Case digest Sales Notes 8 PDF

Preview

Summary

SALES (Cases)1. Catungal vs. Rodriguez, GR 146839, March 23, 2011Facts: Agapita Catungal owned a parcel of land with an area of 65, 246 square meters in Talamban, Cebu City. She entered into a Contract to Sell with Angel Rodriguez. Subsequently, the Contract to Sell was upgraded into a Conditional D...

Description

SALES (Cases) 1.

Catungal vs. Rodriguez, GR 146839, March 23, 2011

Facts: Agapita Catungal owned a parcel of land with an area of 65, 246 square meters in Talamban, Cebu City. She entered into a Contract to Sell with Angel Rodriguez. Subsequently, the Contract to Sell was upgraded into a Conditional Deed of Sale between the same parties. Rodriguez secured the necessary survey and plans that reclassified the land from agricultural to residential and actively negotiated for the road right of way. The spouses Catungal requested an advance of P5,000,000.00 on the purchase price. Rodriguez objected on the unwarranted demands in view of the terms of the Conditional Deed of Sale that allowed him sufficient time to negotiate a road right of way and exclusive right to rescind the contract. Thereafter, he received a letter from Atty. Catungal that the contract is cancelled and terminated. Catungal filed a complaint contending that the Catungal’s unilateral rescission of the Conditional Deed of Sale was unjustified, arbitrary and unwarranted. However, the Catungals claims that Rodriguez does not have an exclusive right to rescind the contract it being recorocal. The trial court ruled in favor of Rodriguez. The Catungals appealed the decision to the Court of Appeals. In a Motion for Reconsideration, Atty. Borromeo, a new counsel for the Catungals, argued for the first time that the paragraphs 1(b) and 5(49) of the Conditional Deed of Sale violated the principle of mutuality under Article 1308 of the Civil Code. ISSUE 1. Whether petitioners allowed to raise their theory of nullity of the Conditional Deed of Sale for the first time on appeal? 2. Whether paragraphs 1(b) and 5 of the Conditional Deed of Sale violate the principle of mutuality of contracts under Article 1308? HELD 1. No. The Court held that a situation where a party completely changes his theory of the case on appeal and abandons his previous assignment of errors in his brief, which plainly should not be allowed as anathema to due process. During the proceedings before the trial court, the spouses Catungal never claimed that the provisions in the Conditional Deed of Sale, stipulating that the payment of the balance of the purchase price was contingent upon the successful negotiation of a road right of way and granting Rodriguez the option to rescind, were void for allegedly making

the contract

fulfillment dependent solely

on

of the

will

the of

Rodriguez.

2. No. The Court held that in the Conditional Deed of Sale the respondent shall pay the balance of the purchase price when he has successfully negotiated and secured a road right of way, is not purely potestative as what the petitioners contend. It is not dependent on the sole will of the debtor but also on the will of third persons who own the adjacent land and from whom the road right of way shall be negotiated. This mixed condition is expressly allowed under Article 1182 of the Civil Code. In other words, the obligation to pay the balance is conditioned upon the acquisition of the road right-of-way, in accordance with paragraph 2 of Article 1181 of the New Civil Code. In the event that the condition is not fulfilled, Rodriguez can either proceed with the sale or demand return of his down payment or to waive the condition and still pay the purchase price despite the lack of road access.

2.Briones vs. Macabagdal, GR 150666, August 3, 2010, 626 SCRA 300 Facts: Respondent-spouses purchased from Vergon Realty Investments Corporation (Vergon) Lot No. 2-R, a 325-square-meter land located in Vergonville Subdivision No. 10 at Las Piñas City, Metro Manila and covered by Transfer Certificate of Title No. 62181 of the Registry of Deeds of Pasay City. On the other hand, petitioners are the owners of Lot No. 2-S, which is adjacent to Lot No. 2-R. Sometime in 1984, after obtaining the necessary building permit and the approval of Vergon, petitioners constructed a house on Lot No. 2-R which they thought was Lot No. 2-S. After being informed of the mix up by Vergon’s manager, respondent-spouses immediately demanded petitioners to demolish the house and vacate the property. Petitioners, however, refused to heed their demand. Thus, respondent-spouses filed an action to recover ownership and possession of the said parcel of land with the RTC of Makati City. Petitioners insisted that the lot on which they constructed their house was the lot which was consistently pointed to them as theirs by Vergon’s agents over the seven (7)-year period they were paying for the lot. They interposed the defense of being buyers in good faith and impleaded Vergon as third-party defendant claiming that because of the warranty against

