(1) DIONISIA DORADO VDA. DE DELFIN vs DELLO TA G.R. No. 143697 FACTS: FACTS: In her lifetime, the late Dionisia Dorado Delfin, executed an "Escritura De Venta Con Pacto de Retro" over a 50,000-square meter ortion of !ot o# $%$& in favor of souses Ildefonso Dellota and Patricia Delfin# 'o(ever, Dionisia failed to exercise her ri)ht of redemtion, thus, leavin) an unsold area of more than *&,000 square meters# Dionisia never redeemed this 50,000-square meter ortion from +umersindo# Records sho( that alvador Dellota also a resondent reresented ./ his heirs leased this area from +umersindo#
Dionisia executed a "Deed of 1ort)a)e and Promise 2o ell" ell" in favor of alvador over a 30,000-square meter ortion of !ot o# $%$&, (ithout (ithout secif/in) (hether (hether it included included the 50,000-square 50,000-square ortion sold (ith (ith ri)ht of redemtion to +umersindo# +umersindo# Dionisia filed (ith the then Court of 4irst Instance, ranch %, Roxas Cit/, a comlaint for recover/ of ossession and dama)es dama)es (ith an alicati alication on for a (rit of relimin reliminar/ ar/ mandator/ mandator/ in6unction in6unction a)ainst a)ainst resonden resondentt alvador alvador D# Dellota, Dellota, reresented ./ his (ife +enoveva D# Dellota and their children# 2he trial court rendered its Decision in favor of Petitioner# Court of 7eals rendered a Decision affirmin) in toto the 6ud)ment of the trial court# ISSUE8 9: the Deed of ale (ith Ri)ht of Redemtion is an equita.le mort)a)e under the la(# HELD: YES# 7R2# $;0% of the e( Civil Code#
4ollo(in) De :camo and uenaventura, this Court finds no co)ent reason to conclude that the $3*3 rice of P5,&00#00 as a)reed uon ./ the arties (as unreasona.le or unusuall/ inadequate# 1oreover, under the rules of evidence, it is resumed that a erson ta
() TO!AS ". CHUA vs. COURT CO URT OF A##EALS A##EALS $%& ENCARNACION E NCARNACION VALDES'CHOY VALDES'CHOY '''' &*o $+$,$ -o.. /o0-$%- $s *2% &-$s :) FACTS8 Resondent Valdes-Cho/ advertised for sale her arahernal house and lot in an !oren=o Villa)e, 1a
00,000#00 a/a.le in cash# !ater, Valdes Valdes-Cho/ received from Chua a chec< for P$00,000#00# 2he receit evidencin) the transaction, si)ned ./ Valdes-Cho/ Valdes-Cho/ as seller, and Chua as .u/er#
Chua secured from PCom PCom a mana)er?s mana)er?s chec< for P*>0,000#00# P*>0,000#00# tran)el/ tran)el/,, after after securin) securin) the mana)er?s chec<, Chua immediatel/ )ave PCom a ver.al sto a/ment order claimin) that this mana)er?s chec< for P*>0,000#00 "(as lost and@or mislaced#" 'ence, 7sst# 7sst# VP Aulie C# Pe notified in (ritin) the PCom :erations +rou of Chua?s sto a/ment order# 2hus, Valdes-Cho/ as vendor and Chua as vendee si)ned t(o Deeds of 7.solute ale# 2he arties met a)ain at the office of Valdes-Cho/?s counsel# Chua handed to Valdes-Cho/ the PCom mana)er?s chec< for P*>5,000#00 It (as then also that Chua sho(ed to Valdes-Cho/ Valdes-Cho/ a PCom mana)er?s chec< for P$0,%$5,000#00 reresentin) the .alance of the urchase rice# Chua, ho(ever, did not )ive this PCom mana)er?s chec< to Valdes-Cho/ .ecause the 2C2 (as still re)istered in the name of Valdes-Cho/# Chua required that the Proert/ .e re)istered first in his name .efore he (ould turn over the chec< to Valdes-Cho/# Valdes-Cho/# 2his 2his an)ered Valdes-Cho/ Valdes-Cho/ (ho tore u the Deeds of ale, claimin) that (hat Chua required (as not art of their a)reement# Chua confirmed his sto a/ment order ./ su.mittin) to PCom an affidavit of loss of the PCom 1ana)er?s Chec< for P*>0,000#00# PCom 7ssistant 7ssistant Vice-President Vice-President Pe, ho(ever, testified that the mana)er?s chec<
(as nevertheless honored .ecause Chua su.sequentl/ ver.all/ advised the .an< that he (as liftin) the sto-a/ment order due to his "secial arran)ement" (ith the .an<# Chua filed a comlaint for secific erformance a)ainst Valdes-Cho/ Valdes-Cho/ (hich the trial court dismissed# Valdes Valdes-Cho/ -Cho/ aealed to the Court of 7eals (hich reversed the decision of the trial court# ISSUE: 1# 9: there is a erfected contract of sale or a mere contract to sell# # 9: Valdes-Cho/ ma/ not forfeit the earnest mone/ even if he did not a/ on time# HELD: 1. CONTRACT TO SELL. 7rticle $*>% of the Civil Code rovides that "9henever earnest mone/ is )iven in a contract of sale, it shall .e considered as art of the rice and roof of the erfection of the contract#"
In this case, the earnest mone/ (as )iven in a contract to sell# 2he Receit evidencin) the contract to sell stiulates that the earnest mone/ is a forfeita.le deosit, to .e forfeited if the sale is not consummated should Chua fail to a/ the .alance of the urchase rice# 2he earnest mone/ forms art of the consideration onl/ if the sale is consummated uon full a/ment of the urchase rice# If there is a contract of sale, Valdes-Cho/ Valdes-Cho/ should have the ri)ht to comel Chua to a/ the .alance of the urchase rice# Chua, ho(ever, has the ri)ht to (al< a(a/ from the transaction, (ith no o.li)ation to a/ the .alance, althou)h he (ill forfeit the earnest mone/# Clearl/, Clearl/, there is no contract of sale# 2he earnest mone/ (as )iven in a contract to sell, and thus 7rticle $*>%, (hich sea
ection &*-a of the IRC, the last sentence of (hich rovides, that "Bthe amount reali=ed from the sale or other disosition of roert/ shall .e the sum of mone/ received lus the fair marF of the urchase rice, is not customar/ in a sale of real estate# uch a condition, not secified in the contract to sell as evidenced ./ the Receit, cannot .e considered art of the "omissions of stiulations (hich are ordinaril/ esta.lished" ./ usa)e or custom#*$ 9hat is increasin)l/ .ecomin) customar/ is to deosit in escro( the .alance of the urchase rice endin) the issuance of a ne( certificate of title in the name of the .u/er# Valdes-Cho/ aldes-Cho/ su))ested this solution .ut unfortunatel/ unfortunatel/,, it dre( dre( no resonse from from Chua#
(3) HIERS OF SEVERINA SAN !IGUEL vs CA G.R. No. 13654. FACTS: Dominador, et al# filed a etition (ith the Court of 4irst Instance, Cavite, as a land re)istration court, to issue title over !ots $ and % of !RC Psu-$&$&, in their names# !and Re)istration Commission hereafter !RC rendered a decision directin) the issuance of :ri)inal Certificate of 2itle o# 0-$>$; in the names of Dominador, et al# everina filed (ith the Court of 4irst Instance of Cavite a etition for revie( of the decision alle)in) that the land re)istration roceedin)s (ere fraudulentl/ concealed ./ Dominador from her# 2he court resolved to set aside the decision of !RC and declared the 2Itle as null and void#
2he Re)ister of Deeds of Cavite issued 2ransfer Certificate of 2itle o# 2-%%&5$$ in the names of everina and her heirs# !ater the trial court issued an order in favor of everinas heirs# everinas heirs, decided not to ursue the (rits of ossession and demolition and entered into a comromise (ith Dominador, et al# Pursuant to the
ISSUE: 9: the the everinas has claim on the # 7rticle $*53# 7rticle $*35# 7rticle $*05# 7rticle $$>&#
Gnder the facts of the case, everinas heirs are not in a osition to transfer title# 9ithout assin) on the question of (ho actuall/ o(ned the land covered ./ !RC Psu -$&$%, (e note that there is no roof of o(nershi in favor of everinas heirs# In fact, it is a certain Emiliano Eu)enio, (ho holds a tax declaration over the said land in his name# 2hou)h tax declarations do not rove o(nershi of the roert/ of the declarant, tax declarations and receits can .e stron) evidence of o(nershi of land (hen accomanied ./ ossession for a eriod sufficient for rescrition# everinas heirs have nothin) to counter this document#
