ATILANO v. ATILANO

FACTS: In 1916 Eulogio Atilano I acquired, by purchase from one Gerardo Vinallanueva, Lot No. 535 of the then municipality of Zamboanga cadastre. The vendee thereafter obtained transfer of certificate of title in his name. In 1920 he had the land subdivided into five parts, identified as A,B, C, D and E. On 18 May, after the subdivision, Eulogio Atilano I, for the sum of P150.00, executed a deed of sale covering lot E in favor of his brother Eulogio Atilano II, who thereupon obtained a certificate of title. Three other portions, name Lot B, C, and D, were likewise sold to other persons, the original owner, Eulogio Atilano I, retaining for himself only the remaining Lot A. Upon his death, the title to this lot passed to Ladislao Atilano, defendant in this case, in whose name the corresponding certificate was issued.

On 6 December 1952, Atilano II having become the widower upon the death of his wife, he and his children obtained transfer certificate of title over the Lot E in their names as co-owners. Then, on 16 July 1959, desiring to put an end to the co-ownership, they had the land resurveyed so that it could properly be subdivided; and it was then discovered that the land they were actually occupying on the strength of the deed of sale executed in 1920 was Lot A and not Lot E, while the land remained in the possession of the vendor, Atilano I, and which passed to his successor, defendant Ladislao Atilano was lot E and not Lot A. Thus, the heirs of Eulogio II offered to exchange the properties. However, the heirs of Eulogio I refused because Lot E was bigger than Lot A.

RTC – rendered judgment for the plaintiffs on the sole ground that since the property was registered under the Land Registration Act the defendant could not acquire it through prescription.

ISSUE: W/N an exchange of the properties was proper

HELD: No. The real issue here is not adverse possession, but the real intention of the parties to that sale. From all the facts and circumstances we are convinced that the object thereof, as intended and understood by the parties, was that specific portion where the vendee was then already residing, where he reconstructed his house at the end of the war, and where his heirs, the plaintiff herein, continued to reside thereafter: namely Lot A and that its designation as Lot E in the deed of sale was a simple mistake in the drafting of the document. The mistake did not vitiate the consent of the parties, or affect the validity and binding effect of the contract between them. The new Civil Code provides a remedy for such a situation by means of reformation of the instrument. This remedy is available when, there having been meeting of the minds of the parties to a contract, their true intention is not expressed in the instrument purporting to embody the agreement by reason of mistake, fraud, inequitable conduct or accident. (Art. 1359). In this case, the deed of sale executed in 1920 need no longer be reformed. The parties

have retained possession of their respective properties conformably to the real intention of the parties to that sale, and all they should do is to execute mutual deeds of conveyance.

WHEREFORE, the judgment appealed from is reversed. The plaintiffs are ordered to execute a deed of conveyance of Lot E in favor of the defendants, and the latter in turn, are ordered to execute a similar document, covering Lot A, in favor of the plaintiffs.

YU TEK & Co. v. GONZALES

FACTS: Gonzales received P3,000 from Yu Tek and obligated himself in favor of the latter to deliver 600piculs of sugar of the 1st and 2nd grade within 3 months. He failed to deliver the sugar and refused to return the money—thus Yu Tek sued him. Gonzales, in seeking to evade liability, invokes fortuitous event, alleging the total failure of his crop.

ISSUE: W/N there was perfected contract of sale

HELD: NO. The subject matter was not yet determinate. The sugar agreed upon has yet to be segregated from all other articles. That being the case, there was merely an executory agreement—a promise of sale, and not a contract of sale itself. Moreover, there was no stipulation that the sugar was to be derived from his crop; he was at liberty to get it from whatever source he could find. The obligation he incurred was for the delivery of the generic thing. Thus, he cannot invoke force majeure under the maxim genus never perishes. His obligation to deliver the sugar is not extinguished. Yu Tek is thus entitled to rescind the contract and recover the money in addition to the stipulated P1,200as indemnity for losses.

DD: This rule no longer holds true. Generic things may now be the subject matter of a contract of sale provided that they have the quality of being DETERMINABLE at the perfection of the contract.

YTURALDE v. CA

FACTS: It appears that the spouses Francisco Yturralde and Margarita de los Reyes, owned a parcel of agricultural land in Zamboanga del Sur, containing an area of 14.1079 hectares, more or less and registered in their names under Original Certificate of Title. Sometime in year 1944, Yturralde died inestate, survived by his wife and their children. In 1950, Margarita de los Reyes contracted a second marriage with her brother-in-law and uncle of the petitioners.

