pals civil law (sales to damages)

8/10/2019 PALS Civil Law (Sales to Damages)

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D. CONTRACT TO SELL

PADILLA vs. SPOUSES PAREDES, G.R. NO. 124874, March 17, 2000

Under the parties contract, the property will be transferred to petitioner onlyupon the latter's "complete compliance of his obligation provided in thecontract" but because of petitioners failure to fully pay the purchase price, theobligation of private respondents to convey title to the property did not arise.

Petitioner's reliance on Article 1592 of the Civil Code is misplaced becausewhat this provision contemplates is an absolute sale and not a contract to sellas in the present case.

ART 1478

SPOUSES REYES vs. SALVADOR, SR., G.R. NO. 139047, September 11,2008

CRISTOBAL vs. SALVADOR, SR., G.R. NO. 139365, September 11, 2008

The Seller executed three separate contracts on the same property with threedifferent parties, wherein only the first two contracts contained a stipulationthat "if the Vendee fails to pay the Vendor the sums stated within the periodstipulated and after the grace period for each payment, this contract shallautomatically be null and void and of no effect without the necessity of anydemand, and the Vendor shall have the full and exclusive right to sell to any

person. The first two contracts were both mere contracts to sell and did nottransfer ownership to either of the buyers for failure to comply with thecondition of full payment of the purchase price, hence, vendor can still validlyconvey the subject property to another buyer.

E. ELEMENTS OF A VALID CONTRACT OF SALEPEALOSA vs. SANTOS, G.R. NO. 133749, August 23, 2001

Respondent insist that the second deed is a complete nullity because a) theconsideration stated in the deed was not paid; b)seller was not present when

the deed was notarized; c) seller did not surrender a copy of the title; d)realestate taxes were not paid. The elements of a valid contract of sale are: (1)consent or meeting of the minds; (2) determinate subject matter; and (3) pricecertain in money or its equivalent which are present in the second Deed of Salehence there is already a perfected contract of sale.


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Petitioners contend that they could repurchase the property that they "sold" toprivate respondents when they allowed the respondent to redeem the propertiesfor them from DBP but DBP certified that the mortgagors' right of redemptionwas not exercised within the period. Article 1505 of the Civil Code provides that

"where goods are sold by a person who is not the owner thereof, and who doesnot sell them under authority or with consent of the owner, the buyer acquiresno better title to the goods than the seller had, unless the owner of the goods isby his conduct precluded from denying the seller's authority to sell.", hence,petitioners "sold" nothing, it follows that they can also "repurchase" nothing.

B. BUYER

ART 1491DAROY vs. ATTY. ABECIA, A.C. NO. 3046, October 26, 1998

The prohibition in Art. 1491 does not apply to the sale of a parcel of land,acquired by a client to satisfy a judgment in his favor to his counsel as long asthe property was not the subject of the litigation.

ARCENIO vs. JUDGE PAGOROGON, A.M. NO. MTJ-89-270 July 5, 1993

OFFICE OF THE COURT ADMINISTRATOR vs. JUDGE PAGOROGON, A.M.NO. MTJ-92-637 July 5, 1993

The respondent judge engaged the services of a mechanic to tow the jeep incustodia legis and to place the jeep in good running condition, spending in the

process her own money and also registered the same in her brother's name.The act of respondent judge is not unlike the prohibited acquisition bypurchase described in Article 1491 of the New Civil code and is in fact, evenworse when she did not acquire the said vehicle from it's owner but insteadwhimsically spent for its repairs and automatically appropriated the jeep forher own use and benefit.

VALENCIA vs. ATTY. CABANTING, A.M. Nos. 1302, 1391 and 1543 April26, 1991

Paulino alleged that the trial court failed to provide a workable solution

concerning his house and while the petition for certiorari was pending the trialcourt issued an order of execution stating that "the decision in this case hasalready become final and executory". While it is true that Atty. Cabantingpurchased the lot after finality of judgment, there was still a pending certiorariproceeding, and a thing is said to be in litigation not only if there is somecontest or litigation over it in court, but also from the moment that it becomessubject to the judicial action of the judge.


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FABILLO vs. THE HONORABLE INTERMEDIATE APPELLATE COURT, G.R.NO. L-68838 March 11, 1991

After the court declared with finality that the petitioners are the lawful owners,

they refused to comply when the respondent lawyer proceeded to implementthe contract of services between him and the petitioners by taking possessionand exercising rights of ownership over 40% of said properties which are thesubject of litigation. A contract between a lawyer and his client stipulating acontingent fee is not covered by said prohibition under Article 1491 (5) of theCivil Code because the payment of said fee is not made during the pendency ofthe litigation but only after judgment has been rendered in the case handled bythe lawyer.

MANANQUIL vs. ATTY. VILLEGAS, A.M. NO. 2430 August 30, 1990

Complainant alleges that for over a period of 20 years, respondent counselallowed lease contracts to be executed between his client and a partnership ofwhich respondent is one of the partners, covering parcels of land of the estate,but respondent claims that he is only acting as an agent. Even if therespondent signed merely as an agent, the lease contracts are covered by theprohibition against any acquisition or lease by a lawyer of properties involvedin litigation in which he takes part.

BAUTISTA vs. ATTY. GONZALES, A.M. NO. 1625 February 12, 1990

The Solicitor General found that respondent counsel transferred to himselfone-half of the properties of his clients during the pendency of the case wherethe properties were involved. Persons mentioned in Art. 1491 of the Civil Codeare prohibited from purchasing the property mentioned therein because of theexisting fiduciary relationship with such property and rights, as well as withthe client.

ART 1492IN RE: SUSPENSION FROM THE PRACTICE OF LAW IN THE TERRITORYOF GUAM OF ATTY. LEON G. MAQUERA, B.M. NO. 793. July 30, 2004

Maquera was suspended from the practice of law in Guam for misconduct, ashe acquired his clients property by exercising the right of redemptionpreviously assigned to him by the client in payment of his legal services, thensold it and as a consequence obtained an unreasonably high fee for handlinghis clients case. The prohibition extends to sales in legal redemption and suchprohibition is founded on public policy because, by virtue of his office, an


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attorney may easily take advantage of the credulity and ignorance of his clientand unduly enrich himself at the expense of his client.

ART 1493PROVINCE OF CEBU vs. HEIRS OF RUFINA MORALES, G.R. NO. 170115,

FEBRUARY 19, 2008

The City of Cebu was no longer the owner of the lot when it ceded the same topetitioner under the compromise agreement and at that time, the city merelyretained rights as an unpaid seller but had effectively transferred ownership ofthe lot to Morales. A successor-in-interest could only acquire rights that itspredecessor had over the lo which include the right to seek rescission orfulfillment of the terms of the contract and the right to damages in either case.

III. SUBJECT MATTER

A. SALE OF AN EXPECTED THING

ART 1461HEIRS OF AMPARO DEL ROSARIO vs. SANTOS, G.R. NO. L-46892September 30, 1981

By the terms of the Deed of Sale itself, appellants declared themselves to beowners of one-half (1,2) interest thereof and contend that the deed ofassignment of one-half (1,2) interest thereof executed by said Custodio in theirfavor is strictly personal between them. Notwithstanding the lack of any title tothe said lot by appellants at the time of the execution of the deed of sale in

favor of appellee, the said sale may be valid as there can be a sale of anexpected thing.

B. SALE OF A MERE HOPE OR EXPECTANCY

JAVIER vs. COURT OF APPEALS, G.R. NO. L-48194 March 15, 1990

The efficacy of a deed of assignment is subject to the condition that theapplication of private respondent for an additional area for forest concession beapproved by the Bureau of Forestry which was not obtained. The efficacy ofthe sale of a mere hope or expectancy is deemed subject to the condition that

the thing will come into existence, which did not happen, hence the agreementexecuted never became effective or enforceable.

C. BOUNDARIES OF THE SUBJECT MATTER

DEL PRADO vs SPOUSES CABALLERO, G.R. NO. 148225, March 3,2010


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The parties agreed on the purchase price of P40,000.00 for a predeterminedarea of 4,000 sq m, more or less, but when the OCT was issued, the area wasdeclared to be 14,475 sq m, with an excess of 10,475 sq m. Petititiomer,however, claims that respondents are, therefore, duty-bound to deliver thewhole area within the boundaries stated, without any corresponding increase

in the price. Article 1542 is not hard and fast and admits of an exception andthe use of more or less or similar words in designating quantity covers only areasonable excess or deficiency, and clearly, the discrepancy of 10,475 sq mcannot be considered a slight difference in quantity.

SEMIRA vs. COURT OF APPEALS, G.R. NO. 76031 March 2, 1994

Private respondent sold Lot 4221 to his nephew by means of a "Kasulatan ngBilihan ng Lupa" which incorporated both the area and the definite boundariesof the lot, the former transferred not merely the 822.5 square meters stated intheir document of sale but the entire area circumscribed within its boundaries.