(4) Ro0o v. CA G.R. No. 15757 Nov,0 3 199 8. V-2
F$-s: 7 Deed of Conditional ale (as entered into ./ etitioner Vir)ilio Romero, and rivate resondent Enriqueta Chua Vda de :n)sion for the sale of a arcel of land in Paranaque to .e used . / the former as a (arehouse for his erlite .usiness#
Romero aid P50< uon the si)nin) of the contract for the filin) of e6ectment case a)ainst the ille)al settlers in the su.6ect roert/ as a)reed to ./ the arties# It (as li
7 sale is at once erfected (hen a erson the seller o.li)ates himself, for a rice certain, to deliver and to transfer o(nershi of a secified thin) or ri)ht to another the .u/er over (hich the latter a)rees# In determinin) the real character of the contract, the title )iven to it ./ the arties is not as much si)nificant as its su.stance# 4or examle, a deed of sale, althou)h denominated as a deed of conditional sale, ma/ .e treated as a.solute in nature, if title to the roert/ sold is not reserved in the vendor or if the vendor is not )ranted the ri)ht to unilaterall/ rescind the contract redicated on the fulfillment or non-fulfillment, as the case ma/ .e, of the rescri.ed condition# 2he term "condition" in the context of a erfected contract of sale ertains, in realit/, to the comliance ./ one art/ of an underta
4rom the moment the contract is erfected, the arties are .ound not onl/ to the fulfillment of (hat has .een exressl/ stiulated .ut also to all the consequences (hich, accordin) to their nature, ma/ .e in
+#R# o# $;5>>3 etem.er %0, %005 J7RE-72I7+:, A#
F$-s: :n 4e.ruar/ $%, $33K, resondent 7llan G# 2/ (rote to aco.ia a letter exressin) his intention to acquire one Class 7 share of 2rue orth +olf and Countr/ Clu. and accordin)l/ aid the reservation fee of P$>0,000#00#
2hrou)h letters dated 1a/ %>, $33K and Aul/ *, $33K, aco.ia assured its shareholders that the develoment of 2rue orth (as roceedin) on schedule that the )olf course (ould .e la/a.le ./ :cto.er $333# :n etem.er $, $33K, aco.ia aroved the urchase alication and mem.ershi of resondent for P;00,000#00, su.6ect to certain terms and conditions# 2he notice of aroval rovided8 1.
Approval of an application to purchase golf/country club shares is subjected to the full payment of the total purchase price. 2. Your reserved share shall be considered withdrawn and may be deemed cancelled should you fail to settle your obligation within 15 days from due date, or failure to cover the value of the postdated cheques upon their maturity, or your failure to issue the required postdated cheques. 3. e will underta!e to e"ecute the corresponding sales documents/ #eed of Absolute $ale covering the reserved shares upon full payment of the total purchase price.
'o(ever, on Aanuar/ $%, $33>, resondent notified aco.ia that he is rescindin) the contract and sou)ht refund of the a/ments alread/ made due to the latterHs failure to comlete the ro6ect on time as reresented# !etters (ere sent ./ aco.ia to resondent assurin) him of the comletion and oerations of the )olf course in $333# ot(ithstandin), resondent notified aco.ia on 7ril $K, $33> that he had stoed a/ment on the 5 ost dated chec
ince the a)reement .et(een aco.ia and 2/ is a contract to sell, the full a/ment of the urchase rice arta
In a contract to sell, the rosective seller does not consent to transfer o(nershi of the roert/ to the .u/er until the haenin) of an event, (hich for resent uroses, is the full a/ment of the urchase rice# 9hat the seller a)rees or o.li)es himself to do is to fulfill his romise to sell the su.6ect roert/ (hen the entire amount of the urchase rice is delivered to him# Gon the fulfillment of the susensive condition, o(nershi (ill not automaticall/ transfer to the .u/er althou)h the roert/ ma/ have .een reviousl/ delivered to him# 2he rosective seller still has to conve/ title to the rosective .u/er ./ enterin) into a contract of a.solute sale# 7s sho(n, 2/ did not a/ the full urchase rice (hich is his o.li)ation under the contract to sell, therefore, it cannot .e said that aco.ia .reached its o.li)ation# o o.li)ations arose on its art .ecause resondents non-fulfillment of the susensive condition rendered the contract to sell ineffective and unerfected# Indeed, there can .e no rescission under 7rticle $$3$ of the Civil Code .ecause until the haenin) of the condition, i#e# full a/ment of the contract rice, aco.ias o.li)ation to deliver the title and o.6ect of the sale is not /et extant# 7 non-existent o.li)ation cannot .e su.6ect of rescission# 7rticle $$3$ sea
ometime in $3;%, a t(o-hectare ortion of the roert/ (as sold . / the etitioner to the 1unicialit/ of Isulan, Province of ultan Ludarat throu)h then Isulan 1a/or Datu 7matuan under a Deed of ale executed on Aul/ $>, $3;%, (hich state8 %&hat for and in consideration of the sum of &'()) &'*+$A# -)$*$ -0,222.223, -hilippine 4urrency, value to be paid and deliver to me, and of which receipt of which shall be ac!nowledged by me to my full satisfaction by the +646-A7 8*9)()& *: 6$+7A, represented by the unicipal ayor, #atu $ama Ampatuan, hereinafter referred to as the 9)#)), 6 hereby sell, transfer, cede, convey and assign as by these presents do have sold, transferred, ceded, conveyed and assigned, an area of &* ;3 hectares, more or less, to and in favor of the +646-A7 8*9)()& *: 6$+7A, her sic3 heirs, assigns and administrators to have and to hold forevery sic3 and definitely, which portion shall be utili
7 contract of sale is defined under 7rticle $*5> of the Civil Code N/ the contract of sale, one of the contractin) arties o.li)ates himself to transfer the o(nershi of and to deliver a determinate thin), and the other to a / therefore a rice certain in mone/ or its equivalent#
2he elements of a contract of sale are8 a3 consent or meeting of the minds, that is, consent to transfer ownership in e"change for the price> b3 determinate subject matter> and c3 price certain in money or its equivalent. 7 contract to sell, on the other hand, is defined ./ 7rticle $*K3 of the Civil Code8 A0 bilateral contract whereby the prospective seller, while e"pressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property e"clusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price. In a contract of sale, the title to the roert/ asses to the .u/er uon the deliver/ of the thin) sold, (hereas in a contract to sell, the o(nershi is, ./ a)reement, retained ./ the seller and is not to ass to the vendee until full a/ment of the urchase rice# 2he Deed of ale executed ./ the etitioner and the resondent is a erfected contract of sale, all its elements .ein) resent# 2here (as mutual a)reement .et(een them to enter into the sale, as sho(n ./ their free and voluntar/ si)nin) of the contract# 2here (as also an a.solute transfer of o(nershi of the roert/ ./ the etitioner to the resondent as sho(n in the stiulation8 N " " " 6 petitioner0 hereby sell, transfer, cede, convey and assign as by these presents do have sold, transferred, ceded, conveyed and assigned, " " ".= 2here (as also a determinate su.6ect matter, that is, the t(o-hectare arcel of land as descri.ed in the Deed of ale# !astl/, the rice or consideration is at P&,000#00, (hich (as to .e aid after the execution of the contract# 2he fact that no exress reservation of o(nershi or title to the roert/ can .e found in the Deed of ale .olsters the a.sence of such intent, and the contract, therefore, could not .e one to sell# 'ad the intention of the etitioner .een other(ise, he could have8 $ immediatel/ sou)ht 6udicial recourse to revent further construction of the municial .uildin) or % ta
