between them are to follow; and that the agreed price for the
vessel is P900,000. Upon the signing of document, petitioners delivered to respondents 4 postdated checks payable
to cash by petitioner Rosella Edrada, in various amounts totaling P140,000; 3 of the checks amounting to P40,000
were honored, while the check for the amount of P100,000 was dishonored because of a “stop payment” order.
Thus, the respondent filed an action against petitioners for specific performance with damages, before the RTC,
praying that petitioners be obliged to execute the necessary deed of sale of the two fishing vessels and to pay the
balance of the purchase price.
Respondents alleged that: Petitioners contracted to buy the two fishing vessels for the agreed price of P900,000, as
evidenced by the handwritten document, which according to them evinced a contract to buy. However, despite
delivery of said vessels and repeated oral demands, petitioners failed to pay the balance.

Petitioners’ answer: The document sued upon merely embodies an agreement brought about by the loans they
extended to respondents. According to petitioners, respondents allowed them to manage or administer the fishing
vessels as a business on the understanding that should they find the business profitable, the vessels would be sold
to them for P900,000. But petitioners “decided to call it quits” after spending a hefty sum for the repair and
maintenance of the vessels which were already in dilapidated condition.

RTC rendered judgment in favor of herein respondents holding that the document is a perfected contract of sale. CA
affirmed.

ISSUE: WON the RTC and the CA were correct in ruling that the document is a perfected contract of sale thus creating
an obligatory force either for the transfer of the vessels, or the rendition of payments as part of the purchase price.

RULING: NO. The court ruled that, at most, the agreement bares only their intention to enter into either a contract
to sells or a contract of sale. A contract of sale is defined as an agreement whereby one of the contracting parties
obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefore a
price certain in money or its equivalent. It must evince the consent on the part of the seller to transfer and deliver
and on the part of the buyer to pay. An examination of the document reveals that there is no perfected contract of
sale. The agreement may confirm the receipt by respondents of the two vessels and their purchase price. However,
there is no equivocal agreement to transfer ownership of the vessel, but a mere commitment that “documents
pertaining to the sale and agreement of payments…[are] to follow.” Evidently, the document or documents which
would formalize the transfer of ownership and contain the terms of payment of the purchase price, or the period
when such would become due and demandable, have yet to be executed. But no such document was executed and
no such terms were stipulated upon.

Assuming arguendo that the document evinces a perfected contract of sale, the absence of definite terms of
payment therein would preclude its enforcement by the respondents through the instant Complaint. A requisite for
the judicial enforcement of an obligation is that the same is due and demandable. The absence of a stipulated period
by which the purchase price should be paid indicates that at the time of the filing of the complaint, the obligation to
pay was not yet due and demandable.

Respondents, during trial, did claim the existence of a period. Respondent Carmencita Ramos, during cross-
examination, claimed that the supposed balance shall be paid on 30 June 1996. But how do respondents explain why
the Complaint was filed on 3 June 1996? Assuming that the 30 June 1996 period was duly agreed upon by the
parties, the filing of the Complaint was evidently premature, as no cause of action had accrued yet. There could not
have been any breach of obligation because on the date the action was filed, the alleged maturity date for the
payment of the balance had not yet arrived.

In order that respondents could have a valid cause of action, it is essential that there must have been a stipulated
period within which the payment would have become due and demandable. If the parties themselves could not
come into agreement, the courts may be asked to fix the period of the obligation, under Article 1197 of the Civil
Code. The respondents did not avail of such relief prior to the filing of the instant Complaint; thus, the action should
fail owing to its obvious prematurity.