CASE DIGESTS the bank, petitioner executed an act which was more

consistent with his exercise of ownership over it. This

1. Fule vs. CA, [G.R. No. 112212] - gains credence when it is borne in mind that he himself
2. Gaite vs. Fonacier, [G.R. No. L-11827]
3. Polytechnic University vs. CA, [G.R. No. 143513] had earlier delivered the Tanay property to Dr. Cruz by
4. Carrascos, Jr. vs. CA, [G.R. No. 123672] affixing his signature to the contract of sale. That after
5. Vda. De Ape vs. CA, [G.R. No. two hours he later claimed that the jewelry was not
133638] 6. Clarin vs. Rulona, [G.R. No. L-
30786] the one he intended in exchange for his Tanay
7. Province of Cebu vs. Heirs of Rufina Morales, [G.R. No. 170] property, could not sever the juridical tie that now
8. Hyatt Elevators vs. Cathedral Heights, [G.R. No. 173881] bound him and Dr. Cruz. The nature and value of the
9. Doles vs. Angeles, [G.R. No. 149353]
thing he had taken preclude its return after that
10. Montecillo vs. Reynes, [G.R. No.138018
supervening period within which anything could have
1. Fule v. CA happened, not excluding the alteration of the jewelry
or its being switched with an inferior kind.
Facts:
Gregorio Fule, a banker and a jeweller, offered to sell
Ownership over the parcel of land and the pair of
his parcel of land to Dr. Cruz in exchange for P40,000
emerald-cut diamond earrings had been transferred to
and a diamond earring owned by the latter. A deed of
Dr. Cruz and petitioner, respectively, upon the actual
absolute sale was prepared by Atty. Belarmino, and on
and constructive delivery thereof. Said contract of sale
the same day Fule went to the bank with Dichoso and
being absolute in nature, title passed to the vendee
Mendoza, and Dr. Cruz arrived shortly thereafter. Dr.
upon delivery of the thing sold since there was no
Cruz got the earrings from her safety deposit box and
stipulation in the contract that title to the property sold
handed it to Fule who, when asked if those were
has been reserved in the seller until full payment of
alright, nodded and took the earrings. Two hours after,
the price or that the vendor has the right to
Fule complained that the earrings were fake. He files a
unilaterally resolve the contract the moment the buyer
complaint to declare the sale null and void on the
fails to pay within a fixed period.
ground of fraud and deceit.
While it is true that the amount of P40,000.00 forming
part of the consideration was still payable to petitioner,
Issue:
its nonpayment by Dr. Cruz is not a sufficient cause to
Whether the sale should be nullified on the ground of
invalidate the contract or bar the transfer of ownership
fraud
and possession of the things exchanged considering
the fact that their contract is silent as to when it
Held:
becomes due and demandable.
A contract of sale is perfected at the moment there is a
meeting of the minds upon the thing which is the
object of the contract and upon the price. Being
consensual, a contract of sale has the force of law
2. Gaite v. Fonacier
between the contracting parties and they are expected
Facts:
to abide in good faith by their respective contractual
commitments. It is evident from the facts of the case Gaite was appointed by Fonacier as attorney-in-fact to
that there was a meeting of the minds between contract any party for the exploration and
petitioner and Dr. Cruz. As such, they are bound by the development of mining claims. Gaite executed a deed
contract unless there are reasons or circumstances of assignment in favor of a single proprietorship owned
that warrant its nullification. by him. For some reasons, Fonacier revoked the
agency, which was acceded to by Gaite, subject to
Contracts that are voidable or annullable, even though certain conditions, one of which being the transfer of
there may have been no damage to the contracting ores extracted from the mineral claims for P75,000, of
parties are: (1) those where one of the parties is which P10,000 has already been paid upon signing of
incapable of giving consent to a contract; and (2) the agreement and the balance to be paid from the
those where the consent is vitiated by mistake, first letter of credit for the first local sale of the iron
violence, intimidation, undue influence or fraud. The ores. To secure payment, Fonacier delivered a surety
records, however, are bare of any evidence agreement with Larap Mines and some of its
manifesting that private respondents employed such stockholders, and another one with Far Eastern
insidious words or machinations to entice petitioner Insurance. When the second surety agreement expired
into entering the contract of barter. It was in fact with no sale being made on the ores, Gaite demanded
petitioner who resorted to machinations to convince the P65,000 balance. Defendants contended that the
Dr. Cruz to exchange her jewelry for the Tanay payment was subject to the condition that the ores will
property. be sold.