If besides mentioning the boundaries, which is indispensable in everyconveyance of real estate, its area or number should be designated in thecontract, the vendor shall be bound to deliver all that is included within saidboundaries, even when it exceeds the area or number specified in the contract;and, should he not be able to do so, he shall suffer a reduction in the price, inproportion to what is lacking in the area or number, unless the contract isrescinded because the vendee does not accede to the failure to deliver what hasbeen stipulated.

IV. OBLIGATIONS OF A SELLER TO TRANSFER OWNERSHIP

ART 1462DANGUILAN vs. IAC, G.R. NO. L-69970 November 28, 1988

Respondent admits that she did not take physical possession of property butargues that symbolic delivery was effected through the notarized deed of sale.The thing is considered to be delivered when it is placed "in the hands andpossession of the vendee," and in order that this symbolic delivery may producethe effect of tradition, it is necessary that the vendor shall have had suchcontrol over the thing sold at the moment of the sale, but if there is noimpediment to prevent the thing sold passing into the tenancy of the purchaserby the sole will of the vendor, symbolic delivery through the execution of a

public instrument is sufficient.

ART 1495CHUA vs COURT OF APPEALS, G.R. NO. 119255, April 9, 2003

Petitioner insists that he was ready to pay the balance of the purchase pricebut withheld payment because he required that the property be registered firstin his name before he would turn over the check to the private respondent.


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The obligation of the seller is to transfer to the buyer ownership of the thingsold, but in the sale of a real property, the seller is not obligated to transfer inthe name of the buyer a new certificate of title, but rather to transfer ownershipof the real property, because as between the seller and buyer, ownership istransferred not by the issuance of a new certificate of title in the name of the

buyer but by the execution of the instrument of sale in a public document.

ART 1496VISAYAN SAWMILL COMPANY, INC., vs. COURT OF APPEALS, G.R. NO.83851. March 3, 1993.

The seller gave access to the buyer to enter his premises, manifesting noobjection thereto but even sending people to start digging up the scrap iron.The seller has placed the goods in the control and possession of the vendee andsuch action or real delivery (traditio) transfered ownership.

ART 1497MUNICIPALITY OF VICTORIAS vs. THE COURT OF APPEALS, G.R. NO. L-31189 March 31, 1987

Respondent discovered that a parcel of land she owns is being used byPetitioner, Municipality of Victorias, as a cemetery for 29 years and when theMayor replied that Petitioner bought the land from her grandmother, she askedto be shown the papers concerning the sale but petitioner refused to show thesame. Where there is no express provision that title shall not pass until

payment of the price, and the thing sold has been delivered, title passes fromthe moment the thing sold is placed in the possession and control of the buyer.

DE LEON vs. ONG, G.R. NO. 170405, February 2, 2010

Petitioner sold three parcels of land to respondent which were mortgaged to abank, hence petitioner and respondent executed a notarized deed of absolutesale with assumption of mortgage, but petitioner some time thereafter paid themortgage and sold the properties to another person. Settled is the rule that theseller is obliged to transfer title over the properties and deliver the same to the

buyer, and as a rule, the execution of a notarized deed of sale is equivalent tothe delivery of a thing sold.

ART 1523PUROMINES, INC., vs. COURT OF APPEAL, G.R. NO. 91228. March 22,1993.


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Petitioner argues that the sales contract does not include the contract ofcarriage which is a different contract entered into by the carrier with the cargoowners.

As worded, the sales contract is comprehensive enough to include claims for

damages arising from carriage and delivery of the goods. As a general rule, theseller has the obligation to transmit the goods to the buyer, and concomitantthereto, the contracting of a carrier to deliver the same. Art. 1523 of the CivilCode provides:

"Art. 1523. Where in pursuance of a contract of sale, the seller in authorized orrequired to send the goods to the buyer, delivery of the goods to a carrier,whether named by the buyer or not, for the purpose of transmission to thebuyer is deemed to be a delivery of the goods to the buyer, except in the casesprovided for in article 1503, first, second and third paragraphs, or unless acontrary intent appear.

"Unless otherwise authorized by the buyer, the seller must take such contractwith the carrier on behalf of the buyer as may be reasonable, having regard tothe nature of the goods and the other circumstances of the case. If the selleromit so to do, and the goods are lost or damaged in course of transit, the buyermay decline to treat the delivery to the carrier as a delivery to himself,, or mayhold the seller responsible in damages."

xxx xxx xxx

The disputed sales contact provides for conditions relative to the delivery of

goods, such as date of shipment, demurrage, weight as determined by the billof lading at load port.

ART 1477BOY vs. COURT OF APPEALS, G.R. NO. 125088, April 14, 2004

Petitioner sold the subject property to respondents as evidenced by a notarizedDeed of Absolute Sale, but contends that the respondents have no right to

material possession of the property since the respondents have not paid theproperty in full. Unless there is a stipulation to the contrary, when the sale ismade through a public instrument, the execution thereof is equivalent to thedelivery of the thing which is the object of the contract.

V. PRICE

A. G.R.OSS INADEQUACY OF THE PRICE


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ART 1470SPOUSES BUENAVENTURA et al vs. COURT OF APPEALS, G.R. NO.126376. November 20, 2003

Petitioners assert that their respondent siblings did not actually pay the pricesstated in the Deeds of Sale to their respondent father and assuming that thereis consideration, the same is grossly inadequate as to invalidate the Deeds ofSale. If there is a meeting of the minds of the parties as to the price, thecontract of sale is valid and gross inadequacy of price does not affect a contractof sale, except if there is a defect in the consent, or that the parties reallyintended a donation or some other contract.

ART 1471HO, JR. vs TENG GUI, G.R. NO. 130115, July 16, 2008

RTC considered that although the sales of the properties on the lot weresimulated, it can be assumed that the intention of Ho in such transaction wasto give and donate such properties to the respondent. The Court holds that thereliance of the trial court on the provisions of Article 1471 of the Civil Code toconclude that the simulated sales were a valid donation to the respondent ismisplaced because its finding was based on a mere assumption when the lawrequires positive proof, which the respondent was unable to show.

B. FIXING OF THE PRICE

ART 1473HYATT ELEVATORS vs. CATHEDRAL HEIGHTS, G.R. NO. 173881December 1, 2010

As revealed by the records, it was only Hyatt who determined the price, withoutthe acceptance or conformity of CHBCAI. The fixing of the price can never beleft to the decision of one of the contracting parties, but a price fixed by one ofthe contracting parties, if accepted by the other, gives rise to a perfected sale.

C. WHEN AND WHERE TO PAY THE PRICECHUA vs. COURT OF APPEALS, G.R. NO. 119255, April 9, 2003

On the agreed date, Chua refused to pay the balance of the purchase price asrequired by the contract to sell, the signed Deeds of Sale, and imposes another


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condition. The vendee is bound to accept delivery and to pay the price of thething sold at the time and place stipulated in the contract.

D. INTERESTART 1589

FULE vs. COURT OF APPEALS, G.R. NO. 112212, March 2, 1998

While it is true that the amount of P40,000.00 forming part of theconsideration was still payable to petitioner, its nonpayment by Dr. Cruz is nota sufficient cause to invalidate the contract or bar the transfer of ownershipand possession of the things exchanged considering the fact that their contractis silent as to when it becomes due and demandable.

Neither may such failure to pay the balance of the purchase price result in thepayment of interest thereon. Article 1589 of the Civil Code prescribes thepayment of interest by the vendee "for the period between the delivery of the

thing and the payment of the price" in the following cases:

(1) Should it have been so stipulated;

(2) Should the thing sold and delivered produce fruits or income;

(3) Should he be in default, from the time of judicial or extrajudicial demand forthe payment of the price.

E. SUSPENSION OF PAYMENT OF THE PRICE

ART 1590CENTRAL BANK OF THE PHILIPPINES vs. SPOUSES ALFONSO, G.R. NO.131074, March 27, 2000

Respondents aver that they are entitled to cancel the obligation altogether inview of petitioner's failure to pay the purchase price when the same becamedue, while Petitioner claims that the respondent failed to comply with theircontractual obligations hence it was entitled to withhold payment of thepurchase price. Should the vendee be disturbed in the possession or ownershipof the thing acquired, he may suspend the payment of the price until the

vendor has cause the disturbance or danger to cease. This is not, however, theonly justified cause for retention or withholding the payment of the agreedprice, but also, if the vendor fails to perform any essential obligation of thecontract.

ART 1592SOLIVA vs. The INTESTATE ESTATE of MARCELO M.VILLALBA, G.R. NO.154017, December 8, 2003


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payment as earnest money, which prompted the respondent to demand specificperformance and damages when the herein petitioners cancelled thetransaction. Whenever earnest money is given in a contract of sale, it shall beconsidered as part of the price and proof of the perfection of the contract, butthe earnest money given in a contract to sell will form part of the consideration

only if the sale is consummated upon full payment of the purchase price.

SAN MIGUEL PROPERTIES PHILIPPINES, INC., vs. SPOUSES HUANG, G.R.NO. 137290. July 31, 2000

The appellate court held that all the requisites of a perfected contract of salehad been complied with upon acceptance of the petitioner of the earnest moneytendered by respondents. It is not the giving of earnest money, but the proof ofthe concurrence of all the essential elements of the contract of sale whichestablishes the existence of a perfected sale.