On 30 May 1952, Damaso Yturralde and Margarita executed a deed of sale with right of repurchase in favor of the respondent Isabelo Rebolios covering the property of the sum P1,715. The vendorsa reiro failed to exercise the right to repurchase the property within 3 year period agreen upon. Thereafter, in 1961, Margarita de los Reyes died.

On 3 May 1965, respondent Rebolios filed a petition for consolidation of ownership with the Court of First Instance of Zamboanga del Sur, naming as respondents in the case the petitioners Yturralde. Summons was then issued, and received by the respondent heirs. However, summons could not be served on three of the respondents as they were no longer residing at their last known addresses. Summon are served but was returned without service. The Court issued an order declaring all the respondents therein in default. Rendered a decision consolidating the ownership of the subject property in favor of Rebollos, and ordering the Register of Deeds to cancel Original Cert. of Title covering the said property and to issue a transfer cert. of title in the name of Rebollos. Rebollos filed a petition for the demolition of all buildings not belonging to said Rebollos

CA – held the decision of the RTC Judge will not prosper because prohibition is a preventive remedy to restrain exercise of a power or the performance of an act and not a remedy against acts already accomplished, which cannot be undone through a writ of prohibition

GAITE v. FONACIER (1961)Facts: Fonacier owned 11 iron lode mineral claims, known as the Dawahan Group, located in Camarines Norte. He appointed Gaite as his attorney-in-fact to enter into contracts with individual or juridical persons for the exploration and development of the mining claims. Gaite in turn executed a general assignment conveying the development of the mining claims into the Larap Iron Mines, a single proprietorship owned by him. Then he started the development of those mining claims.

 Fonacier decided to revoke the authority granted by him to Gaite, and Gaite assented, subject to certain conditions. They entered into a contract, where Gaite transferred to Fonacier, for P20k, all his rights and interests on the roads and facilities in the claims, plusthe right to use the business name “Larap Iron Mines.” Gaite also transferred to Fonacier, for P75k, all this rights and interests over the tons of iron ore that he already extracted from the mineral claims. P10k of this was paid upon signing and the contract stated that “the balance of P65k will be paid from and out of the first letter of credit covering the first shipment of iron ores and of the first account derived from the local sale of iron ore made by Larap.”To seucre the payment, Fonacier delivered to Gaite a suretybond. Gaite wanted another bond, so Fonacier executed a second one, but it provided that the liability of the surety company would attach only when there had been an actual saleof iron ore for an amount of no less than P65k, and that the liability of said surety company would automatically expire on Dec 1955. 

Up to Dec 1955, when the bond expired with respect to the surety company, no sale of the tons of iron ore had been made by Larap, nor had the P65k balance of the price of said ore been paid to Gaite by Fonacier and his sureties, the second bond

automatically expired. And when Fonacier and his sureties failed to pay, Gaite filed the present complaint against them for the payment of the P65k balance.

○The defendants set up the defense that the obligation sued upon by Gaite was subject to a condition that the amount of P65k would be payable out of thefirst letter of credit covering the first shipment of iron ore and/or the first amountderived from the local sale of the iron ore by Larap, and that up to the time of thefiling of the complaint no sale of the iron ore had been made. Therefore, theobligation was not due and demandable yet.○The lower court held in favor of Gaite, and the defendants were ordered to pay theP65k. The lower court held that the oblig of the defendants to pay Gaitewas one with a term: that it would be paid upon the sale of sufficient iron ore, such sale to be effected on or before Dec 1955, and that as the latter failed to put up a good and sufficient security after the bond expired, the oblig became due and demandable.

Issue: Is the obligation of Fonacier to pay Gaite the P65k an obligation with a period or term and not one with a suspensive condition?

Held: Obligation was subject to a suspensive period or term. Lower court decision affirmed. –  A contract of sale is normally commutative and onerous. Not only does each of the parties assume a correlative obligation (the seller to deliver and transfer ownership of the thing sold and the buyer to pay the price), but each party anticipates performance by the other from the very start. While in a sale the obligation of one party can be lawfully subordinated to an uncertain event, so that the other understands that he assumes the risk of receiving nothing for what he gives, it isn’t in the usual course of business to do so. Hence, the contingent character of the obligation must clearly appear. Nothing is found in the record to evidence that Gaite desired or assumed to run the risk of losing his right over the ore without getting paid for it, or that Fonacier understood that Gaite assumed any such risk. This is proven by the fact that Gaite insisted on a bond to guarantee payment of the P65k. – Plus, to subordinate the oblig to pay the remaining P65k as condition precedent would be tantamount to leaving the payment at the discretion of the debtor, for the sale or shipment could not be made unless steps were taken to sell the ore. – Fonacier has forefeited the right to compel Gaite to wait for the sale of the ore before receiving payment of the balance of P65k, because of their failure to renew the bond or else replace it with an equivalent guarantee.