eviction, they were entitled to indemnity from Vergon in case the suit is decided against them Defendants’ counterclaim against plaintiffs is dismissed for lack of merit and with no cause of action. Defendants’ third-party complaint against thirdparty defendant Vergonville Realty and Investments Corporation is likewise ordered dismissed for lack of cause of action and evidently without merit. Issue: Whether Sps.Briones must bear the damage alone Held: No. Article 527 presumes good faith since no proof exists to show that the mistake was done by petitioners in bad faith, the latter should be presumed to have built the house in good faith. The builder in goodfaith can compel the landowner to make choice between sppropristing the building by paying the proper indemnity or obliging the builder to pay the price of the land. The choice belongs to the owner of the land, a rule that accords of the principal of accession. In this case, Macabagdal has the option to appropriate the house on the subject land after the payment of petitioner of the appropriate indemnity or to oblige petitioner to buy the land, unless its value is considerably more than the value of the structure, in which case petitioner shall pay reasonable rent.

3.Goodyear Philippines, Inc. vs. Sy, GR 154554, November 9, 2005, 474 SCRA 427 Facts: Goodyear Philippines was the owner of an Isuzu car which was hijacked in 1986. Goodyear reported it to the police. PNP issued an alert alarm on the stolen vehicle. Later that year the car was recovered. Goodyear told PNP to lift the alarm from the recovered car. In 1996, Goodyear sold the car to Sy. In 1997, Sy sold the car to Jose Lee. Lee tried to register the car in his name but he was not able to do so because apparently PNP did not lift the alert alarm over the said car. The car was impounded and PNP sued Lee. Lee told Sy about it. Sy then sue Goodyear for breach of warranty. Sy argued that Goodyear has the duty to convey the vehicle to Sy free from all liens, encumbrances and legal impediments.

Issue: Whether or not there was a breach of warranty.

Held: No. In a contract of sale, there are implied warranties: first, the vendor has a right to sell the thing at the time that its ownership is to pass to the vendee, as a result of which the latter shall from then on have and enjoy the legal and peaceful possession of the thing; and, second, the thing shall be free from any charge or encumbrance not declared or known to the vendee. Goodyear did not break any of those. Certainly, the impoundment of the car was not Goodyear’s fault and it was not a legal impediment that deprived Sy from ownership of said car. When Sy sold the car to Lee, Sy was already the absolute owner. This is because when Goodyear sold the car to Sy, Goodyear transferred full ownership to Sy. It was just unfortunate that the PNP did not lift the alert alarm from the said car placed on it in 1986. Certainly, Goodyear has no control over the PNP and PNP’s inaction is a purely administrative and government in nature. Hence, Goodyear did not breach its obligation as a vendor to Sy; neither did it violate Sy’s right for which he could maintain an action for the recovery of damages. Without this crucial allegation of a breach or violation, no cause of action exists. 4. Uy vs. Ariza, GR 158370, August 17, 2006 Facts: Spouses Uy bought 2 parcels of land they have chosen from respondents and occupied the same. However, it appeared that the parcels of land petitioners chosen and occupied were already titled in the names of the Delgados which were purportedly sold by the respondents to the Delgados. Petitioners were sued for unlawful detainer by the Delgados. Petitioners compromised the case without giving notice to the respondents. Thereafter, petitioners demand from respondents that they be allowed to choose again but respondents refused. Petitioners then filed a case for specific performance anchoring on the claim that they could not exercise their right to choose the portion bought because the same were already sold to another. Respondents faulted petitioners for losing possession of the parcels of land by entering into a compromise agreement with the Delgados on two grounds: first, because respondents have allegedly initiated the necessary legal steps to defend their possessory rights to the disputed land by filing a case for the declaration of nullity of the title of the Delgados, and second, because petitioners failed to interpose a third-party complaint to implead respondents in the unlawful detainer case.