VII. TRANSFER OF OWNERSHIP

A. DEED OF SALE

ART 1498DAILISAN vs. COURT OF APPEALS, G.R. NO. 176448, July 28, 2008

Respondents question the notarized deed of absolute sale presented by thepetitioner and refused to partition the property purportedly co-owned by them.

Ownership of the thing sold is acquired only from the time of delivery thereof,either actual or constructive, and when the sale is made through a publicinstrument, the execution thereof shall be equivalent to the delivery of thething which is the object of the contract, if from the deed the contrary does notappear or cannot be inferred.

LEONARDO vs MARAVILLA, G.R. NO. 143369, November 27, 2002

It is not disputed that petitioner neither had, nor demanded, materialpossession of the disputed lot as well as the transfer of title to his name

notwithstanding the alleged execution of a deed of absolute sale and it was therespondents who have been in control and possession thereof in the concept ofowners. The execution of the deed of sale is only a presumptive, not conclusivedelivery which can be rebutted by evidence to the contrary, as when there isfailure on the part of the vendee to take material possession of the land subjectof the sale in the concept of a purchaser-owner.


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SPOUSES SABIO vs THE INTERNATIONAL CORPORATE BANK, INC. (nowUNION BANK OF THE PHILIPPINES) et al., G.R. NO. 132709,September 4, 2001

Petitioners claims that, Ayala Corporation failed to "complete and perfectownership and title" to the subject property since it was never in actualoccupation, possession, control and enjoyment of said property due to thepresence of illegal occupants. Notwithstanding the presence of illegaloccupants on the subject property, transfer of ownership by symbolic deliveryunder Article 1498 can still be effected through the execution of the deed ofconveyance in a public document which is equivalent to the delivery of theproperty.

B. CONSTRUCTIVE DELIVERY

ART 1499DY, JR. vs. COURT OF APPEALS, G.R. NO. 92989, July 8, 1991

There is constructive delivery already upon the execution of the publicinstrument pursuant to Article 1498 and upon the consent or agreement of theparties when the thing sold cannot be immediately transferred to thepossession of the vendee. (Art. 1499)

DIGNOS vs CA, G.R. NO. L-59266, February 29, 1988

Although denominated a "Deed of Conditional Sale," a sale is still absolutewhere the contract is devoid of any proviso that title is reserved or the right tounilaterally rescind is stipulated, e.g., until or unless the price is paid.Ownership will then be transferred to the buyer upon actual or constructivedelivery (e.g., by the execution of a public document) of the property sold.

C. POSSESSOR IN GOOD FAITHART 1544DE LEON vs. ONG, G.R. NO. 170405, February 2, 2010

Petitioner delivered the properties to respondent upon the execution of thenotarized deed and handed over to respondent the keys to the properties,hence respondent took actual possession and exercised control over theproperty before he made the second sale. Should there be no inscription,ownership shall pertain to the person who in good faith was first in possession.


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VIII. RISK OF LOSS

ART 1504 (2)AEROSPACE CHEMICAL INDUSTRIES, INC. vs. CA, G.R. NO. 108129September 23, 1999

The petitioner contends that rental expenses of storing sulfuric acid should beat private respondent's account, as a seller, until ownership is transferred. Thegeneral rule that before delivery, the risk of loss is borne by the seller who isstill the owner, is not applicable in this case because petitioner had incurreddelay in the performance of its obligation.

IX. DOCUMENTS OF TITLE

VDA. DE MELENCION vs COURT OF APPEALS, G.R. NO. 148846,

September 25, 2007

A. TORRENS TITLE

The subject property was under the operation of the Torrens System evenbefore the respective conveyances to AZNAR and Go Kim Chuan were made.AZNAR knew of this, and admits this as fact. Yet, despite this knowledge,AZNAR registered the sale in its favor under Act 3344 on the contention that atthe time of sale, there was no title on file.

The fact that the certificate of title over the registered land is lost does notconvert it into unregistered land. After all, a certificate of title is merely anevidence of ownership or title over the particular property described therein. T

Act 3344 provides for the system of recording of transactions or claims overunregistered real estate without prejudice to a third party with a betterright. But if the land is registered under the Land Registration Act (andtherefore has a Torrens Title), and it is sold and the sale is registered notunder the Land Registration Act but under Act 3344, as amended, such sale is

not considered registered, as the term is used under Art. 1544 of the NewCivil Code.

Although it is obvious that Go Kim Chuan registered the sale in his favor underAct 496 while AZNAR did not, SC did not make an outright award of thesubject property to the petitioners solely on that basis. For the law isclear: mere registration of title is not enough. Good faith must accompany theregistration.


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Thus, to be able to enjoy priority status, the second purchaser must bein good faith, i.e., he must have no knowledge of the previous alienation of theproperty by the vendor to another. Notably, what is important for this purposeis not whether the second buyer is a buyer in good faith, but whether he

registers the second sale in good faith, meaning, he does so without knowledgeof any defect in the title over the property sold.

B. FIRST TO REGISTER IN GOOD FAITH

DAUZ vs. SPOUSES ELIGIO, G.R. NO. 152407, September 21, 2007

Respondents caused the registration of the sale of the land in the Registry ofthe Deeds. Petitioners, on the other hand, failed to cause the registration of thesale to them. Where both parties claim to have purchased the same property,

the one who registered the sale in his favor, in good faith, has a preferred rightover the other who has not registered his title, even if the latter is in actualpossession of the immovable property.

SPOUSES AVELINO vs. SPOUSES CELEDONIO, G.R. NO. 135900, August17, 2007

Article 1544 of the Civil Code contemplates a case of double sales or multiplesales by a single vendor. It cannot be invoked where the two different contractsof sale are made by two different persons, one of them not being the owner ofthe property sold.

Spouses ABRIGO vs. DE VERA, G.R. NO. 154409, June 21, 2004

Both petitioners Abrigo and respondent registered the sale of the property, butpetitioners registered their sale under Act 3344, while respondent registeredthe transaction under the Torrens system.

Between two buyers of the same immovable property, the law gives ownershippriority to (1) the first registrant in good faith; (2) then, the first possessor ingood faith; and (3) finally, the buyer who in good faith presents the oldest title.

Since the property in dispute in the present case was already registered underthe Torrens system, petitioners registration of the sale under Act 3344 was not

effective for purposes of Article 1544 of the Civil Code.

SPOUSES OCCEA vs. MORALES OBSIANA, G.R. NO. 156973, June 4,2004


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The general rule is that one who deals with property registered under theTorrens system need not go beyond the same, but only has to rely on the title.He is charged with notice only of such burdens and claims as are annotated on

the title.

However, this principle does not apply when the party has actual knowledge offacts and circumstances that would impel a reasonably cautious man to makesuch inquiry or when the purchaser has knowledge of a defect or the lack oftitle in his vendor or of sufficient facts to induce a reasonably prudent man toinquire into the status of the title of the property in litigation. One who fallswithin the exception can neither be denominated an innocent purchaser forvalue nor a purchaser in good faith.

ISABELA COLLEGES, INC. vs. THE HEIRS OF NIEVES TOLENTINO-RIVERA, G.R. NO. 132677, October 20, 2000

Cortez filed a complaint-in-intervention claiming ownership over two parcels ofland by virtue of a sale in 1988, alleging that the lots were included in the four-hectare land covered by a Torrens Title of petitioner Isabela Colleges.

Even assuming that Cortez was not guilty of bad faith when he bought the landin question, the fact remains that the Isabela Colleges was first in possession.Petitioner has been in possession of the land since 1949. Between petitioner

and Cortez, therefore, the former had a better right for the latter only boughtthe property in 1988 when it was already purchased by and titled under thename of petitioner.

BAYOCA et al vs. GAUDIOSO NOGALES, G.R. NO. 138201. September 12,2000

First buyer registered the sale under Act 3344, while second buyer registeredthe sale under PD 1529. The governing principle is prius tempore, potior jure

(first in time, stronger in right). Knowledge by the first buyer of the second salecannot defeat the first buyers rights except when the second buyer firstregisters in good faith the second sale, conversely, knowledge gained by thesecond buyer of the first sale defeats his rights even if he is first to register,since such knowledge taints his registration with bad faith.

BARICUATRO, JR., vs. COURT OF APPEALS, G.R. NO. 105902February 9, 2000


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Amores was in good faith when he bought the disputed lots. When heregistered his title, however, he already had knowledge of the previous sale ofthe disputed lots to petitioner. Such knowledge tainted his registration with

bad faith, and to merit protection under article 1544, the second buyer mustact in good faith from the time of the sale until the registration of the same

X. REMEDIES OF AN UNPAID SELLER

ART 1484 , 1485PCI LEASING AND FINANCE, INC. vs. GIRAFFE-X CREATIVE IMAGING,INC., G.R. NO. 142618, July 12, 2007

Petitioner having recovered thru (replevin) the personal property sought to be

payable, leased on installments, still demanded the balance of the rent. Inchoosing, through replevin, to deprive the respondent of possession of theleased equipment, the petitioner waived its right to bring an action to recoverunpaid rentals on the said leased items.