ATKINS KROLL & CO. v. DOMINGO

FACTS:

ISSUE:

HELD:

LAROZA v. GUIA

FACTS: Appellants, in their complaint, alleged that they brought the property in good faith and for valuable considerations from Francisco Guia and that they were in continuous possession of the said property from the time they acquired the same from Guia.

Appellee, through counsel, filed a motion to dismiss alleging, among others, “that the land subject matter of the complaint has already been the subject of a final and executor judgment, hence, plaintiffs(appellants) have no cause of action, or if there be any, the same is barred by a prior judgment.

RTC – issued an order dismissing appellant’s complaint. The motion to dismiss is well taken. It is beyond debate or question that the land over which plaintiffs seek herein to quiet title has already been declared the property of defendant by the final and executor judgment. There is no room for doubt or for controversy that all the requisite of res judicata or bar by prior judgment are present here.

CA – forwarded the records to CA because “no factual issue is involved” and the issues raised in the instant case are purely legal questions”

ISSUE: Whether the instant case is barred by a previous judgment

HELD: Records show that long before appellants had acquired subject property, a notice of lis pendens (Civil Case No. SP 488) had already been registered with the Office of the Register of Deeds of San Pablo City affecting the property. Lis pendens is a notice of pending litigation; a warning to the whole world that one who buys the property so annotated does so at his own risk (Rehabilitation Finance Corporation vs. Morales, 101 Phil. 175). Notwithstanding, appellants bought the land from Francisco Guia, defendant in Civil Case No. SP 488. Having purchased the property with notice of lis pendens, appellants took the risk of losing it in case the decision in the said civil case, as what actually happened, is adverse to their predecessor-in-interest, Francisco Guia Time and again, We have decreed that the filing of a notice of lis pendens charges all strangers with a notice of the particular litigation referred to therein and, therefore, any right they may thereafter acquired on the property is subject to the eventuality of the suit. The doctrine of lis pendens is founded upon reason of public policy and necessity, the purpose of which is to keep the subject matter of the litigation within the power of the Court until the judgment or decree shall have been entered; otherwise, by successive alienation's pending the litigation, its judgment or decree shall be rendered abortive and impossible of execution. On this score alone, appellants case would necessarily fall.

In their first assigned error appellants argue that there is no res judicata because there is no Identity of causes of action since the case at bar is an action to quiet title, whereas, Civil Case No. SP-488 is one of filiation and partition. In National Bank vs. Barreto, 52 Phil. 818, We held that "a judgment for the plaintiff sweeps away every defense that should have been raised against the action, and this for the purpose of every subsequent suit, whether founded upon the same or a different cause." in Civil Case No. SP-488, appellee Donaldo Guia maintained that he is a co-owner of that parcel of land, including the land in question, which was later adjudicated to him as his share in the inheritance from the late Cayetana Garcia; whereas, Francisco Guia, appellants' predecessor-in interest, alleged that he is the sole owner of the property. Thus, both parties claim ownership over the same property appellee Donaldo Guia, by virtue of a final judgment rendered in Civil Case No. SP-488, and appellants Timoteo Laroza and Conchita Uri, by virtue of the sale executed by Francisco Guia, who lost in said civil case. In both cases, the question boils down to ownership of the land. Thus, there is Identity of causes of action.

Anent the second assigned error, records reveal that a hearing on appellee's motion to dismiss appellants' complaint was conducted on August 12, 1974. There is, therefore, no basis for appellants to say that a hearing was never held in the case.

Finally, appellants claim that the lower court erred in declaring that res judicata is indubitable and patent from the face of the complaint itself, without the appellee pleading the same as an affirmative defense. From a cursory reading of the pleadings, extant in the records of the case, We find that in his motion to dismiss, appellee had thoroughly discussed the issue of res judicata and, coupled by the fact that it was the same court which heard and decided Civil Case No. SP 488, the trial court can rightfully rule on said issue.

ACCORDINGLY, for lack of merit, the appeal is hereby DISMISSED.

ARSENAL v. IAC

FACTS:

ISSUE:

HELD:

BAGNAS v. CA

FACTS: Hilario died with no will and was survived only by collateral relatives. Bagnas (et al) were the nearest kin. Retonil (et al) were also relatives but to a farther extent. They claimed ownership over 10 lots from the estate of Hilario presenting notarized and registered Deeds of Sale (in Tagalog) where the consideration for the lands was P1 and services rendered, being rendered, and to be rendered. Bagnas argued that the sales

were fictitious, while Retonil claimed to have done many things for Hilario—such as nursing him on his deathbed.