Furthermore, petitioner was afforded the reasonable
opportunity required in Article 1584 of the Civil Code Issue:
within which to examine the jewelry as he in fact
accepted them when asked by Dr. Cruz if he was
satisfied with the same. By taking the jewelry outside
(1) Whether the sale is conditional or one with a period (2) The sale between the parties is a sale of a specific
mass or iron ore because no provision was made in
(2) Whether there were insufficient tons of ores
their contract for the measuring or weighing of the ore
sold in order to complete or perfect the sale, nor was
Held:
the price of P75,000,00 agreed upon by the parties
(1) The shipment or local sale of the iron ore is not a based upon any such measurement.(see Art. 1480,
condition precedent (or suspensive) to the payment of second par., New Civil Code). The subject matter of the
the balance of P65,000.00, but was only a suspensive sale is, therefore, a determinate object, the mass, and
period or term. What characterizes a conditional not the actual number of units or tons contained
obligation is the fact that its efficacy or obligatory force therein, so that all that was required of the seller Gaite
(as distinguished from its demandability) is was to deliver in good faith to his buyer all of the ore
subordinated to the happening of a future and found in the mass, notwithstanding that the quantity
uncertain event; so that if the suspensive condition delivered is less than the amount estimated by them.
does not take place, the parties would stand as if the
conditional obligation had never existed.

A contract of sale is normally commutative and

onerous: not only does each one of the parties assume 3. Polytechnic University of the Philippines vs
a correlative obligation (the seller to deliver and Court of Appeals and Firestone Ceramics
transfer ownership of the thing sold and the buyer to National Development Corporation vs Firestone
pay the price),but each party anticipates performance Ceramics Inc. [GR No. 143513 and 143590.
by the other from the very start. While in a sale the November 14, 2001]
obligation of one party can be lawfully subordinated to
an uncertain event, so that the other understands that Facts:
he assumes the risk of receiving nothing for what he Petitioner National Development Corp., a government
gives (as in the case of a sale of hopes or owned and controlled corporation, had in its disposal a
expectations, emptio spei), it is not in the usual course 10 hectares property. Sometime in May 1965, private
of business to do so; hence, the contingent character respondent Firestone Corporation manifested its desire
of the obligation must clearly appear. Nothing is found to lease a portion of it for ceramic manufacturing
in the record to evidence that Gaite desired or business. On August 24, 1965, both parties entered
assumed to run the risk of losing his right over the ore into a contract of lease for a term of 10 years
without getting paid for it, or that Fonacier understood renewable for another 10 years. Prior to the expiration
that Gaite assumed any such risk. This is proved by of the aforementioned contract, Firestone wrote NDC
the fact that Gaite insisted on a bond a to guarantee requesting for an extension of their lease agreement.
payment of the P65,000.00, an not only upon a bond It was renewed with an express grant to Firestone of
by Fonacier, the Larap Mines & Smelting Co., and the the first option to purchase the leased premise in the
company's stockholders, but also on one by a surety event that it was decided "to dispose and sell the
company; and the fact that appellants did put up such properties including the lot..."
bonds indicates that they admitted the definite Cognizant of the impending expiration of the leased
existence of their obligation to pay the balance of agreement, Firestone informed NDC through letters
P65,000.00. and calls that it was renewing its lease. No answer was
given. Firestone's predicament worsened when it
learned of NDC's supposed plans to dispose the subject
property in favor of petitioner Polytechnic University of
The appellant have forfeited the right court below that the Philippines. PUP referred to Memorandum Order
the appellants have forfeited the right to compel Gaite No.
to wait for the sale of the ore before receiving payment 214 issued by then President Aquino ordering the
of the balance of P65,000.00, because of their failure transfer of the whole NDC compound to the National
to renew the bond of the Far Eastern Surety Company Government. The order of conveyance would
or else replace it with an equivalent guarantee. The automatically result in the cancellation of NDC's total
expiration of the bonding company's undertaking on obligation in favor of the National Government.
December 8, 1955 substantially reduced the security Firestone instituted an action for specific performance
of the vendor's rights as creditor for the unpaid to compel NDC to sell the leased property in its favor.
P65,000.00, a security that Gaite considered essential
and upon which he had insisted when he executed the Issue:
deed of sale of the ore to Fonacier. 1. Whether or not there is a valid sale between NDC
and PUP.