ART 1486PEOPLE'S INDUSTRIAL AND COMMERCIAL CORPORATION, vs. COURT OFAPPEALS, G.R. NO. 112733 October 24, 1997

When petitioner failed to abide by its obligation to pay the installments in

accordance with the contract to sell, and provision in the contractautomatically took effect, which provides that "(I)f the buyer fails to pay theinstallments due at the expiration of the grace period, the seller may cancel thecontract and any and all sums of money paid under this contract shall beconsidered and become rentals on the property. A stipulation that theinstallments or rents paid shall not be returned to the vendee or lessee shall bevalid insofar as the same may not be unconscionable under the circumstances.

GIL vs. HON. COURT OF APPEALS, G.R. NO. 127206, September 12, 2003

The consignation by the vendee of the purchase price of the property is

sufficient to defeat the right of the petitioners to demand for a rescission of thesaid deed of absolute sale.

IRINGAN vs. HON. COURT OF APPEALS, G.R. NO. 129107, September 26,2001


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Petitioner contends that no rescission was effected simply by virtue of the lettersent by respondent stating that he considered the contract of sale rescinded.Petitioner asserts that a judicial or notarial act is necessary before one partycan unilaterally effect a rescission.

Respondent, on the other hand, contends that the right to rescind is vested bylaw on the obligee and since petitioner did not oppose the intent to rescind thecontract, petitioner in effect agreed to it and had the legal effect of a mutuallyagreed rescission.Article 1592 of the Civil Code is the applicable provision regarding the sale ofan immovable property.

Article 1592. In the sale of immovable property, even though it may have beenstipulated that upon failure to pay the price at the time agreed upon therescission of the contract shall of right take place, the vendee may pay, evenafter the expiration of the period, as long as no demand for rescission of the

contract has been made upon him eitherjudicially or by a notarial act. After thedemand, the court may not grant him a new term.

A judicial or notarial act is necessary before a valid rescission can take place,whether or not automatic rescission has been stipulated. It is to be noted thatthe law uses the phrase "even though" emphasizing that when no stipulation isfound on automatic rescission, the judicial or notarial requirement still applies.

XI. PERFORMANCE OF A CONTRACT

EASTERN ASSURANCE & SURETY CORPORATION vs. IAC, G.R. NO. L-69450, November 22, 1988

The ordinary meaning of execution is not limited to the signing or concluding ofa contract but includes as well the performance or implementation oraccomplishment of the terms and conditions of such contract.

XII. WARRANTIES

A. EXPRESS WARRANTIES

ART 1502

INDUSTRIAL TEXTILE MANUFACTURING COMPANY OF THE PHILIPPINES,INC., vs. LPJ ENTERPRISES, INC., G.R. NO. 66140, January 21, 1993


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Respondent alleges that it cannot be held liable for the 47,000 plastic bagswhich were not used for packing cement as originally intended invoking it'sright of return. Article 1502 of the Civil Code, has no application at all to thiscase, since the provision in the Uniform Sales Act and the Uniform CommercialCode from which Article 1502 was taken, clearly requires an express written

agreement to make a sales contract either a "sale or return" or a "sale onapproval", which is absent in this case.

Parol or extrinsic testimony could not be admitted for the purpose of showingthat an invoice or bill of sale that was complete in every aspect and purportingto embody a sale without condition or restriction constituted a contract of saleor return. If the purchaser desired to incorporate a stipulation securing to himthe right of return, he should have done so at the time the contract was made.On the other hand, the buyer cannot accept part and reject the rest of thegoods since this falls outside the normal intent of the parties in the "onapproval" situation.

B. IMPLIED WARRANTIESART 1628LO vs. KJS ECO-FORMWORK SYSTEM PHIL., INC., G.R. NO. 149420October 8, 2003

The vendor in good faith shall be responsible for the existence and legality ofthe credit at the time of the sale, unless it should have been sold as doubtful;but not for the solvency of the debtor, unless it has been so expresslystipulated or unless the insolvency was prior to the sale and of commonknowledge.

ART 1546ANG vs. COURT OF APPEALS, G.R. NO. 177874, September 29, 2008

The seller, in declaring that he owned and had clean title to the vehicle at thetime the Deed of Absolute Sale, is giving an implied warranty of title whichprescribes six months after the delivery of the vehicle.

ART 1547PNB vs MEGA PRIME REALTY AND HOLDINGS CORPORATION, G.R. NO.173454, October 6, 2008

MEGA PRIME REALTY AND HOLDINGS CORPORATION vs. PNB, G.R. NO.173456, October 6, 2008

In a contract of sale, unless a contrary intention appears, there is an impliedwarranty on the part of the seller that he has a right to sell the thing at thetime when the ownership is to pass, and that the buyer shall have a peaceful


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possession of the thing and it shall be free from any hidden faults or defects, orany charge or encumbrance not declared or known to the buyer.

ART 1548ANG vs. COURT OF APPEALS, G.R. NO. 177874, September 29, 2008

The seller, in pledging that he will defend the same from all claims or anyclaim whatsoever [and] will save the vendee from any suit by the government ofthe Republic of the Philippines, is giving a warranty against eviction. A breach

of this warranty requires the concurrence of these four requisites:(1) Thepurchaser has been deprived of the whole or part of the thing sold; (2) Thiseviction is by a final judgment; (3) The basis thereof is by virtue of a right priorto the sale made by the vendor; and (4) The vendor has been summoned andmade co-defendant in the suit for eviction at the instance of the vendee.

ART 1561DE YSASI vs. ARCEO, G.R. NO. 136586, November 22, 2001

Petitioner admitted that he inspected the premises three or four times beforesigning the lease contract and during his inspection, he noticed the rottenplywood on the ceiling which in his opinion was caused by leaking water or"anay" (termites), yet he decided to go through with the lease agreement. Thelessor is responsible for warranty against hidden defects, but he is notanswerable for patent defects or those which are visible.

C. REMEDIES AGAINST VIOLATIONS OF WARRANTIES

ART 1567ENGINEERING & MACHINERY CORPORATION vs. COURT OF APPEALS,G.R. NO. 52267, January 24, 1996

The original complaint is one for damages arising from breach of a writtencontract - and not a suit to enforce warranties against hidden defects. Theremedy against violations of the warranty against hidden defects is either towithdraw from the contract (redhibitory action) or to demand a proportionate

reduction of the price (accion quanti minoris), with damages in either case.

ART 1571DINO vs COURT OF APPEALS, G.R. NO. 113564, June 20, 2001


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The petitioner agreed to deliver the scrap iron only upon payment of thepurchase price by means of an irrevocable and unconditional letter of credit,which the respondent failed to obtain, thus, there was no actual sale. Wherethe goods have not been delivered to the buyer, and the buyer has repudiated

the contract of sale, or has manifested his inability to perform his obligations,thereunder, or has committed a breach thereof, the seller may totally rescindthe contract of sale by giving notice of his election to do to the buyer.

XIV. EXTINGUSHMENT OF THE SALE

A. SALE WITH PACTO DE RETRO

ART 1601NOOL vs. COURT OF APPEALS, G.R. NO. 116635, July 24, 1997

Petitioners contend that they could repurchase the property that they "sold" toprivate respondents when they allowed the respondent to redeem the propertiesfor them from DBP. DBP, however, certified that the petitioner-mortgagors'right of redemption was not exercised within the period, hence DBP became theabsolute owner of said parcels of land when it entered into a Deed ofConditional Sale involving the same parcels of land with Private Respondent asvendee. One "repurchases" only what one has previously sold since the right torepurchase presupposes a valid contract of sale between the same parties.

DIAMANTE vs. HON. COURT OF APPEALS, G.R. NO. L-51824 February 7,

1992

A right to repurchase was granted subsequently in an instrument differentfrom the original document of sale which caused the cancellation of the permitor lease by the Secretary of Fisheries. An agreement to repurchase becomes apromise to sell when made after the sale, because when the sale is madewithout such an agreement, the purchaser acquires the thing sold absolutely,and if he afterwards grants the vendor the right to repurchase, it is a newcontract entered into by the purchaser, as absolute owner already of the object.

VASQUEZ vs. HONORABLE COURT OF APPEALS, G.R. NO. 83759 July 12,1991

Respondents sold the lot to the petitioners under a Deed of Sale, On the sameday and along with the execution of the Deed of Sale, a separate instrument,denominated as Right to Repurchase was executed by the parties, Later,petitioners resisted the action for redemption. The transaction between the


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It is not disputed that co-ownership exists but the lower court disallowedredemption because it considered the vendee, Vallangca, a co-heir, beingmarried to Concepcion Villanueva.

The term "third person" or "stranger in Art. 1620refers to all persons who are

not heirs in succession, either by will or the law or any one who is not a co-owner.

ART 1621PRIMARY STRUCTURES CORP. vs. SPS. VALENCIA, G.R. NO. 150060.August 19, 2003

Article 1621 of the Civil Code expresses that the right of redemption it grants toan adjoining owner of the property conveyed may be defeated if it can be shownthat the buyer or grantee does not own any other rural land.