the vendors could no lon)er le)all/ comel 2an to a/ the .alance of the urchase rice as a result of the le)al encum.rance (hich attached to the title of the roert/# ince 2ans refusal to a/ (as due to the suervenin) event of a le)al encum.rance on the roert/ and not throu)h his o(n fault or ne)li)ence, the court find and so hold that the forfeiture of 2ans do(n a/ment (as clearl/ un(arranted#
() (C$,$- vs. T$,2
(9) C$s: Fo0-2%$-o
(15) S#OUSES NONATO V. IAC > INVESTOR?S FINANCE COR# 145 SCRA (19)
FACTS: • In $3K;, ouses Restituto onato and Ester onato urchased a vol
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onato, in their defense, ar)ued that (hen the coman/ reossessed the car, I4C had, ./ that act, effectivel/ cancelled the sale of the vehicle# 7s such, it (as .arred from exactin) the recover/ of the unaid .alance of the urchase rice as mandated ./ 7rt $*>*# 2he trial court rendered in favor of I4C and ordered the souses onato a/ the .alance of the urchase rice of the car (ith interest# C7 affirmed the same#
ISSUE: 9: a vendor or his assi)nee, (ho had cancelled the sale of a motor vehicle for failure of the .u/er to a/ t(o or more of the stiulated installments, ma/ also demand a/ment of the .alance of the urchase rice HELD: o# 2he alica.le la( in the case at .ar is 7rt $*>* (hich rovides that8 In a contract of sale of ersonal roert/ the rice of (hich is a/a.le in installments, the vendor ma/ exercise an/ of the follo(in) remedies8 $ Exact fulfillment of the o.li)ation, should the vendee fail to a/ % Cancel the sale, should the vendee?s failure to a/ cover t(o or more installments & 4oreclose the chattel mort)a)e on the thin) sold, if one has .een constituted, should the vendee?s failure to a/ cover t(o or more installments# In this case, he shall have no further action a)ainst the urchaser to recover an/ unaid .alance of the rice# 7n/ a)reement to the contrar/ shall .e void# 2his rovision means that should the vendee or the urchaser of a ersonal roert/ default in the a/ment of t(o or more of the a)reed installments, the vendor or the seller has the otion to avail an/ of these & remediesOeither to exact fulfillment ./ the urchaser of the o.li)ation, or to cancel the sale, or to foreclose the mort)a)e on the urchased ersonal roert/, if one (as constituted# 2hese remedies have .een reco)ni=ed as an alternative, not cumulative, that the exercise of one should .ar the exercise of the others#
In the resent case, it is not disuted that I4C had ta
(11) G.R. No. L'431 !$* 6 1977 INDUSTRIAL FINANCE COR#ORATION etitioner,
vs# HON. #EDRO A. RA!IRE@ 82& o; -+ Co20- o; F0s- %s-$% o; !$%$ $%& CONSUELO ALCO
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:n Decem.er *, $3K0 7rnaldo Di=on sold to Consuelo 7lco.a his $3;; model Chevrolet car for P$&,$5K#>3, a/a.le in ei)hteen monthl/ installments, (hich (ere secured ./ a chattel mort)a)e on the car#
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:n that same date, Di=on assi)ned for ten thousand esos to Industrial 4inance Cororation all his ri)hts and interest in the chattel mort)a)e# Consuelo 7lco.a defaulted in the a/ment of the first four installments# 'ence, the (hole o.li)ation .ecame due and demanda.le#
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7s of 4e.ruar/ %K, $3K% Consuelo 7lco.a o(ed Industrial 4inance Cororation the sum of PK,;K>#05 #
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:n ovem.er %0, $3K$, or less than a /ear after Industrial 4inance Cororation had discounted Consuelo 7lco.a?s romissor/, note to Di=on, the cororation sued her in the Court of 4irst Instance of 1anila# 2he comlaint, a rinted form used ./ the cororation in collection cases, is denominated "relevin (ith dama)es"#
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In its comlaint Industrial 4inance Cororation ra/ed for alternative reliefs# 2he main o.6ective of its comlaint (as recover/ of the mort)a)ed car ./ means of a (rit of relevin#
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Industrial 4inance Cororation ra/ed that, if the car could not .e recovered ./ means of relevin, then Consuelo 7lco.a should .e ordered to a/ the cororation the sum of P$$,0>&#&>, lus t(elve ercent interest per annum, dama)es, and attorne/?s fees in the sum of P%,KK0#>5# 2here (as no ra/er for the foreclosure of the mort)a)e, a relief that should .e invo, Rule ;> of the Rules of Court#
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2he lo(er court issued the (rit of relevin# ut the sheriff (as not a.le to sei=e the mort)a)ed car# Consequentl/, there (as no extra6udicial foreclosure of the mort)a)e since, for that urose, ossession of the car ./ the sheriff is necessar/#
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Consuelo 7lco.a (as declared in default# :n the .asis of the cororation?s evidence, the trial court rendered 6ud)ment, orderin) her to a/ the cororation the sum of PK,;K>#05, lus t(elve ercent interest per annum from the filin) of the comlaint#
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2hat 6ud)ment .ecame final and executor/# :n etem.er %K, $3K&, or lon) after the 6ud)ment had .ecome final, she aid Industrial 4inance Cororation the sum of P%,000# 2he lo(er court issued (rits of execution# 2he (rits (ere returned unsatisfied#
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7 second alias (rit of execution (as issued# 2he sheriff (as a.le to lev/ uon the mort)a)ed car (hich (as then in the ossession of the 7co 1otor ervice of Da)uan Cit/# 7t the execution sale held on 7ril %5, $3K* Industrial 4inance Cororation .ou)ht the mort)a)ed car for P*,000#
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'o(ever, in order to ta
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2he lo(er court denied the motion for a third alias (rit of execution# It treated the execution sale as a "virtual foreclosure of the chattel mort)a)e" (hich, althou)h not .eneficial to the mort)a)ee, Industrial 4inance Cororation, .arred it from recoverin) the deficienc/ under article $*>*# 2hat order of denial is assailed ./ the cororation in the instant certiorari case#
ISSUE: 9: etitioner is entitled for the deficienc/# RULING:
