1. PUP VS CA 368 SCRA 691 (2001)

FACTS: In the early 1960s, NDC, a government-owned corporation, owned a 15-hectare property in Pureza, Sta. Mesa (TCT nos. 92885, 110301 and 145470). Sometime in May 1965, private respondent Firestone Ceramics Inc manifested its interest to lease a portion of the subject property for its ceramic manufacturing business. On August 24, 1965, NDC and Firestone entered into a contact of lease covering a portion of the property (2.90118 hectares) for a period of 10 years, renewable for another 10 years under the same terms and conditions.

In January 1969, Firestone entered into a second contract of lease with NDC over NDC’s 4-unit-fabricated reparation steel warehouse in Dalio, Davao. NDC agreed that firestone will lease another 2.6 hectare of its property.

In July 1964, both parties signed a similar contract concerning a 6 unit pre-fabricated steel warehouse to expire on December 2, 1978. Prior to this, Firestone requested for an extension of its lease agreement. Consequently, on December 1978, Firestone and NDC entered into a new agreement for a 10-year lease of the property, renewable for another 10 years, expressly granting Firestone the first option to purchase the leased premises in the event that NDC decided to dispose and sell its property.

In 1988, when their lease agreement was about to expire, Firestone informed NDC its desire to renew its lease over the property. NDC general manager promised immediate action but did not do anything. Rumors spread of NDC’s supposed plans to dispose of the subject property in favor of petitioner PUP. Firestone, then, served notice on NDC communicating its desire to purchase the property in exercise of its contractual right of first refusal.

Firestone, then, filed an action for specific performance to compel NDC to sell the leased property in its favor. Firestone claimed that it was it was pre-empting the impending sale of the NDC property to the petitioner in violation of its leasehold property rights over the 2.60 hectare property and the warehouses which were due to expire in 1999. Firestone likewise prayed to enjoin NDC from disposing of the property pending the settlement of the controversy.

In February 1989, PUP moved to intervene and asserted its interest in the subject property arguing that as a purchaser pendente lite, it is entitled to intervene in the proceedings. According to PUP, then Pres. Aquino signed memorandum order no. 214 ordered the transfer of the whole NDC compound in favor of PUP to extend its campus in order accommodate its growing student population. PUP alleged that the lease contract between

NDC and Firestone had long expired before the institution o the complaint and that the right of first refusal applied solely to the 6 unit pre-fabricated warehouse and not the lot upon which it stood.

ISSUE: DOES PETITIONER PUP HAVE A RIGHT TO PURCHASE THE SUBJECT PROPERTY

HELD: A contract of sale as defined in NCC, is a contract where one of the parties obligates himself to transfer the ownership of and to deliver a determinate thing to the other or others who shall pay therefore a sum certain in money or its equivalent. As such, a general requisite for the existence of a valid and enforceable contract is that it should be mutually obligatory, i.e. there should be a concurrence of the promise of the vendor to sell a determinate thing and the promise of a vendee to receive and pay for the property so delivered and transferred.

The conduct of petitioner PUP immediately after the transaction is in itself an admission that there was a sale of the NDC compound its favor. After the issuance of Memorandum order no. 214, PUP asserted its ownership of the property by posting notices within the compound advising residents and occupants to vacate the premises.

In the case at bar, the right of first refusal is an integral and indivisible part of the contract of lease and is inseparable from the whole contract. The consideration for the right is built into the reciprocal obligations of the parties. Thus, it is not correct for petitioners to insist that there was no consideration paid by Firestone to entitle it to the exercise of the right, inasmuch as the stipulation is part and parcel of the contract of lease making the consideration for the lease the same as that for the option.

It is a settled principle in civil law that when a lease contract contains a right of first refusal, the lessor is under a legal duty to the lessee not to sell to anybody at any price until after he has made an offer to sell to the latter at a certain price and the lessee has failed to accept it. The lessee has a right that the lessor's first offer shall be in his favor. The option in this case was incorporated in the contracts of lease by NDC for the benefit of FIRESTONE which, in view of the total amount of its investments in the property, wanted to be assured that it would be given the first opportunity to buy the property at a price for which it would be offered. Consistent with their agreement, it was then implicit for NDC to have first offered the leased premises of 2.60 hectares to FIRESTONE prior to the sale in favor of PUP. Only if FIRESTONE failed to exercise its right of first priority could NDC lawfully sell the property to petitioner PUP.