Issue: Whether or not petitioners have a valid cause of action Held: No. At the outset, it could already be seen that indeed, petitioners have no cause of action against respondents. The case for specific performance which was filed by petitioners against respondents is not the proper remedy in this case. Rather, said action was purely an afterthought on the part of petitioners when they were eventually evicted from the lots they bought from respondents. The facts of the case are very clear. Petitioners bought from respondents a 200 square meter lot which was part of a bigger parcel of land covered by TCT No. 20007 registered in the names of respondents, and which petitioners immediately took possession of. After a year, petitioners again bought from respondents and took possession of the adjacent lot also measuring 200 square meters. Since the sale, petitioners had been in peaceful possession of the lots until they were evicted from the same by third persons claiming to be the owners of the said lots. Thus, if petitioners have a cause of action against respondents, it would be one for the enforcement of warranty against eviction and not one for specific performance. What is before us is a clear case of eviction. Thus, the action for specific performance filed by petitioners against respondents must necessarily fail. If at all, petitioners may file an action for the enforcement of warranty in case of eviction which every vendor of a parcel of land is enjoined by law to guarantee as provided under Article 1548 of the New Civil Code: Art. 1548. Eviction shall take place whenever by a final judgment based on a right prior to the sale or an act imputable to the vendor, the vendee is deprived of the whole or part of the thing purchased. The vendor shall answer for the eviction even though nothing has been said in the contract on the subject. The contracting parties, however, may increase, diminish or suppress this legal obligation of the vendor. But even if petitioners would file an action for the enforcement of warranty in case of eviction against respondents, We are afraid that the same will not prosper. The records of the case reveal that the unlawful detainer case filed by third persons against petitioners, which led to the ouster of the latter from the subject lots, was decided by compromise agreement without impleading respondents as third-party defendants. It should be stressed that in order for the case to prosper, it is a precondition that the seller must have been summoned in the suit for the eviction of the buyer. This rule is provided under the provisions of Articles 1558 and 1559 of the New Civil Code.

Art. 1559. The defendant vendee shall ask, within the time fixed in the Rules of Court for answering the complaint, that the vendor be made a codefendant. Applying the above-quoted provisions of law, the Supreme Court enumerated the requisites in the enforcement of a vendors liability for eviction, in the case of Maria Luisa De Leon Escaler and Ernesto Escaler v. Court of Appeals, et al., (G.R. No. L-42636. August 1, 1985.), to wit: In order that a vendors liability for eviction may be enforced, the following requisites must concur a) there must be a final judgment; b) the purchaser has been deprived of the whole or part of the thing sold; c) said deprivation was by virtue of a right prior to the sale made by the vendor; and d) the vendor has been summoned and made co-defendant in the suit for eviction at the instance of the vendee. In the case at bar, the fourth requisite that of being summoned in the suit for eviction (Case No. 4252) at the instance of the vendee is not present.

5. Cabling vs. Lumapas, GR 196950, June 18, 2014 Facts: Cabling was the highest bidder in an extrajudicial foreclosure sale over a 216sqm property situated in the Barrio of Sta. Rita, Olongapo. The final deed was issued by the Sheriff of Olongapo and the title was transferred to Cabling. Cabling filed an Application for the issuance of a Writ of Possession with the RTC. The petition was granted and a notice to vacate was issued to Lumapas. Lumapas filed a Motion for Leave of Court for Intervention as Party Defendant and an Answer for Intervention as a third party in actual possession of the foreclosed property. Lumapas claimed that the property was sold to her by Aida Ibabao, the property’s registered owner and the judgement debtor/mortgagor in the extrajudicial foreclosure sale, pursuant to a Deed of Conditional Sale. The RTC issued an order holding in abeyance the implementation of Cabling’s writ of possession until after the resolution of Lumapas’ motion. Lumapas filed a motion for reconsideration. The RTC granted Lumapas’ motion for reconsideration. The court recalled and rendered ineffective the writ of possession issued to Cabling. The RTC ruled that Lumapas cannot be ousted of her possession by a mere ex-parte motion for the issuance of a possessory writ, and that the petitioner