ISSUE: W/N there was a valid contract of sale

HELD: NO. At the onset, if a contract has no consideration, it is not merely voidable, but VOID—and even collateral heirs may assail the contract. In this case, there was no consideration. Price must be in money or its equivalent; services are not the equivalent of money insofar as the requirement of price is concerned. A contract is not one for sale if the consideration consists of services. Not only are they vague, they are unknown and not susceptible of determination without a new agreement between the parties.

Vda. DE GORDON v. CA

FACTS: The uncontested averments in the petition and the annexed attached to said petition disclose that the two parcels of land in question were sold at public auction at the City Hall, QC on 3 December 1964 under the direction and supervision of the City Treasurer of QC after the proper procedures and legal formalities had been duly accomplished; that the taxes against the two parcels of land in question for the years 1953 to 1963, inclusive, remained unpaid; that the City Treasurer, upon warrant of a certified copy of the record of such delinquency, advertised for the sale of the 2 parcels of land to satisfy the taxes, penalties, and costs for a period of 30 days prior to the sale, by keeping a notice of sale posted at the main entrance on the City Hall and in a public and conspicuous place in the district where the same is located and by publication of said notice once a week for 3 weeks. The two parcels of land in question were sold to Duazo for the amount of P10,500 representing the tax, penalty and costs, that the certificate of sale executed by the City Treasurer was duly of QC, that upon the failure of the registered owner to redeem the 2 parcels of land within 1 year period prescribed by law, the City Treasurer executed on 4 January 1966 a final deed of sale and improvements thereon, and that the said final deed of sale was also registered in the Office of the Register of Deeds.

CA – the combined assessed value of the 2 parcels of land is P16,800. The price paid at the public sale is P10,500. The residential house on the land is assessed at P45,580. But the assessment was made in 1961. The present value of the residential house must be much less now considering the depreciation for over 10 years. While the price of P10,500 is less than the total assessed value of the land and the improvement thereon, said price cannot be considered so grossly inadequate as to be shocking to the conscience of the court. The public sale in the instant case is governed by Sec 40 of the Commonwealth Act No. 470 which gives the delinquent taxpayer a period of 1 year from the date of the sale within which to repurchase the property sold. In case the delinquent taxpayer doe not repurchase the property sold within the period of 1 year from the date of the sale, it becomes mandatory duty of the provincial treasurer to issue in favor of the purchaser a final deed of sale. We find that the oppositor is not entitled to repurchase the 2 parcels of land in question because she failed to do so within 1 year from the date of the sale.

WHEREFORE, the order appeals from is hereby reversed and the ownership of Duazo over the 2 parcels of land and the improvements thereon is declared consolidated. The Register of Deeds is ordered to cancel the TCT and to issue the corresponding transfer cert. of titles to Duazo over the 2 parcels of land.

ISSUE: Whether the price is so grossly inadequate as to justify the setting aside of the public sale

HELD: As the Court has held in Velasquez vs. Coronel, alleged gross inadequacy of price is not material “when the law gives the owner the right to redeem was when a sale is made at public auction, upon the theory that the lesser the price the easier it is for the owner to effect the redemption. As the Court further stressed in the recent case of Tajonera vs. CA, the law governing tax sales for delinquent taxes may be “harsh and drastic, but it is a necessary means of insuring the prompt collection of taxes so essential to the life of the Government.

ACCORDINGLY, the appellate court’s decision is hereby affirmed.

ONG v. ONG

FACTS: For an in consideration of P1 and other valuable considerations, Imelda Ong transferred through a Deed of Quitclaim her rights over a ½ portion of a parcel of land to Sandra. Later on, she revoked the Deed and donated the whole property to her son, Rex. Sanda, through her guardian, sought to recover ownership and possession thereof. Imelda alleged that the sale was void for lack of consideration.

ISSUE: W/N there was a valid contract of sale

HELD: YES. There was consideration. Its apparent inadequacy is of no moment since the usual practice in deeds of conveyance is to place a nominal amount although there is more valuable consideration given. Consideration is presumed to exist. He who alleges otherwise assumes the burden of proof. The one peso was not the consideration, but rather the other valuable considerations.

Although the cause is not stated in the contract it is presumed that it is existing unless the debtor proves the contrary (Art. 1354). One of the disputable presumptions is that there is sufficient cause of the contract. It is a legal presumption of sufficient cause or consideration supporting a contract even if such cause is not stated therein (Art. 1354). This presumption cannot be overcome by a simple assertion of lack of consideration especially when the contract itself states that consideration was given, and the same has been reduced into a public instrument with all due formalities and solemnities. To overcome the presumption of consideration the alleged lack of consideration must be shown by preponderance of evidence in proper action.