2. SANCHEZ VS MAPALAD REALTY CORPO 541 SCRA 397 (2007)

FACTS: Respondent Mapalad was the registered owner of 4 parcels of land located along Roxas Boulevard covered by TCT nos. S-81403, S-81404, S-81405 and S-81406 with a total area of 4, 038 square meters.

On March 21, 1986, shortly after the February 1986 EDSA Revolution, Jose Y. Campos executed an affidavit admitting that Mapalad was one of the companies he held in trust for Pres. Marcos. Campos turned over all assets, properties, records and documents pertaining to Mapalad to the new administration. On March 23, PCGG issued writs of sequestration for Mapalad and all its properties.

In August 1992, PCCG appointed Rolando Jose as VP/GM of Mapalad. He immediately conducted an inventory of the assets of the corporation and discovered that the TCTs of the subject property were missing. When he inquired about the whereabouts of the missing TCTs, he was informed that Mapalad’s former GM, Felicito Manalili took the said TCTs sometime in July 1992. Despite promises of returning the same, Manalili failed to surrender the said TCTs.

On November 1992, Felimon Oliquiano, president of Nordelak Development Corp, firled a notice of advserse claim over the subject properties. He claimed that Magsaysay, the former president and chairman of Mapalad executed a deed of sale for the 4 lots in favor of Nordelak for P20.19M.

Meanwhile, Josef informed the Register of Deeds of Paranaque not to entertain any transaction regarding the said TCTs on the account of that they were missing. In January 1993, Mapalad discovered, after verification with RD, that its titles to the 4 properties were cancelled as early as December 1992 and that new TCTs were issued to Nordelak over the subject properties on November 2, 1989, and purportedly signed by Magsaysay. Said TCTs indicated that the price was P7,268,400 instead of P20.19M annotated on the November 1992 adverse claim.

(Note: October 1978 – A. Magsaysay Inc, a corporation controlled by Magsaysay,acquired all shares of stock of Mapalad. In December 1982, A. Magsaysay Inc sold all its shares to Novo Properties Inc, thus completely terminating any all rights or interest he used to have over Mapalad.)

But when Josef conferred with Magsaysay whether he had indeed signed the deeds of absolute sale in November 1989, he denied having done the same.

Mapalad filed an action or annulment of sale and reconveyance, alleging that:

1. The deed of sale is falsified and forged2. Manalili conspired and confederated with other defendants to

defraud Mapalad by fabricating a fictitious and falsified deed of sale3. Two deeds of absolute sale were executed over the same property

on the same date November 2, 1989 but the two deeds differ in the amounts of consideration

On October 24, 1994, while the case was still pending before the RTC, Nordelak sold the subject properties for P50M to a certain Manuel Sanchez. RTC held in favor of Sanchez because Mapalad was unable to prove that the said deeds of sale were forged. CA reversed the decision, citing that when the said lots were sold to Nordelak, Magsaysay, who executed the deeds of sale on behalf of Mapalad, was no longer the president and chairman of the board since selling his shares in 1982 and that there was no consideration for the deed of sale as Mapalad did not receive any amount to the alleged transaction (no cleared checks)

ISSUE: IS THE QUESTIONED DEED OF SALE ENTERED INTO BY MAPALAD AND NORDELAK VALID AND SUBSISTING. DOES NORDELAK HAVE THE RIGHT TO SELL THE SUBJECT PROPERTY TO SANCHEZ LIS PENDENS?

HELD: A contract is defined as a juridical convention manifested in legal form, by virtue of which, one or more persons bind themselves in favor of another, or others, or reciprocally, to the fulfillment of a prestations to give, to do, or not to do. There can be no contract unless the following are present: 1. Consent of contracting parties; 2. Object certain which is the subject matter of the contract and; 3. Cause of the obligation which is established.

In a contract of sale, one of the contracting parties obligates himself to transfer ownership of and to deliver a determinate thing and the other party there for a price certain in money or its equivalent. The essential requisites of a valid contract of sale are:

1. Consent of the contracting parties by virtue of which the vendor obligate himself to transfer ownership and to deliver a determinate thing, and the vendee obligates himself to pay there for a price certain in money or its equivalent.

2. Object certain which is the subject matter of the contract. The object must be licit and at the same time determinate or, at least, capable of being made determinate without the necessity of a new or further agreement between the parties.

3. Cause of the obligation which is established. The cause as far as the vendor is concerned is the acquisition of the price certain in money or its equivalent, and the cause as far as the vendee is concerned is the acquisition of the thing which is the object of the contract.

Contracts of sale are perfected by mere consent, which is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract.