'ere, there (as no extra6udicial foreclosure of the mort)a)e# Consuelo 7lco.a, the mort)a)ee, acted erversel/ in not surrenderin) the mort)a)ed car to the cororation and in reventin) extra6udicial foreclosure# 'ad she comlied (ith the (rit of relevin, then the cororation could have foreclosed the mort)a)e and, in that event, she (ould not .e lia.le for an/ deficienc/# ut she violated the mort)a)e ./ removin) the car from her residence at & +ladiola treet, Roxas District, Mue=on Cit/# he did not coml/ (ith the stiulation that, uon her default, the car should .e delivered, on demand, to the mort)a)ee in 1anila# 2he cororation?s action (as for secific erformance or fulfillment of the o.li)ation and not for 6udicial foreclosure Consuelo 7lco.a?s a/ment of P%,000 on account of the mone/ 6ud)ment a)ainst her si)nified that she acquiesced in the action for secific erformance# he cannot no( .e heard to sa/ that the 6ud)ment resultin) from that action could not .e enforced .ecause the mort)a)ees had oted for foreclosure of the mort)a)e# 2he Civil Code rovides# 7R2# $*>*# In a contract of sale of ersonal roert/ the rice of (hich is a/a.le in installments, the vendor ma/ exercise an/ of the follo(in) remedies8 $ Exact fulfillment of the o.li)ation, should the vendee fail to a / % Cancel the sale, should the vendee?s failure to a/ cover t(o or more installments & 4oreclose the chattel mort)a)e on the thin) sold, if one has .een constituted, should the vendee?s failure to a/ cover t(o or more installments# In this case, he shall have no further action a)ainst the urchaser to recover an/ unaid .alance of the rice# 7n/ a)reement to the contrar/ shall .e void# $*5*-7-a# 7ccordin) to article $*>*, it is onl/ (hen there has .een a foreclosure that the mort)a)or is not lia.le for an/ deficienc/# In this case, there (as no foreclosure# 2he mort)a)ee evidentl/ chose the remed/ of secific erformance# It levied uon the car ./ virtue of an execution and not as an incident of a foreclosure roceedin)# It is entitled to an alias (rit of execution for the ortion of the 6ud)ment that has not .een satisfied# 2he rule is that in installment sales, if the action instituted is for secific erformance and the mort)a)ed roert/ is su.sequentl/ attached and sold, the sale thereof does not amount to a foreclosure of the mort)a)e# 'ence, the seller-creditor is entitled to a deficienc/ 6ud)ment outhern 1otors, Inc# vs# 1oscoso, $$% Phil# 3*#
9'ERE4:RE, the trial court?s order den/in) the motion for a third (rit of execution is reversed and set aside# Costs a)ainst resondent Consuelo 7lco.a#
(1) A-v R$-* > Dv- Co0/o0$-o% vs. D$0o*$ Do-0%: 2he failure to cancel the contract in accordance (ith the rocedure rovided . / la( t(in requirements, the court held that the contract to sell .et(een the arties remains valid and su.sistin)# 7s Daro/a lost her chance to a/ the .alance, since the roert/ (as sold to a &rd art/, it is onl/ 6ust and equita.le that the etitioner .e ordered to refund Daro/a the actual value of the lot resold or at the value it (as sold to the % nd .u/er# F$-s8 •
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7ctive Realt/ entered into a Contract to ell (ith Daro/a, (here./ the latter a)reed to .u/ a lot for P%%*,0%5#00 in etitionerHs su.division and that the resondent shall a/ a do(n a/ment uon execution of the contract and the .alance in sixt/ ;0 monthl/ installments (hich totalled to a fi)ure hi)her than that stated as the contract rice# 'o(ever, resondent (as in default reresentin) three & monthl/ amorti=ations# Petitioner moved for the cancellation of their contract to sell# Petitioner refused the resondentHs offer to a/ the remainin) amount as it has sold the lot to another .u/er# Resondent filed a comlaint a)ainst etitioner .efore the '!GR for the execution of a final Deed of 7.solute ale in resondentHs favor after she a/s an/ .alance that ma/ still .e due from her# '!GR 7r.iter found for the resondent and ruled that the cancellation of the contract to sell (as void as etitioner failed to a/ the cash surrender value to resondent as mandated ./ la(# :n aeal, the '!GR oard of Commissioners set aside the 7r.iterHs Decision (hich did not al/ the remedies rovided under the 1aceda !a( and found .oth arties (ere at fault, i#e#, resondent incurred in dela/ in her installment a/ments and resondent failed to send a notari=ed notice of cancellation# 2he oard ordered etitioner to refund to the resondent one half of the total amount she has aid# Resondent aealed to the :ffice of the President (hich modified the Decision of the '!GR# 2he C: .et(een the arties su.sisted and concluded that resondent (as entitled to the lot after a/ment of her outstandin) .alance due to etitionerHs failure to coml/ (ith the le)al requisites for a valid cancellation of the contract# 'o(ever, as the lot (as alread/ sold to another erson and that the actual value of the lot as of the date of the contract (as P$,K00#00 er square meter, etitioner (as ordered to refund to the resondent the amount of P>K5,000#00, the true and actual value of the lot as of the date of the contract, (ith interest at $%F er annum comuted from 7u)ust %;, $33$ date of filin) of the comlaint until full/ aid, or to deliver a su.stitute lot at the choice of resondent# C7 ruled a)ainst etitioner onl/ on the .asis of form and su.stance#
Iss28 9: the etitioner can .e comelled to refund to the resondent the value of the lot or to deliver a su.stitute lot at resondentHs otion# H&8 C found for the resondent and ruled in the affirmative# 2he contract to sell in the case at .ar is )overned ./ the 1aceda !a(# 1ore secificall/, ection & of R#7# o# ;55% rovided for the ri)hts of the .u/er in case of default in the a/ment of succeedin) installments, (here he has alread/ aid at least t(o % /ears of installments# 2he records clearl/ sho(ed that the etitioner failed to coml/ (ith the mandator/ t(in requirements for a valid and effective cancellation under the la(---that etitioner 4ailed to send a notari=ed notice of cancellation and 4ailed to refund the cash surrender value since it (as onl/ durin) the reliminar/ hearin) of the case .efore the '!GR ar.iter (hen etitioner offered to a/ the cash surrender value
1oreover, there (as no formal notice of cancellation or court action to rescind the contract and therefore C found it ille)al and iniquitous that etitioner, (ithout coml/in) (ith the mandator/ le)al requirements for cancellin) the contract, forfeited .oth resondentHs land and hard-earned mone/ after she has aid for, not 6ust the contract rice, .ut more than the consideration stated in the contract to sell# 2hus, for failure to cancel the contract in accordance (ith the rocedure rovided ./ la(, C hold that the contract to sell .et(een the arties remains valid and su.sistin)# 4ollo(in) ection &a of R#7# o# ;55%, resondent has the ri)ht to offer to a/ for the .alance of the urchase rice, (ithout interest, (hich she did in this case#
:rdinaril/, etitioner (ould have had no other recourse .ut to accet a/ment# 'o(ever, resondent can no lon)er exercise this ri)ht as the su.6ect lot (as alread/ sold ./ the etitioner to another .u/er (hich lot (as valued at P$,K00#00 er square meter# 7s resondent lost her chance to a/ for the .alance of the P>K5,000#00 lot, it is onl/ 6ust and equita.le that the etitioner .e ordered to refund to resondent the actual value of the lot resold, i#e#, P>K5,000#00, (ith $%F interest er annum comuted from 7u)ust %;, $33$ until full/ aid or to deliver a su.stitute lot at the otion of the resondent#
(13) #CI L$s% $%& F%$% I%. Vs. G0$;;' B C0$-v I$% I%. 82* 1 557
GR 1461
F0s- Dvso% G$0$ 8 F$-s:
-:n Decem.er *, $33;, etitioner PCI !E7I+ and resondent +IR744E entered into a 7ease Agreement, (here./ the former leased out to the latter one $ set of $ilicon 'igh 6mpact 8raphics and accessories (orth P&,300,00#00 and one $ unit of *"berry 4inescan ?@2212 (orth P;,500,000#00# - 7 /ear into the life of the !ease 7)reement, +IR744E defaulted in its monthl/ rental-a/ment o.li)ations# 7nd follo(in) a three-month default, PCI !E7I+ addressed a formal a/-or-surrender-equiment t/e of demand letter dated 4e.ruar/ %*, $33> to +IR744E# - 2he demand (ent unheeded# - PCI !easin) instituted a case a)ainst +IR744E# PCI ra/ed for the issuance of a (rit of relevin for the recover/ of the leased roert/ - Gon PCI !E7I+Hs ostin) of a relevin .ond, the trial court issued a (rit of relevin, avin) the (a/ for PCI !E7I+ to secure the sei=ure and deliver/ of the equiment covered . / the .asic lease a)reement# - Instead of an ans(er, +IR744E filed a otion to #ismiss,ar)uin) that the sei=ure of the t(o % leased equiment stried PCI !E7I+ of its cause of action# -+IR744E ar)ues that, ursuant to 7rticle $*>* of the Civil Code on installment sales of ersonal roert/, PCI !E7I+ is .arred from further ursuin) an/ claim arisin) from the lease a)reement and the comanion contract documents, addin) that the a)reement .et(een the arties is in realit/ a lease of mova.les (ith otion to .u/# -+IR744E asserts in its 1otion to Dismiss that the civil comlaint filed ./ PCI !E7I+ is roscri.ed ./ the alication to the case of 7rticles $*>* and $*>5, supra, of the Civil Code# - PCI !easin) on the other hand maintains that its contract (ith +IR744E is a straight lease without an option to buy. - etitioner contends that the financial leasin) arran)ement it concluded (ith the resondent reresents a strai)ht lease covered ./ R#7# o# 53>0, the :inancing 4ompany Act , as last amended ./ R#7# o# >55;, other(ise 0 defines and authori=es its existence and .usiness# -the trial court )ranted +IR744EHs motion to dismiss - motion for reconsideration (as denied, hence this etition for revie(#
Iss2: 9hether the a)reement .et(een PCI !easin) and +IR744E is )overned ./ 7rticles $*>* and $*>5 of the Civil Code H&: Petition denied# 2rial CourtHs decision affirmed R$-o:
-2he PCI !E7I+- +IR744E lease a)reement is in realit/ a lease (ith an otion to urchase the equiment# 2his has .een made manifest ./ the actions of the etitioner itself, foremost of (hich is the declarations made in its demand letter to the resondent# 2here could .e no other exlanation than that if the resondent aid the .alance, then it could 5 of the Civil Code should al/# - 2he resent case reflects a situation (here the financin) coman/ can (ithhold and conceal - up to the last moment - its intention to sell the roert/ su.6ect of the finance lease, in order that the rovisions of the (ecto 7aw ma/ .e circumvented# It ma/ .e, as etitioner ointed out, that the .asic Nlease a)reementQ does not contain a Nurchase otionQ clause# 2he a.sence, ho(ever, does not necessaril/ ar)ue a)ainst the idea that (hat the arties are into is not a strai)ht lease, .ut a lease (ith otion to urchase# 2his Court has, to .e sure, lon) .een a(are of the ractice of vendors of ersonal roert/ of denominatin) a contract of sale on installment as one of lease to revent the o(nershi of the o.6ect of the sale from assin) to the vendee until and unless the rice is full/ aid# -ein) leases of ersonal roert/ (ith otion to urchase as contemlated in the a.ove article, the contracts in question are su.6ect to the rovision that (hen the lessor in such case Nhas chosen to derive the lessee of the en6o/ment of such ersonal roert/,Q Nhe shall have no further actionQ a)ainst the lessee Nfor the recover/ of an/ unaid .alanceQ o(in) ./ the latter, Na)reement to the contrar/ .ein) null and void#Q -In choosin), throu)h relevin, to derive the resondent of ossession of the leased equiment, the etitioner (aived its ri)ht to .rin) an action to recover unaid rentals on the said leased items# Para)rah &, 7rticle $*>* in relation to 7rticle $*>5 of the Civil Code, (hich (e are hereunder re-reroducin), cannot .e an/ clearer# 7R2# $*>*# In a contract of sale of ersonal roert/ the rice of (hich is a/a.le in installments, the vendor ma/ exercise an/ of the follo(in) remedies8 xxx
xxx
xxx
& 4oreclose the chattel mort)a)e on the thin) sold, if one has .een constituted, should the vendee?s failure to a/ cover t(o or more installments# In this case, he shall have no further action a)ainst the urchaser to recover an/ unaid .alance of the rice# 7n/ a)reement to the contrar/ shall .e void# 7R2# $*>5# 2he recedin) article shall .e alied to contracts urortin) to .e leases of ersonal roert/ (ith otion to .u/, (hen the lessor has derived the lessee of the ossession or en6o/ment of the thin)# -7s (e articulated in )lisco &ool anufacturing 4orp. v. 4ourt of Appeals, the remedies rovided for in 7rticle $*>* of the Civil Code are alternative, not cumulative# 2he exercise of one .ars the exercise of the others# 2his limitation alies to contracts urortin) to .e leases of ersonal roert/ (ith otion to .u/ ./ virtue of the same 7rticle $*>5# 2he condition that the lessor has derived the lessee of ossession or en6o/ment of the thin) for the urose of al/in) 7rticle $*>5 (as fulfilled in this case ./ the filin) ./ etitioner of the comlaint for a sum of mone/ (ith ra/er for relevin to recover ossession of the office equiment# / virtue of the (rit of sei=ure issued ./ the trial court, the etitioner has effectivel/ derived resondent of their use, a situation (hich, ./ force of the (ecto 7aw, in turn recludes the former from maintainin) an action for recover/ of Naccrued rentalsQ or the recover/ of the .alance of the urchase rice lus interest# 2he imeratives of honest dealin)s )iven rominence in the Civil Code under the headin)8 'uman (elations, rovide another reason (h/ (e must hold the etitioner to its (ord as em.odied in its demand letter# Else, (e (ould (itness a situation (here even if the resondent surrendered the equiment voluntaril/, the etitioner can still sue uon its claim# 2his (ould .e most unfair for the resondent# 9e cannot allo( the etitioner to rene)e on its (ord# Jet more than that, the ver/ (ord NorQ
as used in the letter conve/s distinctly its intention not to claim .oth the unaid .alance and the equiment# It is not difficult to discern (h/8 if (e add u the amounts aid ./ the resondent, the residual value of the roert/ recovered, and the amount claimed ./ the etitioner as sued uon herein for a total of P%$,KK3,0%3#*K, then it (ould end u ma
(14) SERAS#I vs. COURT OF A##EALS G.R. 1365 A/0 555 FACTS:
2he lots in question (ere ori)inall/ o(ned ./ 1arcelino Recasa and are .oth situated in aran)a/ !ana), an)a, 7 his intestate estate (as artitioned into three arts to his corresondin) heirs in his 2hree & marria)es durin) his lifetime# In the same /ear, Patronicio Recasa the reresentin) the heirs first marria)e sold their share to Dominador Recasa reresentin) heirs in the second marria)e# In $350, Dominador sold their share to Muirico and Purificacion erasi# In $35>, the erasis acquired a loan from Lali.o Rural an<, Inc# LRI the su.6ect land .ein) the securit/, ho(ever, the/ failed to a/ the loan and the roert/ (as foreclosed and sold to the hi)hest .idder LRI, and su.sequentl/ sold the same to 1anuel Rata .rother-in-la( of Muirico erasi (ho allo(ed Muirico to administer the same# In $3K*, rivate resondent imeon Recasa 1arcelinoHs heir ./ his third marria)e too< advanta)e of the fact that Muirico (as aral/=ed due to a stro& the erasis (ere a.le to urchase the lands from 1anuel Rata and thereafter filed a case a)ainst imeon Recasa for recover/ of ossession of the lands# R2C ruled in favor of erasi, .ut C7 reversed on aeal# ISSUE: 9hether the there (as acquisitive rescrition in favor of imeon Recasa HELD: o, there (as no acquisitive rescrition