The execution of a deed purporting to convey ownership of a realty is in itself prima facie evidence of the existence of a valuable consideration, the party alleging the lack of consideration has the burden of proving such allegation.

Moreover, assuming that the said consideration of P1 is suspicious, this circumstance, alone, does not necessarily justify the inference that Reyes and the Abellas were not purchasers in good faith and for value. Neither does this inference warrant the conclusion that the sales were null and void ab intio. Indeed, bad faith and inadequacy of the monetary consideration do not render a conveyance inexsistent, for the assignor’s liberality may be sufficient cause for a valid contract (Art. 1350), whereas fraud or bad faith may render either rescissible or voidable, although valid until annulled, a contract concerning an object certain entered into with a cause and with the consent of the contracting parties, as in the case at bar.

LADANGA v. CA

FACTS: Clemencia Aseneta(78 y/o), a spinster, had a nephew named Bernardo and a niece named Salvacion. She legally adopted Bernardo in 1961. On April 6, 1974, Clemencia signed 9 deeds of sale in favor of Salvacion for various real properties, one being the Paco property which is the subject of this petition, and purportedly sold for P26,000. The total price involved in the 9 deeds of sale and in the tenth sale executed on 8 November 1974 was P92,200. In May 1975, Bernardo, as guardian of Clemencia, filed a case for reconveyance of the Paco property. Clemencia testified that she had not received a single centavo from Salvacion. The trial court, affirmed by the Court of Appeals, declared the sale void.

ISSUE: Whether the sale is valid

HELD: A contract of sale is void and produces no effect whatsoever where the price had never been paid by the purchaser to the vendor. It was now shown that Clemencia intended to donate Paco property to the Landangas. Her testimony and the notary’s testimony destroyed any presumption that he sale was fair and regular and for a true consideration.

WHEREFORE, the judgment of the Appellate Court is affirmed.

REPUBLIC v PHIL. RESOURCES DEV. CORP.

FACTS: The Republic brought an action against Apostol for the collection of sums owing to it for his purchase of Palawan Almaciga and other logs. His total debt amounted to some P34,000. PRDC intervened claiming that Apostol, as President of the company, without prior authority, took goods (steel sheets, pipes, bars, etc)from PRDC warehouse and appropriated them to settle his personal debts in favor of the government. The Republic opposed the intervention of PRDC, arguing thatprice is

always paid in money and that payment in kind is no payment at all; hence, money and not the goods of PRDC are under dispute.

ISSUE: W/N payment in kind is equivalent to price paid in money

HELD: YES. Price may be paid in money or ITS EQUIVALENT—in this case, the goods. Payment need not be in the form of money. The prices for the goods have, in fact, been assessed and determined. PRDC thus has a substantial interest in the case and must be permitted to intervene—its goods paid out without authority being under dispute in this case.

VELASCO v. CA

TOYOTA SHAW INC v CAFACTS: Luna Sosa wanted to buy a Toyota Lite Ace. He went to Toyota Shaw where he met Popong Bernardo, a sales rep. Sosa explained that he needed the Lite Ace by June 17, otherwise, he would become a laughing stock. Bernardo guaranteed that the vehicle would be delivered. They executed a document entitled Agreements between Sosa & Popong Bernardo of Toyota Shaw” where a P100K downpayment was stipulated and that the Lite Ace would be available at a given date. When the day of reckoning arrived, the Lite Ace was unavailable—the explanation of Bernardo being “nasulot ng ibang malakas.” However, according to Toyota, the true reason was that BA Finance, which was supposed to answer for the balance of the purchase price, did not approve Sosa’s application. Toyota also returned the downpayment. Thus, Sosa sued for damages amounting to P1.2M due to his humiliation, hurt feelings, sleepless nights, and so on.

ISSUE: W/N there was a perfected contract of sale

HELD: NO. Toyota Shaw should NOT be held liable for damages because there was no perfected contract of sale in the first place. There was no agreement as to the price and the manner of payment—which are both essential to the perfection of the sale. It was also clear that Bernardo signed the document in his personal capacity and it was up to Sosa to inquire as to the extent of the former’s capacity. Sosa did not even sign it. It was nothing but a mere proposal, which did not mature into a perfected contract of sale in lieu of the subsequent events. In fact, it made no specific reference to the sale of a vehicle. No obligations could thus arise therefrom. Sosa has no one else to blame but himself for his humiliation for bragging about something he does not own yet.