Ruling:
A contract of sale, as defined in the Civil Code, is a Issue: Whether or not the the contract of sale between
contract where one of the parties obligates himself to NDC and PUP was valid?
transfer the ownership of and to deliver a determinate Held: No. Though all the elements of a valid sale were
thing to the other or others who shall pay therefore a attendant in the disposition and transfer of property
sum certain in money or its equivalent. It is therefore from NDC to PUP namely consent of the contracting
a general requisite for the existence of a valid and parties, price or consideration and determinate subject
enforceable contract of sale that it be mutually matter, the sale is invalid because it violated the right
obligatory, i.e., there should be a concurrence of the of first refusal of Firestone which was one of the
promise of the vendor to sell a determinate thing and conditions under their lease contract granted by NDC
the promise of the vendee to receive and pay for the
property so delivered and transferred. The Civil Code 4. G.R. No. 123672: Fernando Carrascoso, Jr. v.
provision is, in effect, a "catch-all" provision which Court of Appeals and Lauro Leviste December
effectively brings within its grasp a whole gamut of 14, 2005. 477 scra 666
transfers whereby ownership of a thing is ceded for a
consideration. Contract to Sell vs Contract of Sale
All three (3) essential elements of a valid sale, without In March 1972, El Dorado Plantation Inc, through
which there can be no sale, were attendant in the board member Lauro Leviste, executed a Deed of Sale
"disposition" and "transfer" of the property from NDC with Carrascoso. The subject of the sale was a 1825
to PUP - consent of the parties, determinate subject hectare of land. It was agreed that Carrascoso is to
matter, and consideration therefor. pay P1.8M. P290K would be paid by Carrascoso to PNB
Consent to the sale is obvious from the prefatory to settle the mortgage placed on the said land. P210k
clauses of Memorandum Order No. 214 which explicitly would be paid directly to Leviste. The balance of P1.3M
states the acquiescence of the parties to the sale of plus 10% interest would be paid over the next 3 years
the property. Furthermore, the cancellation of NDC's at P519k every 25 th of March. Leviste also assured
liabilities in favor of the National Government that there were no tenants hence the land does not fall
constituted the "consideration" for the sale. under the Land Reform Code. Leviste allowed
Carrascoso to mortgage the land which the latter did.
Carrascoso obtained a total of P1.07M as mortgage
and he used the same to pay the downpayment agreed
3. G.R. No. 143513 November 14, 2001 upon in the contract. Carrascoso defaulted from his
POLYTECHNIC UNIVERSITY OF THE PHILIPPINES, obligation which was supposed to be settled on March
petitioner,vs. COURT OF APPEALS and FIRESTONE 25, 1975. Leviste then sent him letters to make good
CERAMICS, INC., respondents.x-- his end of the contract otherwise he will be litigated. In
G.R. No. 143590 November 14, 2001NATIONAL 1977, Carrascoso executed a Buy and Sell Contract
DEVELOPMENT CORPORATION, petitioner,vs. with PLDT. The subject of the sale was the same land
FIRESTONE CERAMICS, INC., sold to Carrascoso by Leviste but it was only the 1000
respondents. BELLOSILLO, J sq m portion thereof. The land is to be sold at P3M.
Part of the terms and conditions agreed upon was that
Facts: National Development Corporation (NDC) and Carrascoso is to remove all tenants from the land
Firestone Ceramics Inc. Entered into a contract of lease within one year. He is also given a 6 month extension
covering the part of the property to be used as incase he’ll need one. Thereafter, PLDT will notify
manufacturing plant for ten years. Three and a half Carrascoso if whether or not PLDt will finalize the sale.
years later Firestone entered into a second contract of PLDT gained possession of the land. El Dorado filed a
lease covering the four-unit pre-fabricated reparation civil case against Carrascoso. PLDT intervened averring
steel warehouse. The parties then signed a similar that it was a buyer in good faith. The RTC ruled in
contract concerning six-unit pre-fabricated steel favor of Carrascoso. CA reversed the RTC ruling.
warehouse to be expired in two years. Prior to its ISSUE:
expiration, Firestone requested NDC for an extension of What is the nature of each contract?
their lease agreement which was granted by NDC HELD:
subject to several conditions such as in the event NDC The contract executed between El Dorado and
wanted to dispose it priority should be given to the Carrascoso was a contract of sale. It was perfected by
lessee. The lessor-lessee relationship between the two their meeting of the minds and was consummated by
was smooth until Firestone informed NDC that it was the delivery of the property toCarrascoso. However, El
extending its lease over the property. NDC sold the Dorado has the right to rescind the contract by reason
subject property to Polytechnic University of the of Carrascoso’s failure to perform his obligation. A
Philippines despite the notice of desire to purchase the contract of sale is a reciprocal obligation. The seller
property in the exercise of its contractual sent by obligates itself to transfer the owner shipof and deliver
Firestone a determinate thing, and the buyer obligates itself to
pay therefor a price certain in money or its equivalent.