7cquisitive rescrition of dominion and other real ri)hts ma/ .e ordinar/ or extraordinar/# In the case at .ar, resondent claim ordinar/ rescrition throu)h adverse ossession of the roert/ for more than 2en $0 /ears under 7rt# $$&* of the Civil Code# 'o(ever, for uroses of rescrition, resondent (as not a.le to rove his 6ust title or )ood faith required ./ acquisitive rescrition, as he did not acquire ossession of the roert/ throu)h the modes reco)ni=ed ./ the Civil Code for acquisition of o(nershi or other real ri)hts, namel/8 :ccuation Intellectual creation !a( Donation uccession 2radition in consequence of certain contracts Prescrition
7lso, under 7rticle K$*, the o(nershi of a iece of land cannot .e acquired ./ occuation, nor can resondent claim that he acquired his ri)ht throu)h succession .ecause he (as an heir to the ori)inal o(ner, remem.er that the roert/ (as validl/ artitioned and the su.6ect lots are not art of those (hich he inherited, and lastl/, he cannot .e considered in )ood faith as he entered the roert/ (ithout the & in onl/ 3 /ears# ANOTHER ISSUE: (hether rivate resondent has acquired the o(nershi of the t(o lands ./ rescrition# HELD:
o# :rdinar/ acquisitive rescrition requires ossession of thin)s in )ood faith and (ith 6ust title for the time fixed ./ la(# 7rt# $$&*# :(nershi and other real ri)hts over immova.le roert/ are acquired ./ ordinar/ rescrition throu)h ossession of ten /ears# 7rt# $$&K# :(nershi and other real ri)hts over immova.les also rescri.e throu)h uninterruted adverse ossession thereof for thirt/ /ears, (ithout need of title or of )ood faith# 2hus, acquisitive rescrition of dominion and other real ri)hts ma/ .e ordinar/ or extraordinar/, deendin) on (hether the roert/ is ossessed in )ood faith and (ith 6ust title for the time fixed ./ la(#BPrivate resondent contends that he acquired the o(nershi of the questioned roert/ ./ ordinar/ rescrition throu)h adverse ossession for ten $0 /ears# 2he contention has no merit, .ecause he has neither 6ust title nor )ood faith# 7s 7rt# $$%3 rovides8 uremax 4or the uroses of rescrition, there is 6ust title (hen the adverse claimant came into ossession of the roert/ throu)h one of the modes reco)ni=ed . / la( for the acquisition of o(nershi or other real ri)hts, .ut the )rantor (as not the o(ner or could not transmit an/ ri)ht# In the case at .ar, rivate resondent did not acquire ossession of the roert/ throu)h an/ of the modes reco)ni=ed ./ the Civil Code, to (it8 $ occuation, % intellectual creation, & la(, * donation, 5 succession, ; tradition in consequence of certain contracts, and K rescrition# Private resondent could not have acquired o(nershi over the roert/ throu)h occuation since, under 7rt# K$* of the Civil Code, the o(nershi of a iece of land cannot .e a cquired ./ occuation# or can he .ase his o(nershi on succession for the roert/ (as not art of those distri.uted to the heirs of the third marria)e, to (hich rivate resondent .elon)s# It must .e remem.ered that in the artition of the intestate estate of 1arcelino Recasa, the roerties (ere divided into three arts, each art .ein) reserved for each )rou of heirs .elon)in) to one of the three marria)es 1arcelino entered into# ince the contested arcels of land (ere ad6udicated to the heirs of the first and second marria)es, it follo(s that rivate resondent, as heir of the third marria)e, has no ri)ht over the arcels of land# 9hile, as heir to the intestate estate of his father, rivate resondent (as co-o(ner of all of his fathers roerties, such coo(nershi ri)hts (ere effectivel/ dissolved ./ the artition a)reed uon ./ the heirs of 1arcelino Recasa# either can rivate resondent claim )ood faith in his favor# +ood faith consists in the reasona.le .elief that the erson from (hom the ossessor received the thin) (as its o(ner .ut could not transmit the o(nershi thereof# Private resondent entered the roert/ (ithout the consent of the revious o(ner# 4or all intents and uroses, he is a mere usurer# Aurissc !i
itself is insufficient to ma&, the roert/ (as in the ossession of rivate resondent# 'o(ever, this does not )ive rivate resondent a ri)ht to remain in ossession of the roert/# Petitioners title to the roert/ revails over rivate resondents ossession in fact .ut (ithout .asis in la(# 7s held in aite v. -eterson,(hen the roert/ .elon)in) to a erson is unla(full/ ta
O-o,0 4 1997
1 SCRA 56 #o%%-: RO!ERO 8. (THIRD DIVISION) F$-s: Private resondent 1ar-ic< Investment Cororation is the exclusive and re)istered o(ner of 1ar-ic< u.division in arrio uli, Cainta, Ri=al# :n 1a/ %3, $3;$, rivate resondent entered into ; a)reements (ith etitioner Peole?s Industrial and Commercial Cororation (here./ it a)reed to sell to etitioner ; su.division lots#
4ive of the a)reements stiulate that the etitioner a)reed to a/ rivate resondent for each lot, the amount of PK,&&&#%0 (ith a do(n a/ment of P*>0#00# 2he .alance of P;,>5&#%0 shall .e a /a.le in $%0 equal monthl/ installments of P5K#$$ ever/ &0th of the month, for a eriod of ten /ears# 9ith resect to another lot, the arties a)reed to the urchase rice of PK,K&0#00 (ith a do(n a/ment of P50;#00 and equal monthl/ installments of P;0#%0# 7fter the lase of ten /ears, etitioner still had not full/ aid for the six lots# It had aid onl/ the do(n a/ment and > installments# 7fter a series of ne)otiations .et(een the arties, the/ a)reed to enter into a ne( contract to sell on :cto.er $$, $3>&# 2he contract stiulates that the revious contracts have .een cancelled due to the failure of the urchaser to a/ the stiulated installments# either of the arties si)ned the ne( contract# iatianum issued chec
memorandum# 9hat (as clearl/ roven (as that .oth arties ne)otiated a ne( contract after the termination of the first# 2hus, the fact that the arties tried to ne)otiate a ne( contract indicated that the/ considered the first contract as alread/ cancelled# Petitioner elevated the case to the Court of 7eals (hich affirmed in toto the lo(er court?s decision# Iss2: 9hether or not there (as a erfected and enforcea.le contract of sale on :cto.er $$, $3>& (hich modified the earlier contracts to sell (hich had not .een validl/ rescinded# R2%: 2he contracts to sell of $3;$ (ere cancelled to (hich the arties voluntaril/ .ound themselves# 9hen etitioner failed to a.ide ./ its o.li)ation to a/ the installments rovision o# 3 of the contract automaticall/ too< effect (hich states that Nshould the urchaser fail to ma&# Private resondent?s coman/ la(/er volunteered that after the cancellation of the $3;$ a)reements, the arties should ne)otiate and enter into a ne( a)reement# 'o(ever, after he had drafted the contract and sent it to etitioner, the latter deosited a chec< for do(na/ment .ut its reresentative refused to si)n the reared contract# In the a.sence of roof to the contrar/, this draft contract ma/ .e deemed to em.od/ the a)reement of the arties# Private resondent did not and has not denied the existence of that contract# Gnder these facts, therefore, the arties ma/ ideall/ .e considered as havin) erfected the contract of :cto.er $3>&# Austice and equit/, ho(ever, (ill not .e served ./ a ositive rulin) on the erfection and erformance of the contract to sell# 2here are facts on record rovin) that the arties had not arrived at a definite a)reement# / 7tt/# Villama/or?s admission, the chec; of the Civil Code rovides that a stiulation that the installments or rents aid shall not .e returned to the vendee or lessee shall .e valid insofar as the same ma/ not .e unconsciona.le under the circumstances# 9'ERE4:RE, the instant etition for revie( on certiorari is here./ denied and the questioned Decision of the Court of 7eals is 744IR1ED#