ART 1622G.R. NO. 134117. February 9, 2000SEN PO EK MARKETING CORPORATION vs. MARTINEZ

Petitioner invokes its right of first refusal against private respondents, whenTeodora sold the property that petitioner has been leasing. Article 1622 of theNew Civil Code only deals with small urban lands that are bought forspeculation where only adjoining lot owners can exercise the right of pre-emption or redemption. It does not apply to a lessee trying to buy the land thatit was leasing, especially when such right was never stipulated in any of theseveral lease contracts.

ART 1623CABALES vs. COURT OF APPEALS, G.R. NO. 162421, August 31, 2007

Petitioners may redeem the subject property from respondents-spouses, butthey must do so within thirty days from notice in writing of the sale by their co-owners vendors. In requiring written notice, Art. 1623 seeks to ensure that theredemptioner is properly notified of (a) the sale and (b) the date of such notice,as the date thereof becomes the reckoning point of the 30-day period ofredemption.

SPOUSES SI vs. COURT OF APPEALS, G.R. NO. 122047, October 12, 2000

Co-owners with actual notice of the sale are not entitled to written notice. Awritten notice is a formal requisite to make certain that the co-owners have


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actual notice of the sale to enable them to exercise their right of redemptionwithin the limited period of thirty days. But where the co-owners had actualnotice of the sale at the time thereof and/or afterwards, a written notice of afact already known to them, would be superfluous. The statute does notdemand what is unnecessary.

FRANCISCO vs. BOISER, G.R. NO. 137677, May 31, 2000

Art. 1623 of the Civil Code is clear in requiring that the written notificationshould come from the vendor or prospective vendor, not from any other person.Since the vendor of an undivided interest is in the best position to know whoare his co-owners who under the law must be notified of the sale, and is in thebest position to confirm whether consent to the essential obligation of sellingthe property and transferring ownership thereof to the vendee has been given.

LEDONIO vs. CAPITOL DEVELOPMENT CORPORATION, G.R. NO. 149040,July 4, 2007

An assignment of credit has been defined as an agreement by virtue of whichthe owner of a credit (known as the assignor), by a legal cause - such as sale,dation in payment or exchange or donation - and without need of the debtor'sconsent, transfers that credit and its accessory rights to another (known as theassignee), who acquires the power to enforce it, to the same extent as theassignor could have enforced it against the debtor.

ART 1625

TEOCO, JR.,vs METROPOLITAN BANK AND TRUST COMPANY, G.R. NO.162333, December 23, 2008

Would the exercise by the brothers Teoco of the right to redeem the propertiesin question be precluded by the fact that the assignment of right of redemptionwas not contained in a public document? NO, the phrase "effect as againstthird person" in Article 1625 of the Civil Code is interpreted as to be damage orprejudice to such third person, hence if the third person would not beprejudiced then the assignment of right to redeem may not be in a publicinstrument.

B. EQUITABLE MORTGAGE

ART 1602HEIRS OF JOSE REYES, JR. vs. REYES, G.R. NO. 158377, August 13,2010


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The provisions of the Civil Code governing equitable mortgages disguised assale contracts, like the one herein, are primarily designed to curtail the evilsbrought about by contracts of sale with right to repurchase, particularly thecircumvention of the usury law and pactum commissorium. Courts have takenjudicial notice of the well-known fact that contracts of sale with right to

repurchase have been frequently resorted to in order to conceal the true natureof a contract, that is, a loan secured by a mortgage. It is a reality that gravefinancial distress renders persons hard-pressed to meet even their basic needsor to respond to an emergency, leaving no choice to them but to sign deeds ofabsolute sale of property or deeds of sale with pacto de retro if only to obtainthe much-needed loan from unscrupulous money lenders. This reality preciselyexplains why the pertinent provision of the Civil Codeincludes a peculiar ruleconcerning the period of redemption, to wit:

Art. 1602. The contract shall be presumed to be anequitable mortagage, in any of the following cases:

x x x

(3) When upon or after the expiration of the right torepurchase another instrument extending the period ofredemption or granting a new period is executed;

VDA. DE DELFIN vs DELLOTA, G.R. NO. 143697, January 28, 2008

The essential requisites of an equitable mortgage are: (1) the parties enter intowhat appears to be a contract of sale, (2) but their intention is to secure an

existing debt by way of mortgage and the presence of even one of thecircumstances enumerated in Article 1602.

SPS. SANTIAGO vs. DIZON, G.R. NO. 172771, January 31, 2008

Respondent alleged that the transaction was an equitable mortgage becauseafter the sale of the property respondent remained therein, and the priceaccording to respondent was grossly inadequate. The presumption of equitablemortgage created in Article 1602 of the Civil Code is not conclusive and may berebutted by competent and satisfactory proof of the contrary.

CEBALLOS vs. Intestate Estate of the Late EMIGDIO MERCADO, G.R. NO.155856, May 28, 2004


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desisted from making further payment to petitioner due to petitioner's failure todevelop the subdivision project according to the approved plans and within thetime limit for complying with the same.

PNB vs. OFFICE OF THE PRESIDENT, G.R. NO. 104528, January 18, 1996

A buyer of a property at a foreclosure sale cannot disposses prior purchaserson installment of individual lots therein, or compel them to pay again for thelots which they previously bought from the defaulting mortgagor-subdivisiondeveloper on the theory that P.D. 957, "The Subdivision and CondominiumBuyers' Protective Decree", is not applicable to the mortgage contract inquestion, the same having been executed prior to the enactment of P.D. 957.

Moreover, the SC held that, P.D. 957 being applicable, Section 18 of said law

obliges petitioner Bank to accept the payment of the remaining unpaidamortizations tendered by private respondents. Privity of contracts as a defensedoes not apply in this case for the law explicitly grants to the buyer the optionto pay the installment payment for his lot or unit directly to the mortgagee(petitioner), which is required to apply such payments to reduce thecorresponding portion of the mortgage indebtedness secured by the particularlot or unit being paid for.

XVI. The Condominium Act (R.A. NO. 4726)

HULST vs. PR BUILDERS, INC., G.R. NO. 156364, September 25, 2008

Petitioner contends that the Contract to Sell between petitioner and respondentinvolved a condominium unit and did not violate the Constitutionalproscription against ownership of land by aliens. The law expressly allowsforeigners to acquire condominium units and shares in condominiumcorporations up to not more than 40% of the total and outstanding capitalstock of a Filipino-owned or controlled corporation, since under this set up, theownership of the land is legally separated from the unit itself.

CARDINAL BUILDING OWNERS ASSOCIATION, INC. vs. ASSET RECOVERYAND MANAGEMENT CORPORATION, G.R. No. 149696, July 14, 2006

Section 20 of R.A. No. 4726, otherwise known as the Condominium Act,provides:


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SUCCESSION

Death & Presumptive Death & Death of Marriage;

Inheritance v. Succession, Patrimony; Money Obligations

Transmission, Non-transmission; Presumptive Legitimes

Survivorship Agreement, Succession & Taxes; Aleatory Contract (Art.2010, NCC)

Laws governing Form and content

In the matter of the Testate Estate of Edward Christensen, G.R. L-16749,

January 31, 1963Whether or not, the intrinsic validity of the testamentary disposition should begoverned by Philippine Law, when the national law of the testator refers back tothe Philippine Law. Edward is domiciled in the Philippines hence, Philippinecourt must apply its own laws which makes natural children legallyacknowledge as forced heirs of the parent recognizing them.

Vitug vs. Court of Appeals, G.R.NO. 82027, Mar. 29, 1990 183 SCRA 755A will has been defined as "a personal, solemn, revocable and free act by whicha capacitated person disposes of his property and rights and declares orcomplies with duties to take effect after his death."

Cayatenao vs Leonidas, 129 SCRA 524

The law which governs Adoracion Campos will is the law of Pennsylvania, USAwhich is the national law of the decedent. It is settled that as regards to theintrinsic validity of the provisions of the wills as provided for by article 16 and1039 of the New Civil Code, the national law of the decedent must apply.

Subjects and Object of Succession

Parish Priest of Victoria vs. Rigor, 89 SCRA 483

The issue in this case is whether or not a male relative referred in the willshould include those who are born after the testators death. To construe it asreferring to the nearest male relative at any time after his death would render


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Echavez vs. Dozen Cons., G.R.NO. 192916, Oct. 11, 2010

An attestation must state all the details the third paragraph of Article 805requires. In the absence of the required avowal by the witnesses themselves,no attestation clause can be deemed embodied in the Acknowledgement of theDeed of Donation Mortis Causa.

Lopez v. Lopez, G.R.NO. 189984, Nov. 12, 2012

The law is clear that the attestation must state the number of pages used uponwhich the will is written. The purpose of the law is to safeguard againstpossible interpolation or omission of one or some of its pages and prevent anyincrease or decrease in the pages.

Azuela v. CA, 487 SCRA 119

The signatures on the left-hand corner of every page signify, among others, thatthe witnesses are aware that the page they are signing forms part of the will.On the other hand, the signatures to the attestation clause establish that thewitnesses are referring to the statements contained in the attestation clauseitself.