The non-payment of the price by the buyer is a that for a time existed, and discharges the obligations
resolutory condition which extinguishes the transaction created there under. Such failure to pay the price in the
manner prescribed by the contract of sale entitles the HELD: No. Fortunato was a “no read no write” person.
unpaid seller to sue for collection or to rescind the It was incumbent for the the other party to prove that
contract. The contract between Carrascoso and PLDT is details of the contract was fully explained to Fortunato
a contract to sell. This is evidenced by the terms and before Fortunato signed the receipt.
conditions that they have agreed upon that after A contract of sale is a consensual contract, thus, it is
fulfillment of Carrascoso’s obligation PLDT has “to perfected by mere consent of the parties. It is born
notify Carrascoso of its decision whether or not to from the moment there is a meeting of minds upon the
finalize the sale.”Carrascoso also averred that there thing which is the object of the sale and upon the
was a breach on El Dorado’s part when it comes to price. Upon its perfection, the parties may reciprocally
warranty. Carrascoso claimed that there were tenants demand performance, that is, the vendee may compel
on the land and he spent about P2.9Mrelocating them. the transfer of the ownership and to deliver the object
The SC ruled that Carrascoso merely had a bare claim of the sale while the vendor may demand the vendee
without additional proof to support it to pay the thing sold. For there to be a perfected
Requisites of Express warranty in a Contract of contract of sale, however, the following elements must
Sale be present: consent, object, and price in money or its
(1) the express warranty must be an affirmation of equivalent.
fact or any promise by the seller relating tothe subject For consent to be valid, it must meet the following
matter of the sale; requisites:
(2) the natural tendency of such affirmation or promise (a) it should be intelligent, or with an exact notion of
is to induce the buyer to purchase thething; and the matter to which it refers;
3) the buyer purchases the thing relying on such (b) it should be free and
affirmation or promise thereon (c) it should be spontaneous. Intelligence in consent is
vitiated by error; freedom by violence, intimidation or
5. Vda. De Ape vs. CA, [G.R. No. 133638] undue influence; spontaneity by fraud.
Lumayno claimed that she explained fully the receipt
456 SCRA 193 – Civil Law – Law on Sales –
to Fortunato, but Flores’ testimony belies it. Flores said
Elements of a Contract of Sale – Consent Vitiated
there was another witness but the other was a maid
who also lacked education. Further, Flores himself was
FACTS:
not aware that the receipt was “to transfer the
Cleopas Ape died in 1950 and left a parcel of land (Lot
ownership of Fortunato’s land to her mom-in-law”. It
2319) to his 11 children. The children never formally
merely occurred to him to explain the details of the
divided the property amongst themselves except
receipt but he never did.
through hantal-hantal whereby each just occupied a
certain portion and developed each.
6. Clarin vs Rulona
On the other hand, the spouses Lumayno were
Civil Law – Law on Sales – Perfected Contract of
interested in the land so they started buying the
Sale
portion of land that each of the heirs occupied. On 11
Facts:
Apr 1973, one of the children, Fortunato, entered into
Olegario Clarin was the owner of a 10-hectare land in
a contract of sale with Lumayno. In exchange of his
Carmen, Bohol. The same was said to be his share
lot, Lumayno agreed to pay P5,000.00. She paid in
from the other co-owners. In 1959, he executed a
advance P30.00. Fortunato was given a receipt
Contract of Sale with Alberto Rulona. It was agreed
prepared by Lumayno’s son in law (Andres Flores).
that the purchase price would be P2,500.00.
Flores also acted as witness. Lumayno also executed
Downpayment would be P1,000.00 and the remaining
sales transactions with Fortunato’s siblings separately.
balance would be paid monthly at P100.00 per month.