(16) L$o% vs Hoov% Co$o I%&2s-0s I% 349 SCR A 363 F$-s: Petitioner !a)on is a .usinessman and o(ner of commercial .uildin) tacuron, sultan
Comalco on the other hand is a domestic cororation $, !a)on and 'ooven entered into % contracts, .oth denominated roosal, (here./ for a total comsideration of P$0*, >K0#00 'ooven a)reed to sell and install various aluminum material in !a)on?s commercial .uildin) in 2acuron) ultan Ludarat# Gon execution of the contracts, !a)on aid 'ooven *>,000 in advance# !a)on, in his ans(er, denied lia.ilit/ and averred that 'ooven (as the art/ )uilt/ of reach of Contract ./ failin) to deliver and install some of the materials secified in the roosals, that as a consequence he (as
comelled to rocure the undelivered materials from other sources that as re)ards the materials dul/ delivered and installed ./ 'ooven , the/ (ere full/ aid# 'e counterclaimed for actual, moral, exemlar/, temerate and ninal dama)es, as (ell as for attorne/s fees and exenses of liti)ation# Isss2: 9hether all the materials secified in the contracts had .een delivered and installed ./ resondent in etitioner?s
commercial .uildin) in ultan Ludarat# R2%:
4irstl/, the quantit/ of materials and the amounts sated in the deliver/ receits do not tall/ (ith those in the invoices coverin) them, not(ithstandin) that, accordin) to hooven :IC Villanueva, the invoices (ere .ased merel/ on the deliver/ receits# econdl/, the total value of the materials as reflected in all the invoices is $$K, &%3 (hile under the deliver/ receits it is onl/ $$%, >K0#50# Even more stran)e is the fact that hooven instituted the resent action for collection of sum of mone/ a)ainst !a)on onl/ on %* fe. $3>K, or more than 5 /ears after the suosed comletion of the ro6ect# Indeed it is contrar/ to common exerience that a creditor (ould ta
2he/ entered a contract (hich rovides that if the !E:R should desire to sell the leased remises, the !EEE shall .e )iven &0-da/s exclusive otion to urchase the same# Carmelo informed 1a/fair that it (ill sell the roert/ to Equatorial# 1a/fair made
2he sale of the roert/ should .e rescinded .ecause 1a/fair has the ri)ht of first refusal# oth Equatorial and Carmelo are in .ad faith .ecause the/
(1) !$%$ G$s Co0/o0$-o% vs A;0&o C$2/-$% G.R. No. L'4637 D,0 17 193 F$-s:
:n 1a/ &, $3&&, the 1anila Cororation and the defendant-aellant, 7lfredo # Caluitan, entered into a contract of lease# In accordance (ith the terms of .oth contracts, the said defendant aid to the laintiff, (hen the latter delivered to him the stove, the sum of P5, and another sum of P5 (hen the (ater heater NPiccolo Inst# 9ater 'eaterQ (as delivered to him, and monthl/ thereafter, the total of said a/ments amountin) to P*%# 2he :(ner a)rees that at an/ time .efore the exiration of the terms of the lease, the !essee ma/ urchase the said roert/ ./ a/in) to the o(ner, in cash, the full value under as a.ove fixed, less all a/ments theretofore made under this a)reement, for the use of said roert/# ot(ithstandin) reeated demands to a/ alle)ed rentals, due and unaid for months, or to return the stove and the (ater heater, the said defendant aid no heed to said demands and continued to ma
9hether the contract entered into .et(een the laintiff and the defendant contract of lease R2%: No. 2he rice of the stove is P;0 and that of the (ater heater, P35, the said defendant .ein) a.le to urchase said )oods at said rice resectivel/, .efore the exiration of the eriod of the alle)ed lease, deductin) in each case the amounts, alread/ aid therefor# 2he eriods of the alle)ed leases have not .een fixed in the contracts .ut considerin) the rices of the )oods and monthl/ a/ments to .e made, said eriods are the num.er of months (hich (ould result ./ dividin) P;0 ./ P*, (hich is the suosed monthl/ rental of the stove, and P35 ./ P5, (hich is suosed to .e the monthl/ rental of the (ater heater, that is, $5 and $> months, resectivel/#
9hat has )one .efore sho(s that the contracts entered into .et(een the laintiff and the defendant (ith resect to the
() Y%=o% vs SECRETARY OF AGRICULTURE G.R. No. L'3647 FACTS: 2he su.6ect matter of the case at .ar are the same man)rove s(ams (ith an area of a.out ;; hectares, more or less, situated in the rovince of the e)ros :ccidental# 2eofila !on)no de !i)asan and Custodio Doromal filed their alications (ith the ureau of 4isheries for fishond uroses and to utili=e the same# Petitioner-aellant erafin # Jn)son filed a similar alication for fishond ermit follo(ed ./ those of the resondents-aellees, 7nita de +on=ales and Aose 1# !oe=, (ho filed their resective alications (ith the same .ureau#
2he conflictin) claims of the aforesaid arties (ere .rou)ht to the attention of the Director of the ureau of 4isheries (ho issued an order a(ardin) the (hole area in favor of the etitioner-aellant and re6ectin) the claims of the resondentsaellees# ecretar/ of the Deartment of 7)riculture and atural Resources set aside the order of the Director of the ureau of 4isheries and caused the division of the area in question into three ortions )ivin) each art/ an area of one-third $@& of the (hole area covered ./ their resective alications#
ot satisfied (ith one-third of the ;; hectares, 1r# Jn)son filed a etition for certiorari (ith the Court of 4irst Instance a)ainst the Executive ecretar/, :ffice of the President, the ecretar/ of 7)riculture and atural Resources, 7nita V# +on=ales, and Aose 1# !oe=# ISSUE: 9: the Director of 4isheries committed )rave a.use of discretion )ivin) due course to Jn)=on?s alication# HELD: NO. 2he administrative authorities committed no )rave a.use of discretion#
It is elementar/ in the la( )overnin) the disosition of lands of the u.lic domain that until tim.er or forest lands are released as disosa.le and aliena.le neither the ureau of !ands nor the ureau of 4isheries has authorit/ to lease, )rant, sell, or other(ise disose of these lands for homesteads, sales atents, leases for )ra=in) or other uroses, fishond leases, and other modes of utili=ation# 2he riorit/ )iven in ara)rah "d" of ection $* is onl/ for those alications filed so close in time to the actual oenin) of the s(amland for disosition and utili=ation, (ithin a eriod of one /ear, as to .e )iven some , $3*K &# erafin # Jn)son O 1arch $3, $35% *# 7nita V# +on=ales O 1arch $3, $35& 5# Aose 1# !oe= O 7ril %*, $35& 2he man)rove s(amland (as released and made availa.le for fishond uroses onl/ on Aanuar/ $*, $35*# 9hether or not the administrative a)encies could validl/ issue such an administrative order is not challen)ed in this case# 2he validit/ of ara)rah "d" is not in issue .ecause etitioner-aellant Jn)son is clearl/ not covered ./ the rovision# 'is alication (as filed almost t(o /ears .efore the release of the area for fishond uroses# 2he rivate resondents, (ho filed their alications (ithin the one-/ear eriod, do not o.6ect to sharin) the area (ith the etitioner-aellant, in site of the fact that the latter has aarentl/ the least ri)ht to the fishond leases# 7s a matter of fact, the resondent ecretar/?s order states that all three alications must .e considered as havin) .een filed at the same time on the da/ the area (as released to the ureau of 4isheries and to share the lease of the ;; hectares amon) the three of them equall/# (3) EDUARDA DUELLO!E vs.