Consent may be given only by a person with the legal capacity to give consent.  In the case of juridical persons such as corporations like Mapalad, consent may only be granted through its officers who have been duly authorized by its board of directors.

In the present case, the elements of consent and cause are missing. The consent which was purportedly given by Magsaysay was proven to be false because at the time the deeds of sale was executed, he was no longer connected with Mapalad and therefore, had no capacity to give consent for and behalf of the corporation. Also, the deeds of sale seem highly suspicious because of the differing amounts annotated in the deeds of sale. Even if we were to assume that there no irregularities in the deeds of sale, there was no consideration or payment made by Nordelak as there were no funds infused into the corporation. Lack of consideration makes the sale fictitious and a fictitious sale is void ab initio.

Since Nordelak does not own the property, he had nothing to transfer to Sanchez (One cannot give what one does not have).

Notice of lis pendens is filed for the purpose of warning all persons that the title to certain property is in litigation and that if they purchase the same, they are in danger of being bound by an adverse judgment. The notice is, therefore, intended to be a warning to the whole world that one who buys the property does so at his own risk. By virtue of the notice of lis pendens annotated on the four TCTs in this case, petitioner had notice that the property he was intending to buy is under litigation.  He is, therefore, a transferee pendente lite who stands exactly in the shoes of the transferor and is bound by any judgment or decree which may be rendered for or against the transferor.

3. JOVAN LAND VS CA 268 SCRA 160 (1997)

FACTS: Petitioner Jovan Land Inc is a corporation engaged in the real estate business with Joseph Sy as the president and chairman of the board. Private respondent Eugenio Quesada is the owner of the subject property in Sta. Cruz Manial covered by TCT no. 77796. When petitioner learned from Mendoza that Quesada was selling his property, Jovan Land, through Sy, made an offer for P10.25M which was not accepted by Conrado Quesada, GM of private respondent. Sy, then, wrote a second offer for the same price but inclusive of an undertaking to pay documentary stamp tax, transfer tax, registration fees and notarial charges which was rejected by again by Quesada. In August 1989, Sy sent

a 3rd offer for P12M with a check for P1M as earnest money and annotated in the offer was the phrase “received original, 9-4-89” and beside which appears the signature of Conrado Quesada.

Petitioner claims that said annotation is the basis that there already exists a valid, perfected sale of the subject property. Jovan Land, then, filed an action for specific performance and collection of sum of money with damages. Trial court dismissed the complaint for lack of cause of acton as there was no record that a contract of was ever perfected.

ISSUE: WAS THERE A PERFECTED SALE BETWEEN JOVAN LAND AND QUESADA

HELD: As held in Ang Yu Asuncion vs. CA, the SC held that a contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service...A contract undergoes various stages that include its negotiation or preparation, its perfection and, finally, its consummation. Negotiation covers the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is concluded...The perfection of the contract takes place upon the concurrence of the essential elements thereof."

it is a fundamental principle that before contract of sale can be valid, the following elements must be present: (a) consent or meeting of the minds; (b) determinate subject matter; (c) price certain in money or its equivalent. Until the contract of sale is perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation between the parties.

Such an annotation by Conrado Quesada amounts to neither a written nor an implied acceptance of the offer of Joseph Sy. It is merely a memorandum of the receipt by the former of the latter's offer. The requisites of a valid contract of sale are lacking in said receipt and therefore the "sale" is neither valid nor enforceable.

It is undeniable that no written agreement was reached between petitioner and private respondent with regard to the sale of the realty. Hence, the alleged transaction is unenforceable as the requirements under the Statute of Frauds have not been complied with. Under the said provision, an agreement for the sale of real property or of an interest therein, to be enforceable, must be in writing and subscribed by the party charged or by an agent thereof.

4. LAO VS CA G.R. NO 115307 (JULY 8, 1997)

FACTS: Private respondent Better Homes Realty and Housing Corp filed a complaint for unlawful detainer citing that it is the owner of the subject property in N. Domingo, Quezon City with TCT no. 22184; that petitioner Lao occupied the property without rent but on pure liberality with the understanding that he would vacate upon demand. Petitioner Lao claimed that he is the true owner of the property; that he purchased the same from N. Domingo Realty and Development Corp, but the agreement was actually a loan secured by mortgage.

MTC of QC held in favor of Better Homes Realty and ordered Lao to vacate the premises. RTC reversed the decision citing that by a deed of sale, Better Homes Realty is now the registered owner under Transfer Certificate of Title No. 316634 of the Registry of Deeds of Quezon City, but in truth Lao is the beneficial owner of the property because the real

transaction over the subject property was not a sale but a loan secured by a mortgage thereon.