In 1973, Lumayno compelled Fortunato to make the
Rulona paid the downpayment as well as the
the delivery to her of the registrable deed of sale over
1stinstallment but then later on Clarin returned the
Fortunato’s portion of the Lot No. 2319. Fortunato
P1,100.00 against Rulona’s will. Clarin said he could
assailed the validity of the contract of sale. He also
not convince the other co- owners about the selling of
invoked his right to redeem (as a co-owner) the
his share. Clarin also said there was no perfected sale
portions of land sold by his siblings to Lumayno.
between him and Rulona as he said that the sale was
Fortunato died during the pendency of the case.
subject to the condition that the other co-owners
should give their consent to the sale.
ISSUE: Whether or not there was a valid contract of
sale?
ISSUE:
Whether or not there was a perfected contract of sale.

HELD:
Yes there is. During trial there were 3 documents
shown. Exhibit A shows that upon payment of P800.00
by Rulona, a survey of the land was authorized. Exhibit paid to Clarin and that the 1stinstallment of P100.00
B shows that P200.00, part of the down payment was was also made. Though these exhibits are not the
Contract of Sale, they show that there was a contract was allowed to match the highest bid since she had a
of sale between Rulona and Clarin. preferential right to the lot as actual occupant thereof.
Construing Exhibits A and B together, it can be seen Morales thus paid the required deposit and partial
that the Clarin agreed to sell and Rulona agreed to buy payment for the lot. Later, the subject lot was returned
a definite object, that is, 10 hectares of land which is to petitioner and registered in its name. Morales died
part and parcel of Lot 20 PLD No. 4, owned in common and apart from the deposit and down payment, she
by the Clarin and his sisters although the boundaries of was not able to make any other payments on the
the 10 hectares would be delineated at a later date. balance of the purchase price for the lot. Now the
The parties also agreed on a definite price which is surviving heirs of Morales are asking for the formal
P2,500.00. Exhibit B further shows that Clarin has conveyance of subject lot, in accordance with the
received from Rulona as initial payment, the amount of award earlier made by the City of Cebu. They also
P800.00. Hence, it cannot be denied that there was a consigned with the court the amount representing the
perfected contract of sale between the parties and that balance of the purchase price which petitioner
such contract was already partially executed when the allegedly refused to accept.
petitioner received the initial payment of P800.00. The
latter’s acceptance of the payment clearly showed his
consent to the contract thereby precluding him from
rejecting its binding effect. Issue:
Further, Clarin’s letter to Rulona marked Exhibit C Can respondents still tender payment of the full
stated; purchase price? Yes
“My dear Mr. Rulona:
Replying to your letter of recent date, I deeply regret Held:
to inform you that my daughter, Alice, who is now in Article 1592 of the Civil Code pertinently provides that
Manila, could not be convinced by me to sell the land “In the sale of immovable property, even though it may
in question, that is, the ten (10) hectares of land have been stipulated that upon failure to pay the price
referred to in our tentative agreement. It is for this at the time agreed upon the rescission of the contract
reason that I hereby authorize the bearer, Mr. Paciano shall of right take place, the vendee may pay, even
Parmisano, to return to you in person the sum of One after the expiration of the period,
Thousand and One Hundred (P1,100.00) Pesos which as long as no demand for rescission of the contract has
you have paid in advance for the proposed sale of the been made upon him either judicially or by notarial act
land in question.” . After the demand, the court may not grant him a new
term. Thus, respondents could still tender payment of
The reasons given by the Clarin cannot operate against the full purchase price as no demand for rescission had
the validity of the contract in question. A contract is been made upon them, either judicially or through
valid even though one of the parties entered into it notarial act. While it is true that it took a long time for
against his better judgment. respondents to bring suit for specific performance and
consign the balance of the purchase price, it is equally
true that petitioner or its predecessor did not take any
7. Province of Cebu vs. Heirs of Rufina Morales, [G.R. No. 170 action to have the contract of sale rescinded. Article
Facts: 1592 allows the vendee to pay as long as no demand
Province of Cebu leased in favor of Rufina Morales a for rescission has been made.
210-square meter lot. Petitioner donated the lot
occupied by Morales to the City of Cebu. The city,
The consignation of the balance of the purchase price
then, sold the subject lot at public auction. The highest
before the trial court thus operated as full payment,
bidder for the said lot was Hever Bascon but Morales
which resulted in the extinguishment of respondents’
obligation under the contract of sale.