Lee v. Tambago, 544 SCRA 393

An acknowledgment is the act of one who has executed a deed in going beforesome competent officer or court and declaring it to be his act or deed. Itinvolves an extra step undertaken whereby the signatory actually declares tothe notary public that the same is his or her own free act and deed. Theacknowledgment in a notarial will has a two-fold purpose: (1) to safeguard thetestators wishes long after his demise and (2) to assure that his estate isadministered in the manner that he intends it to be done.

Suroza vs. Honrado, 110 SCRA 388

In the opening paragraph of the will, it was stated that English was a language"understood and known" to the testatrix but in its concluding paragraph, it wasstated that the will was read to the testatrix "and translated into Filipino

language". That could only mean that the will was written in a language notknown to the illiterate testatrix and, therefore, it is void because of themandatory provision of article 804 of the Civil Code that every will must beexecuted in a language or dialect known to the testator.


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Garcia vs. Vasquez, 32 SCRA 489

The rationale behind the requirement of reading the will to the testator if he isblind or incapable of reading the will himself (as when he is illiterate), is tomake the provisions thereof known to him, so that he may be able to object ifthey are not in accordance with his wishes. That the aim of the law is to insurethat the dispositions of the will are properly communicated to and understoodby the handicapped testator, thus making them truly reflective of his desire, isevidenced by the requirement that the will should be read to the latter, not onlyonce but twice, by two different persons, and that the witnesses have to actwithin the range of his (the testator's) other senses.

Alvarado vs. Gaviola, Jr., 226 SCRA 348

This Court has held in a number of occasions that substantial compliance is

acceptable where the purpose of the law has been satisfied, the reason beingthat the solemnities surrounding the execution of wills are intended to protectthe testator from all kinds of fraud and trickery but are never intended to be sorigid and inflexible as to destroy the testamentary privilege.

In the case at bar, private respondent read the testator's will and codicil aloudin the presence of the testator, his three instrumental witnesses, and thenotary public. Prior and subsequent thereto, the testator affirmed, upon beingasked, that the contents read corresponded with his instructions. Only thendid the signing and acknowledgement take place. There is no evidence, andpetitioner does not so allege, that the contents of the will and codicil were not

sufficiently made known and communicated to the testator. On the contrary,with respect to the "Huling Habilin," the day of the execution was not the firsttime that Brigido had affirmed the truth and authenticity of the contents of thedraft. The uncontradicted testimony of Atty. Rino is that Brigido Alvaradoalready acknowledged that the will was drafted in accordance with hisexpressed wishes even prior to 5 November 1977 when Atty. Rino went to thetestator's residence precisely for the purpose of securing his conformity to thedraft.

Javellana vs. Ledesma GR. No. L-7179, 97 Phil 258

The subsequent signing and sealing by the notary of his certification that thetestament was duly acknowledged by the participants therein is no part of theacknowledgment itself nor of the testamentary act. Hence their separateexecution out of the presence of the testatrix and her witnesses cannot be saidto violate the rule that testaments should be completed without interruption.


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Cruz vs. Villasor NO.L-32213, 54 SCRA 31

The notary public before whom the will was acknowledged cannot beconsidered as the third instrumental witness since he cannot acknowledgebefore himself his having signed the will. This cannot be done because hecannot split his personality into two so that one will appear before the other toacknowledge his participation in the making of the will.

Caneda vs. CA, 222 SCRA 781

The rule on substantial compliance in Article 809 cannot be revoked or reliedon by respondents since it presupposes that the defects in the attestationclause can be cured or supplied by the text of the will or a consideration ofmatters apparent therefrom which would provide the data not expressed in theattestation clause or from which it may necessarily be gleaned or clearly

inferred that the acts not stated in the omitted textual requirements wereactually complied within the execution of the will.

Lopez v. Lopez, 685 SCRA 209

The statement in the Acknowledgment portion of the subject last will andtestament that it "consists of 7 pages including the page on which theratification and acknowledgment are written" cannot be deemed substantialcompliance. The will actually consists of 8 pages including its acknowledgmentwhich discrepancy cannot be explained by mere examination of the will itself

but through the presentation of evidence aliunde.

Guerrero v. Bihis, 521 SCRA 394

The issue in this case whether the will acknowledged by the testatrix and theinstrumental witnesses before a notary public acting outside the place of hiscommission satisfies the requirement under Article 806 of the Civil Code?Outside the place of his commission, he is bereft of power to perform anynotarial act; he is not a notary public. Any notarial act outside the limits of hisjurisdiction has no force and effect.

Celada v. Abena, 556 SCRA 569

While it is true that the attestation clause is not a part of the will, error in thenumber of pages of the will as stated in the attestation clause is not material toinvalidate the subject will. It must be noted that the subject instrument isconsecutively lettered with pages A, B, and C which is a sufficient safeguardfrom the possibility of an omission of some of the pages.


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Form and Solemnities of Holographic Wills

Rodelas vs. Aranza, 119 SCRA 16

The photostatic or xerox copy of a lost or destroyed holographic will may beadmitted because then the authenticity of the handwriting of the deceased can

be determined by the probate court.

Codoy vs. Calugay, 312 SCRA 333

The word shall connotes a mandatory order. We have ruled that shall in astatute commonly denotes an imperative obligation and is inconsistent with theidea of discretion and that the presumption is that the word shall, when usedin a statute is mandatory."

Ajero vs. CA, 236 SCRA 488

Thus, unless the unauthenticated alterations, cancellations or insertions weremade on the date of the holographic will or on testator's signature, theirpresence does not invalidate the will itself. The lack of authentication will onlyresult in disallowance of such changes.

Kalaw vs. Relova, 132 SCRA 237

To state that the Will as first written should be given efficacy is to disregard theseeming change of mind of the testatrix. But that change of mind can neitherbe given effect because she failed to authenticate it in the manner required bylaw by affixing her full signature.

Roxas vs. De Jesus, 134 SCRA 245

As a general rule, the "date" in a holographic Will should include the day,month, and year of its execution. However, when as in the case at bar, there isno appearance of fraud, bad faith, undue influence and pressure and theauthenticity of the Will is established and the only issue is whether or not thedate "FEB.,61" appearing on the holographic Will is a valid compliance with

Article 810 of the Civil Code, probate of the holographic Will should be allowedunder the principle of substantial compliance.

Labrador vs. CA, 184 SCRA 170


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The law does not specify a particular location where the date should be placedin the will. The only requirements are that the date be in the will itself andexecuted in the hand of the testator.

Seangio v. Reyes, 508 SCRA 172

Holographic wills being usually prepared by one who is not learned in the law,as illustrated in the present case, should be construed more liberally than theones drawn by an expert, taking into account the circumstances surroundingthe execution of the instrument and the intention of the testator.

Palaganas v. Palaganas, 2011 640 SCRA 538

A foreign will can be given legal effects in our jurisdiction. But, reprobate or re-authentication of a will already probated and allowed in a foreign country isdifferent from that probate where the will is presented for the first time before acompetent court.

Vda.De Perez vs. Tolete, 232 SCRA 722

What the law expressly prohibits is the making of joint wills either for thetestators reciprocal benefit or for the benefit of a third person (Civil Code of thePhilippines, Article 818). In the case at bench, the Cunanan spouses executedseparate wills. Since the two wills contain essentially the same provisions andpertain to property which in all probability are conjugal in nature, practicalconsiderations dictate their joint probate.

Revocation of Wills and Testamentary Disposition

Modes of Revocation

Casiano vs CA 158 SCRA 451

Revocation under this condition to be effective must have complied with thetwo requirements: the overt act as mentioned under the law; the intent torevoke on the part of the testator. The document or paper burned by one of thewitnesses was not satisfactorily established to be the will at all, much less thewill of Adriana.

Adriana Maloto vs. CA, 158 SCRA 451


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Where practically considerations demand that the intrinsic validity of the willbe passed upon, even before it is probated, the court should meet the issue.

Legitime, Institution, Preterition

Aznar vs. Duncan, 17 SCRA 590

To constitute preterition, the omission must be total and complete, such thatnothing must be given to the compulsory heir.

Acain vs. IAC, 155 SCRA 100

Preterition annuls the institution of an heir and annulment throws open tointestate succession the entire inheritance. The only provisions which do notresult in intestacy are the legacies and devises made in the will for they shouldstand valid and respected, except insofar as the legitimes are concerned.

Nuguid vs. Nuguid, 17 SCRA 449

The will here does not explicitly disinherit the testatrix's parents, the forcedheirs. It simply omits their names altogether. Said will rather than be labeledineffective disinheritance is clearly one in which the said forced heirs sufferfrom preterition.

Seangio v. Reyes G.R.NO. 140371-72, Nov. 27, 2006 508 SCRA 172

The mere mention of the name of one of the petitioners, Virginia, in thedocument did not operate to institute her as the universal heir. Her name wasincluded plainly as a witness to the altercation between Segundo and his son,Alfredo.

Legitime and Simulated Contracts; Spousal Marital Estrangement

Francisco vs. Francisco-Alfonso, 354 SCRA 112

Obviously, the sale was Gregorio's way to transfer the property to hisillegitimate daughters at the expense of his legitimate daughter. The sale wasexecuted to prevent respondent Alfonso from claiming her legitime and rightfulshare in said property.