A/0 9 1963
REGALA 8.: F$-s: In ovem.er $3*5, Eduarda Duellome, entered into a lease contract (ith one ixto Coronel# Gnder the said a)reement, the etitioner a)reed to lease a ortion of her land situated in 2aclo.an Cit/ to ixto Coronel at a rental of P$0#00 er month and (hereon the latter (as to construct a residential house of mixed materials# 2he house (as constructed (ith the exress (ritten consent of the etitioner#
In $350, ixto Coronel and his (ife En)racia Coronel transferred residence to :rmoc Cit/ leavin) to their dau)hter and sonin-la(, resondents, souses ernardina and onifacio +otico, sole occuanc/ of the house#Resondents a)reed to a/ a monthl/ rental of P%0#00# 2he understandin) .et(een them and their arents (as than half of the amount of P$0#00 (ould .e remitted to the etitioner herein as rental for the lot and .alance of P$0#00 to the Coronels# 4rom :ct# $355 to et# $35;, resondents failed to a/ the rentals due to etitioner desite the latterHs reeated demands .ecause of ixtoHs illness 7n e6ectment case (as filed a)ainst the +oticos (hich caused them to sell the house immediatel/ and a/ the rentals due# 2he 12C dismissed the case# :n Aanuar/ 5, $35K, the +oticoHs filed an action for dama)es a)ainst the herein etitioner in the C4I of !e/te# 2he/ char)ed that the suit in the 1unicial Court (as filed "(ith the mali)nant urose of .esmirchin) the )ood reutation of laintiffs" that as a result, the/ had suffered a total of P;;,000#00 in actual, moral and exemlar/ dama)es, la(/er?s fees and costs#
In ans(er to the comlaint, etitioner alle)ed that resondents thru one ixto Coronel, (ho is father-in-la( and father of laintiffs resectivel/, made arran)ement (ith defendant for the rental of defendant?s land (here laintiffs constructed a house#" Iss2: 9hether the lease of a .uildin) necessaril/ includes the lease of the lot on (hich it is .uilt# H&: Jes#
It is oosed to the doctrine consistentl/ adoted ./ this Court that the lease of a .uildin) (ould naturall/ include the lease of the lot and that the rentals of the .uildin) include the rentals of the lot# O 'owever, if the 4ity of anila is to receive the rentals of the building from $eptember B, 1B5@ when the edifice should have been delivered to it, then the 4ity from that date would no longer have any right to the monthly rental on the lot, because the lease of the building would naturally include the lease of the lot. )mphasis supplied. 4ity of anila v. 4han Dian, 8.(. o. 712;E?, Fuly ;@, 1B5E3 &he view ta!en by appellees is untenable for several reasons. 6n the first place, appellees are, as already stated, occupying not only the land of the government, but the building of appellant as well. 6f appellees are in possession of the land, it is only because appellantGs building stands thereon. &heir possession of the land is therefore, dependent on and cannot be dissociated from their possession of the building....H )mphasis supplied. &he -hil. 4onsolidated :reight 7ines, 6nc. v. )miliano Ajon, et al., supra.3 4urthermore, under our Civil Code, the occuanc/, of a .uildin) or house not onl/ su))ests .ut imlies the tenanc/ or ossession in fact of the land on (hich the/ are constructed# 2his is not a ne( ronouncement# 7n extensive ela.oration of this rule (as discussed ./ this Court in the case of aquiran, et al# v# aquiran, et# al#, 5& :#+# # $$&0, the relevant ortion of (hich said8 AppellantGs house falls within the scope of the term Guseful e"pensesG. $ince he built it in good faith, he has the right of retention pending reimbursement. &his right e"tends to the land itself, because the right to retain the improvements while the indemnity is not paid implies the tenancy or possession in fact of the land on which they are built. 6t was so held by this 4ourt in the case of &ufe"is, et al. v. 4hunaco, ? *. 8. o. 11@, p. ;@5@, wherein the following comment of I. ucius $caevola is citedJ Article ?1 of the 4ode offers us also another case of the right of retention. 6t does not e"pressly appear in the statute boo!s, but the basis of its application is deduced in an irrefutable way. &he article referred to grants the owner of the land on which building, sowing, or planting has been done in good faith the right to appropriate as his own the thing so built, sown, or planted, upon paying the indemnity provided for in Articles @5 and @5@. &he builder, the planter, and the sower have the natural possession of the land on which they built, planted, or sowed, because had they lac!ed this tenancy or possession in fact, the building, planting, or sowing would not have been possible.... &he right of a builder in good faith to retain both the improvements and the land on which they have been made until the necessary and useful e"penses have been paid has been recogni #e 8u
F$-s: 7 contract of lease (ith otion to .u/ (as entered ./ Encarnacion artolome and etitioner# 2he etitioner (as )iven the otion to lease or lease (ith urchase the su.6ect land, (hich otion must .e exercised (ithin a eriod of t(o /ears counted from the si)nin) of the Contract# Petitioner aid a consideration for reservation of its otion# Petitioner re)ularl/ aid the monthl/ P&,000#00 rovided for ./ the Contract to Encarnacion until her death in Aanuar/ $330# 2hereafter, etitioner coursed its a/ment to rivate resondent Victor artolome, .ein) the sole heir of Encarnacion# Victor, ho(ever, refused to accet these a/ments# Victor executed an 7ffidavit of elf-7d6udication over all the roerties of Encarnacion, includin) the su.6ect lot# 2he title of the roert/ (as issued in the name of Victor# Petitioner oened a savin)s account in the name of Victor and deosited the rental fee as (ell as reservation fees desite refusal of Victor# Petitioner then filed a comlaint for secific erformance and dama)es a)ainst Victor for not surrenderin) and deliverin) the su.6ect roert/ to him in accordance (ith the terms in contract of lease# R2C dismissed the comlaint# :n aeal, the C7 affirmed the lo(er courtHs decision# Iss28 9hether or not the Contract of !ease (ith :tion to u/ entered into ./ the late Encarnacion artolome (ith etitioner (as terminated uon her death or (hether it .inds her sole heir, Victor, even after her demise# H&: 2he court sited 7rticle $&$$ of the Civil Code rovides, as follo(s, "7rt# $&$$# Contracts ta
() G.R. No. L'354
!$0+ 31 193
CHARTERED
:n ovem.er %;, $3%3, the Panan.utan !um.er S Plantation Coman/ sold and delivered to the Chartered an< of India, 7ustralia S China a considera.le quantit/ of lum.er#
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:n Decem.er $$, $3%3, (hen the .an< attemted to exort aroximatel/ %50,00 .oard feet of the lum.er urchase ./ it from the Panan.utan !um.er S Plantation Coman/, the .an< (as revented from doin) so ./ the emlo/ees of the lum.er coman/#
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2he .an< (as then comelled to commence an action in the C4I of Tam.oan)a, as
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It should further .e exlained that durin) the same eriod of time, the emlo/ees of the Panan.utan !um.er S Plantation Coman/ instituted an action in the C4I of Tam.oan)a a)ainst their emlo/er, the Panan.utan !um.er S Plantation Coman/, to recover from it their unaid salaries and (a)es a))re)atin) thirt/ off thousand esos# 2he Panan.utan !um.er S Plantation Coman/ (as later declared in default and 6ud)ment (as rendered a)ainst it for the amount claimed ./ the said emlo/ees# 2he delora.le situation of these emlo/ees (ill thus .e understood, for the/
hold a 6ud)ment a)ainst their emlo/er undou.tedl/ of no monetar/ value, (hile the lum.er formerl/ o(ned ./ their emlo/er has .een transferred to the Chartered an< of India, 7ustralia S China# •
Counsel for the defendants su.mits t(o roositions, .ased resectivel/ on articles $;00 and $3%%, ara)rah $, of the Civil Code# 2he first cited codal article rovides that8 "7n/ erson (ho has done (or< on ersonal roert/ is entitled to retain the same as a led)e until he is aid#" 'ere it is conceded that the emlo/ees of the Panan.utan !um.er S Plantation Coman/ have done (or< on lum.er, and that the/ have not .een aid for their (or<# :n the other hand, it is equall/ certain that the defendants (ere salaried emlo/ees and not artisans aid for secific (or< done on ersonal roert/# 2he defendants (ere aid for actual service rendered indeendent of the qualit/ or quantit/ of the finished roduct of their la.or#
ISSUE8 9: 7rt# $;00 is alica.le# RULING8
7rticle $;00 of the Civil Code is not alica.le, for the reason that salaried emlo/ees do not come (ithin its urvie(# Counsel for the aellants in his latest memorandum aears in a (a/ to concede the correctness of this vie(, .ut attemts to dra( a distinction .et(een the ri)ht of a servant to retain the roert/ of his master no matter of (hat class, and the ri)ht of the servant to retain the roert/ of his master on (hich the servant has directl/ la.ored# ut the distinction is more fancied than real, and the .asic rincile of the civil la( must .e enforced# either do (e thin< that article $3%%, ara)rah $, can rove of an/ avail to them# 2his ara)rah rovides8 7R2# $3%%# 9ith resect to determinate ersonal roert/ of the de.tors, the follo(in) are referred8 "$# Credits for the construction, reair, reservation, or urchase rice of ersonal roert/ in the ossession of the de.tor, to the extent of the value of the same#" ut in the case .efore us the fact is that the credits of the emlo/ees do not fall (ithin an/ of the clauses of the article# 2he .lan< is a bona fide urchaser (hich ta, 3 Phil#, 5>K 1e/ers vs. 2hein B$3$0, $5 Phil#, &0&# efore closin), it must .e emhasi=ed in a more direct manner that the defendants have attemted to hinder the culmination of a commercial transaction ./ ta
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