ISSUE: HAD PRIVATE RESPONDENT BETTER HOMES REALTY ACQUIRED OWNERSHIP OVER THE PROPERTY IN QUESTION

HELD: Private respondent Better Homes Realty anchored its right in the ejectment suit on a contract of sale in which the petitioner Lao (through their family corporation) transferred the title of the property in question. Petitioner Lao contends, however, that their transaction was an absolute sale but an equitable mortgage.

To determine the nature of a contract, the court looks at the intent of the parties and not at the nomenclature used to describe it. Pivotal to deciding this issue is the true aim and purpose of the contracting parties as shown by the terminology used in the covenant, as well as "by their conduct, words, actions and deeds prior to, during and immediately after executing the agreement." In this regard, parol evidence becomes admissible to prove the true intent and agreement of the parties which the Court will enforce even if the title of the property in question has already been registered and a new transfer certificate of title issued in the name of the transferee.

The law enumerates when a contract may be presumed to be an equitable mortgage: "(1) When the price of a sale with right to repurchase is unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold; (6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation…" The foregoing presumption applies also to a "contract purporting to be an absolute sale."

The agreement between the private respondent and N. Domingo Realty & Housing Corporation, as represented by petitioner, manifestly one of equitable mortgage. First, possession of the property in the controversy remained with Petitioner Manuel Lao who was the beneficial owner of the property, before, during and after the alleged sale. It is settled that a "pacto de retro sale should be treated as a mortgage where the (property) sold never left the possession of the vendors." Second, the option given to Manuel Lao to purchase the property in controversy had been extended twice through documents executed by Mr. Tan Bun Uy, President and Chairman of the Board of Better Homes Realty & Housing Corporation. The wording of the first extension is a refreshing revelation that indeed the

parties really intended to be bound by a loan with mortgage, not by a pacto de retro. It reads, "On June 10, 1988, this option is extended for another sixty days to expired (sic) on Aug. 11, 1988. The purchase price is increased to P137,000.00. Since Mr. Lao borrow (sic) P20,000.00 from me." These extensions clearly represent the extension of time to pay the loan given to Manuel Lao upon his failure to pay said loan on its maturity. Mr. Lao was even granted an additional loan of P20,000.00 as evidenced by the above-quoted document. Third, unquestionably, Manuel Lao, and his brother were in such "dire need of money" that they mortgaged their townhouse units registered under the name of N. Domingo Realty Corporation, the family corporation put up by their parents, to Private Respondent Better Homes Realty & Housing Corporation. In retrospect, it is easy to blame Petitioner Manuel Lao for not demanding a reformation of the contract to reflect the true intent of the parties. But this seeming inaction is sufficiently explained by the Lao brothers' desperate need for money, compelling them to sign the document purporting to be a sale after they were told that the same was just for "formality." Based on the conduct of the petitioner and private respondent and even the terminology of the second option to purchase, we rule that the intent and agreement between them was undoubtedly one of equitable mortgage and not of sale.

5. BALATBAT VS CA G.R. NO. 109410 (AUGUST 29, 1996)

FACTS: Spouses Aurelio Roque and Maria Mesina had 4 children. In 1966, Maria Mesina, wife of Aurelio Roque died and left a parcel of land with TCT 51330. After proving that said property was purchased during their marriage, the said lot was portioned into the following: (the deceased left no debt)Aurelio Roque = 6/10 shareSeverina Roque = 1/10 shareOsmundo Roque = 1/10 shareFeliciano Roque =1/10 shareCorazon Roque = 1/10 share

In April 1980, Aurelio sold his 6/10 share to spouses Aurora Tuazon-Repuyan and Jose Repuyan as evidenced by a deed of absolute sale for the amount of P50,000. A down payment of P5,000 was made with the remaining P45,000 to be paid after the partition. However, on August 20, 1980, Aurelio filed a complaint for rescission on the ground that spouses Repuyan failed to pay the balance of the purchase price.

Balatbat, one of the children, said that she bought the property for value and in good faith. Repuyan was the first one to annotate adverse claim over the property in the Registry of Deeds.

ISSUES: WAS THE SALE TO REPUYAN MERELY EXECUTORY AND DOES NOT CONFER ANY RIGHT?

HELD: No. The sale was consummated, hence, valid and enforceable. In April 1980, Aurelio filed for rescission of the sale between him and Repuyan but the court denied his petition, it was not appealed so it became final and executory. Roque cannot demand payment of the balance unless and until the property has been subdivided and titled in the name of private respondents.