Capitle v. Elbambuena, 509 SCRA 444


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Although estranged from Olar, respondent Fortunata remained his wife andlegal heir, mere estrangement not being a legal ground for the disqualificationof a surviving spouse as an heir of the deceased spouse.

Reserva TroncalArt. 891

Sienes vs. Esparcia, 1 SCRA 750

The sale made by Andrea Gutang in favor of appellees was, therefore, subject tothe condition that the vendees would definitely acquire ownership, by virtue ofthe alienation, only if the vendor died without being survived by any personentitled to the reservable property. Inasmuch much as when Andrea Gutangdied, Cipriana Yaeso was still alive, the conclusion becomes inescapable thatthe previous sale made by the former in favor of appellants became of no legaleffect and the reservable property subject matter thereof passed in exclusiveownership to Cipriana.

Gonzales vs. CFI, 104 SCRA 479

Mrs. Legarda could not convey in her holographic will to her sixteengrandchildren the reservable properties which she had inherited from herdaughter Filomena because the reservable properties did not form part of herestate (Cabardo vs. Villanueva, 44 Phil. 186, 191). The reservor cannot make adisposition mortis causa of the reservable properties as long as the reserveessurvived the reservor.

Vizconde v. CA, 286 SCRA 217

Estrellita, it should be stressed, died ahead of Rafael, in fact, it was Rafael whoinherited from Estrellita an amount more than the value of the Valenzuelaproperty. Hence, even assuming that the Valenzuela property may be collatedcollation may not be allowed as the value of the Valenzuela property has longbeen returned to the estate of Rafael.

Substitution of Heirs

Palacios vs Ramirez, 111 SCRA 704

The word degree means generation and the present code has obviouslyfollowed this interpretation by providing that the substitution shall not gobeyond one degree from the heir originally instituted. The code thus clearlyindicates that the second heir must be related to and one generation from thefirst heir.


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Crisologo vs Singzon, 49 SCRA 491

In fideicommissary substitution clearly impose an obligation upon the first heirto preserve and transmit to another the whole or part of the estate bequeathed

to him, upon his death or upon the happening of a particular event.

Legal or Intestate Succession

Rosales vs Rosales, 148 SCRA 69

The daughter-in-law is not an intestate heir of her spouses parents. There isno provision in the civil code which states that a widow is an intestate heir ofher mother-in-law.

Delos Santos vs Dela Cruz, 37 SCRA 555

In an intestate succession, a grandniece of the deceased cannot participate inthe inheritance with the surviving nieces and nephews because the existence ofthe latter excluded the more distant relatives. In the collateral line, the right ofrepresentation does not go beyond the children of brothers and sisters.

Corpuz vs Corpuz, 85 SCRA 567

Since, Teodoro was an acknowledged natural child or was illegitimate and sinceJuanita was the legitimate child of Tomas, himself was a legitimate child,appellant Tomas has no cause of action to recovery of the supposed hereditaryshare of his daughter, Juanita as a legal heir, in Yangcos estate.

Santillon vs Mirandan, 14 SCRA 563

If there is only one legitimate child surviving with the spouse since they shallequally, one-half of the estate goes to the child and the other half goes to thesurviving spouse. Although the law refers to children or descendants, the rulein the statutory construction that the plural can be understood to include thesingular.

Bacayo vs Borromeo, 14 SCRA 986

A decedents uncle and aunt may not succeed intestate so long as nephews andnieces of the decedent survive and are willing and qualified to succeed. In thiscase, the nephews and nieces were not inheriting by right of representationbecause they only do so if they concur with the brothers and sisters of thedecedent.

Provisions Common to Testate and Intestate Succession

Legitime; Proximity & Representation; Art. 962;


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Bagunu vs. Piedad, 347 SCRA 571

The rule on proximity is a concept that favors the relatives nearest in degree tothe decedent and excludes the more distant ones except when and to theextent that the right of representation can apply. In the collateral line, the rightof representation may only take place in favor of the children of brothers orsisters of the decedent when such children survive with their uncles or aunts.

Sayson vs. CA, 205 SCRA 321

The relationship created by the adoption is between only the adopting parentsand the adopted child and does not extend to the blood relatives of either party.

Corpus vs. Corpus, 85 SCRA 567

In default of natural ascendants, natural and legitimated children shall besucceeded by their natural brothers and sisters in accordance with the rulesestablished for legitimate brothers and sisters." Hence, Teodoro R. Yangco'shalf brothers on the Corpus side, who were legitimate, had no right to succeedto his estate under the rules of intestacy.

Suntay v. Cojuangco-Suntay, 621 SCRA 142

Petitioners argument that the successional bar between the legitimate andillegitimate relatives of a decedent does not apply in this instance where factsindubitably demonstrate the contraryEmilio III, an illegitimate grandchild ofthe decedent, was actually treated by the decedent and her husband as theirown son, reared from infancy, educated and trained in their businesses, and

eventually legally adopted by decedents husband, the original oppositor torespondents petition for letters of administration.

Diaz vs. IAC, 150 SCRA 645

It is therefore clear from Article 992 of the New Civil Code that the phrase"legitimate children and relatives of his father or mother" includes SimonaPamuti Vda. de Santero as the word "relative" includes all the kindred of theperson spoken of. The record shows that from the commencement of this casethe only parties who claimed to be the legitimate heirs of the late SimonaPamuti Vda. de Santero are Felisa Pamuti Jardin and the six minor natural or

illegitimate children of Pablo Santero.

Diaz vs. IAC, 182 SCRA 427

The term relatives,although used many times in the Code, is not defined by it.In accordance therefore with the canons of statutory interpretation, it shouldbe understood to have a general and inclusive scope, inasmuch as the term is ageneral one.


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(1) Except as provided by Article 1825, persons who are not partners as to eachother are not partners as to third persons;(2) Co-ownership or co-possession does not of itself establish a partnership,whether such co-owners or co-possessors do or do not share any profits madeby the use of the property;

(3) The sharing of gross returns does not of itself establish a partnership,whether or not the persons sharing them have a joint or common right orinterest in any property which the returns are derived;(4) The receipt by a person of a share of the profits of a business is a prima

facieevidence that he is a partner in the business, but no such inference shallbe drawn if such profits were received in payment:

(a) As a debt by installment or otherwise;(b) As wages of an employee or rent to a landlord;(c) As an annuity to a widow or representative of a deceased partner;(d) As interest on a loan, though the amount of payment vary with the profits of

the business;(e) As the consideration for the sale of a goodwill of a business or other propertyby installments or otherwise.

II. Rights and Obligations of Partnership

ALFREDO N. AGUILA, JRvs.COURT OF APPEALS and FELICIDAD S. VDA.DE ABROGAR, G.R. NO. 127347, November 25, 1999

Under Art. 1768 of the Civil Code, a partnership has a juridical personality

separate and distinct from that of each of the partners. The partners cannotbe held liable for the obligations of the partnership unless it is shown that thelegal fiction of a different juridical personality is being used for fraudulent,unfair, or illegal purposes, hence it is the partnership, not its officers or agents,which should be impleaded in any litigation involving property registered in itsname, violation of this rule will result in the dismissal of the complaint.

Villareal vs. Ramirez, G.R. NO. 144214. July 14, 2003

Since it is the partnership, as a separate and distinct entity, that must refundthe shares of the partners, the amount to be refunded is necessarily limited to

its total resources. In other words, it can only pay out what it has in its coffers,which consists of all its assets. However, before the partners can be paid theirshares, the creditors of the partnership must first be compensated. After all thecreditors have been paid, whatever is left of the partnership assets becomesavailable for the payment of the partners shares.

Angeles vs. Secretary of Justice, G.R. NO. 142612, July 29, 2005


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The Angeles spouses position that there is no partnership because of the lackof a public instrument indicating the same and a lack of registration with theSecurities and Exchange Commission (SEC) holds no water for the followingreasons: first, the Angeles spouses contributed money to the partnership andnot immovable property; and second, mere failure to register the contract of

partnership with the SEC does not invalidate a contract that has the essentialrequisites of a partnership. The purpose of registration of the contract ofpartnership is to give notice to third parties. Failure to register the contract ofpartnership does not affect the liability of the partnership and of the partnersto third persons. Neither does such failure to register affect the partnershipsjuridical personality. A partnership may exist even if the partners do not usethe words partner or partnership.

Ortega vs. CA, G.R. NO. 109248, July 3, 1995

The right to choose with whom a person wishes to associate himself is the very

foundation and essence of that partnership. Its continued existence is, in turn,dependent on the constancy of that mutual resolve, along with each partner'scapability to give it, and the absence of a cause for dissolution provided by thelaw itself. Verily, any one of the partners may, at his sole pleasure, dictate adissolution of the partnership at will. He must, however, act in good faith, notthat the attendance of bad faith can prevent the dissolution of thepartnership but that it can result in a liability for damages. Amongpartners,mutual agency arises and the doctrine of delectus personaeallowsthem to have the power, although not necessarily the right, to dissolve thepartnership. An unjustified dissolution by the partner can subject him to apossible action for damages.