must now resort to appropriate judicial process in order to recover the foreclosed property. Cabling moved to reconsider the Order, but was denied. ISSUE: 1. Whether such possession is not adverse to that of the judgement debtor/mortgagor. 2. Whether ownership is retained by the seller until the fulfillment of a positive suspensive condition Held: The Court ruled that in the extrajudicial foreclosure of real estate mortgages under Act No. 3135, the issuance of a writ of possession is ministerial upon the court after the foreclosure sale and during the redemption period when the court may issue the order for a writ of possession upon mere filing of an ex parte motion and the approval of the corresponding bond. In this case, Lumapas cannot be said to possess the subject property by adverse title or right as her possession is merely premised on the alleged conditional sale of the property to her by the judgment debtor/mortgagor. The execution of contract of conditional sale does not immediately transfer title to the property to be sold from seller to buyer. In such contract, ownership or title to the property is retained by the seller until the fulfillment of a positive condition which is normally the payment of the purchase price in the manner agreed upon. In this case, the Deed of Conditional Sale between Lumapas and Ibabao expressly reserved to the latter ownership over the subject property until full payment of the purchase price, despite the delivery of the subject property to Lumapas. Therefore, the possession of Lumapas from the rime the subject property was delivered to her by Ibabao cannot be claimed as possession in concept of an owner, as the ownership and title to the subject property still then remained with Ibabao until the title to the property was transferred to Cabling. In order for Lumapas not to be ousted, her possession of the property must be adverse. She must prove a right independent of and even superior to that of the judgment debtor/mortgagor.

6. Bignay Ex-Im Philippines, Inc. vs. Union Bank of the Philippines, GR 171591, Feb 12, 2014, 176 SCRA 21

Facts: Rosario filed against Alfonso and Union Bank for annulment of a mortgage, claiming that Alfonso mortgaged the subject property without her consent, and for reconveyance. In a Letter-Proposal, Bignay Ex-Im Philippines, Inc. (Bignay) offered to purchase the subject property. A Deed of Absolute Sale was executed by and between Union Bank and Bignay whereby the property was conveyed to Bignay for P4 million. One of the terms of the deed of sale is quoted below: o Section 1. The VENDEE hereby recognizes that the Parcel/s of Land with improvements thereon is acquired through foreclosure proceedings and agrees to buy the Parcel/s of Land with improvements thereon in its present state and condition. The VENDOR therefore does not make any x x x representations or warranty with respect to the Parcel/s of Land but that it will defend its title to the Parcel/s of Land with improvements thereon against the claims of any person whomsoever. A Decision was rendered in Civil Case No. Q-52702 in favor of Alfonso and Union Bank appealed the above Decision with the CA. It likewise sought a new trial of the case, which the trial court denied. Bignay was eventually evicted from the property by virtue of the aforementioned decision. ISSUE: Whether or not Union Bank has the obligation to return the value of the property to Bignay Held: Yes Art. 1555. When the warranty has been agreed upon or nothing has been stipulated on this point, in case eviction occurs, the vendee shall have the right to demand of the vendor: (1) The return of the value which the thing sold had at the time of the eviction, be it greater or less than the price of the sale 

The Court held that the gross negligence of the seller in defending its title to the property subject matter of the sale – thereby contravening the express undertaking under the deed of sale to protect its title against the claims of third persons resulting in the buyer’s eviction from the property, amounts to bad faith, and the buyer is entitled to the remedies afforded under Article 1555 of the Civil Code.



The record reveals that Union Bank was grossly negligent in the handling and prosecution of Civil Case No. Q-52702. Its appeal of the

Decision in said case was dismissed by the CA for failure to file the required appellant’s brief. 

Next, the ensuing Petition for Review on Certiorari filed with this Court was likewise denied due to late filing and payment of legal fees.



Finally, the bank sought the annulment of the judgment, yet again, the CA dismissed the petition for its failure to comply with Supreme Court Circular No. 28-91.



As a result, the Decision became final and executory, and Bignay was evicted from the property. Such negligence in the handling of the case is far from coincidental; it is decidedly glaring, and amounts to bad faith.

7. C. McCullough vs R. Aenlle & Co, G.R. No. 1300 ,February 3, 1904 Facts: A written contract was made for the purpose of carrying into effect the said contract of sale entered entered by Francisco Gonzalez and Don Antonio la Puente, in the name and on behalf of the mercantile partnership (R. Aenlle & Co.), declare that they sell, absolutely and in fee simple, to E.C. McCullough, the tobacco and cigarette factory known as ’La Maria Cristina,’ including the trade-mark ’La Maria Cristina,’ which has been duly registered, three stock of tobacco in leaf and manufactured, machinery, labels, wrappers, furniture, fixtures, and everything else belonging to the said factory. The inventory mentioned in the contract was afterwards made by the defendant and delivered to the plaintiff through an expert selected by him, examined bales of the tobacco selected by the defendant and which its agents said were sample bales of the different l...