III. Rights and Obligations of Partners Among Themselves

Liwanag vs. CA, G.R. NO. 114398, October 24, 1997

Petitioner was charged with the crime of estafa and advances the theory thatthe intention of the parties was to enter into a contract of partnership, whereinRosales (private complainant for Estafa) would contribute the funds while shewould buy and sell the cigarettes, and later divide the profits betweenthem But even assuming that a contract of partnership was indeed entered

into by and between the parties, SC ruled that when money or property havebeen received by a partner for a specific purpose (such as that obtaining in theinstant case) and he later misappropriated it, such partner is guilty of estafa.

Moran, Jr. vs. CA, G.R. NO. L-59956, October 31, 1984

The rule is, when a partner who has undertaken to contribute a sum of moneyfails to do so, he becomes a debtor of the partnership for whatever he may have


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II. Powers

III. Express vs. Implies Agency

Lintoja vs. Eternit Corp., G.R. NO. 144805, June 8, 2006

An agency may be expressed or implied from the act of the principal, from hissilence or lack of action, or his failure to repudiate the agency knowing thatanother person is acting on his behalf without authority. Acceptance by theagent may be expressed, or implied from his acts which carry out the agency,or from his silence or inaction according to the circumstances. Agency may beoral unless the law requires a specific form. However, to create or convey realrights over immovable property, a special power of attorney is necessary. Thus,

when a sale of a piece of land or any portion thereof is through an agent, theauthority of the latter shall be in writing, otherwise, the sale shall be void.

IV. Agency by Estoppel

Naguiat vs. Court of Appeals, G.R. NO. 118375, October 3, 2003

The Court of Appeals recognized the existence of an agency by estoppels citingArticle 1873 of the Civil Code. Apparently, it considered that at the very least,as a consequence of the interaction between Naguiat and Ruebenfeldt, Queao

got the impression that Ruebenfeldt was the agent of Naguiat, but Naguiat didnothing to correct Queaos impression. In that situation, the rule isclear. One who clothes another with apparent authority as his agent, andholds him out to the public as such, cannot be permitted to deny the authorityof such person to act as his agent, to the prejudice of innocent third partiesdealing with such person in good faith, and in the honest belief that he is whathe appears to be. The Court of Appeals is correct in invoking the said rule onagency by estoppel.

V. General vs. Special Agency

Siasat vs. Intermediate Appellate Court, G.R. NO. L-67889, October 10,1985

A general agent is one authorized to do all acts pertaining to a business of acertain kind or at a particular place, or all acts pertaining to a business of aparticular class or series. He has usually authority either expressly conferred


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VICTORIAS MILLING CO., INC. vs. COURT OF , G.R. NO. 117356, June 19,2000

One factor which most clearly distinguishes agency from other legal concepts is

control; one person - the agent - agrees to act under the control or direction ofanother - the principal. Indeed, the very word "agency" has come to connotecontrol by the principal. The control factor, more than any other, has causedthe courts to put contracts between principal and agent in a separate category.

X. Irrevocable Agency

Republic vs. Evangelista, G.R. NO. 156015, August 11, 2005

A contract of agency is generally revocable as it is a personal contract ofrepresentation based on trust and confidence reposed by the principal on hisagent. As the power of the agent to act depends on the will and license of theprincipal he represents, the power of the agent ceases when the will orpermission is withdrawn by the principal. Thus, generally, the agency may berevoked by the principal at will. However, an exception to the revocability of acontract of agency is when it is coupled with interest, i.e., if a bilateral contractdepends upon the agency. The reason for its irrevocability is because theagency becomes part of another obligation or agreement. It is not solely therights of the principal but also that of the agent and third persons which areaffected. Hence, the law provides that in such cases, the agency cannot berevoked at the sole will of the principal.

Lim vs. Saban, G.R. NO. 163720, December 16, 2004

Under Article 1927 of the Civil Code, an agency cannot be revoked if a bilateralcontract depends upon it, or if it is the means of fulfilling an obligation alreadycontracted, or if a partner is appointed manager of a partnership in thecontract of partnership and his removal from the management isunjustifiable. Stated differently, an agency is deemed as one coupled with aninterest where it is established for the mutual benefit of the principal and of theagent, or for the interest of the principal and of third persons, and it cannot berevoked by the principal so long as the interest of the agent or of a third person

subsists. In an agency coupled with an interest, the agents interest must bein the subject matter of the power conferred and not merely an interest in theexercise of the power because it entitles him to compensation. When an agentsinterest is confined to earning his agreed compensation, the agency is not onecoupled with an interest, since an agents interest in obtaining hiscompensation as such agent is an ordinary incident of the agency relationship.


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lost or destroyed through enemy action his obligation to pay the loans wasthereby extinguished.

The chattel mortgage on the crops growing on appellant's land simply stood asa security for the fulfillment of appellant's obligation, which is the payment of

the loan. The loss of the crops did not extinguish his obligation to pay, becausehis obligation, as a simple loan or mutuum, was to pay a generic thing, theamount of money with interest.

HERRERA vs. PETROPHIL CORPORATION, G.R. NO. L-48349 December29, 1986

The difference between a discount and a loan or forbearance is that the formerdoes not have to be repaid. The loan or forbearance is subject to repaymentand is therefore governed by the laws on usury.

BRIONES vs. CAMMAYO, G.R. NO. L-23559, October 4, 1971

In simple loan with stipulation of usurious interest, the prestation of the debtorto pay the principal debt, which is the cause of the contract is not illegal. Theillegality lies only as to the prestation to pay the stipulated interest. Hence,being separable, the latter only should be deemed void, since it is the only onethat is illegal.

II. DEPOSIT

INTEGRATED REALTY CORPORATION vs. PHILIPPINE NATIONAL BANK,G.R. NO. L-60705, June 28, 1989

OVERSEAS BANK OF MANILA vs. CA, G.R. NO. L-60907, June 28, 1989

OBM contends that it had agreed to pay interest only up to the dates ofmaturity of the certificates of time deposit and that respondent Santos is notentitled to interest after the maturity dates had expired, unless the contractsare renewed. When respondent invested his money in time deposits with OBM

they entered into a contract of simple loan or mutuum, not a contract ofdeposit.

BPI vs. CA, G.R. NO. L-66826 August 19, 1988


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VINTOLA vs. INSULAR BANK OF ASIA AND AMERICA, G.R. NO. 73271,May 29, 1987

A trust receipt is considered as a security transaction intended to aid infinancing importers and retail dealers who do not have sufficient funds orresources to finance the importation or purchase of merchandise, and who maynot be able to acquire credit except through utilization, as collateral of themerchandise imported or purchased.

III. GUARANTY AND SURETYSHIP

COMMONWEALTH INSURANCE CORPORATION vs. CA, G.R. NO. 130886.January 29, 2004

Petitioners liability under the suretyship contract is different from its liabilityunder the law. There is no question that as a surety, petitioner should not bemade to pay more than its assumed obligation under the surety bonds.However, it is clear from the above-cited jurisprudence that petitioners liabilityfor the payment of interest is not by reason of the suretyship agreement itselfbut because of the delay in the payment of its obligation under the saidagreement.

THE MANILA INSURANCE CO INC vs SPOUSES AMURAO, G.R. NO. 179628,January 16, 2013

Petitioner imputes error on the part of the CA in treating petitioner as asolidary debtor instead of a solidary guarantor and argues that while a suretyis bound solidarily with the obligor, this does not make the surety a solidaryco-debtor. A suretys liability is joint and several and although the contract ofsuretyship is secondary to the principal contract, the suretys liability to the

obligee is nevertheless direct, primary, and absolute.

THE IMPERIAL INSURANCE, INC. vs. DE LOS ANGELES, G.R. NO. L-28030,January 18, 1982

Imperial Insurance, Inc. bound itself solidarily with the principal, the deceaseddefendant Reyes. In accordance with Article 2059, par. 2 of the Civil Code of


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shall only be liable for those costs incurred after he has been judiciallyrequired to pay.

IV. PLEDGE AND REAL MORTGAGE

CENTRAL BANK OF THE PHILIPPINES vs. CA, G.R. NO. L-45710 October3, 1985

The fact that when Sulpicio M. Tolentino executed a real estate mortgage, noconsideration was then in existence, as there was no debt yet because IslandSavings Bank had not made any release on the loan, does not make the realestate mortgage void for lack of consideration. It is not necessary that anyconsideration should pass at the time of the execution of the contract of realmortgage, it may either be a prior or subsequent matter, but when theconsideration is subsequent to the mortgage, the mortgage can take effect only

when the debt secured by it is created as a binding contract to pay.

CENTRAL BANK OF THE PHILIPPINES vs. CA, G.R. NO. L-45710, October3, 1985

Where the indebtedness actually owing to the holder of the mortgage is lessthan the sum named in the mortgage, the mortgage cannot be enforced formore than the actual sum due.

INTEG.R.ATED REALTY CORPORATION vs. PHILIPPINE NATIONAL BANK,

G.R. NO. L-60705, June 28, 1989

pals civil law (sales to damages)

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