With respect to the non-delivery of the possession of the subject property to the private respondent, suffice it to say that ownership of the thing sold is acquired only from the time of delivery thereof, either actual or constructive. Article 1498 of the Civil Code provides that — when the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot be inferred. The execution of the public instrument, without actual delivery of the thing, transfers the ownership from the vendor to the vendee, who may thereafter exercise the rights of an owner over the same. In the instant case, vendor Roque delivered the owner's certificate of title to Repuyan. It is not necessary that vendee be physically present at every square inch of the land bought by him, possession of the public instrument of the land is sufficient to accord him the rights of ownership. Thus, delivery of a parcel of land may be done by placing the vendee in control and possession of the land (real) or by embodying the sale in a public instrument (constructive). The provision of Article 1358 on the necessity of a public document is only for convenience, not for validity or enforceability. It is not a requirement for the validity of a contract of sale of a parcel of land that this be embodied in a public instrument

A contract of sale being consensual, it is perfected by the mere consent of the parties. Delivery of the thing bought or payment of the price is not necessary for the perfection of the contract; and failure of the vendee to pay the price after the execution of the contract does not make the sale null and void for lack of consideration but results at most in default on the part of the vendee, for which the vendor may exercise his legal remedies.

Double Sale: Yes there was double sale. But whom shall the right over the property pertain to. Article 1544 provides an answer for this. The ownership shall vests in the person acquiring it who in good faith first recorded it in the Registry of Property. It cannot also be said that Balatbat

was in good faith, failing to investigate on the annotation of adverse claim by the Repuyan, which is constructive knowledge already.

6. AGASEN VS CA G.R. NO. 11508 (FEBRUARY 15, 2000)

FACTS: Private respondent Petra Bilog, assisted by her husband Felipe Bilog, filed a complaint for Recovery of Possession and Ownership against petitioners Alejandro Agasen and Fortunata Calonge-Agasen with the Regional Trial Court of Agoo, La Union involving an 8,474 square meters parcel of land registered in her name under TCTNo. T-16109. In their Answer, petitioners Alejandro Agasen and Fortunata Calonge-Agasen asserted that the subject land used to form part of Lot No. 2192, a 42,372 square meters parcel of land owned in common by the five Bilog siblings, private respondent Petra Bilog being one of them. Petitioners claimed that they became the owners of the portion of the subject land which belonged to private respondent as her share therein, by virtue of: (1) the sale in their favor of 1,785 square meters thereof by Leonora Calonge, sister of Fortunata Calonge-Agasen, and (2) the sale in their favor by private respondent of the remaining 6,717.50 square meters on June 24, 1968, by virtue of a notarized Partition with Sale. Petitioners also affirmed that they had been in possession of the subject land since the time of the above-mentioned sale transactions. By way of counterclaim, petitioners charged private respondent with having fraudulently caused title to the subject land to be issued in her name, following the subdivision of the original land between her and her co-heirs/owners, in violation of petitioners' rights over the subject land. Thus, petitioners prayed for the annulment of

title in private respondent's name and for the dismissal of the complaint. The trial court rendered judgment in favor of petitioners. On appeal, the Court of Appeals reversed the decision.

ISSUE: WAS THERE A SALE PERFECTED BETWEEN THE TWO PARTIES

HELD: The memorandum of sale appearing in Exhibit "3" is sufficient to prove the sale between petitioner Fortunata Calonge-Agasen and her late sister, the previous vendee of the land subject of the Deed of Absolute Sale from private respondent.

After all, contracts are obligatory in whatever form they may have been entered into provided all essential requisites are present. The provision of Article 1358 on the necessity of a public document is only for convenience, not for validity or enforceability. It is not a requirement for the validity of a contract of sale of a parcel of land that this be embodied in a public instrument.

It was likewise error for CA to rule that the transactions were "dented by the failure to register/annotate the same with the Register of Deeds" and that due to such failure, the documents "did not automatically bind the subject property." First, one of the subject documents, the Deed of Absolute Sale, was in fact registered. Second, as elucidated in Fule vs. CA — "The Civil Code provides that contracts are perfected by mere consent. From this moment, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. 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 between the contracting parties and they are expected to abide in good faith by their respective contractual commitments. Article 1358 of the Civil Code which requires the embodiment of certain contracts in a public instrument, is only for convenience, and registration of the instrument only adversely affects third parties. Formal requirements are, therefore, for the benefit of third parties. Non-compliance therewith does not adversely affect the validity of the contract nor the contractual rights and obligations of the parties thereunder."

7.CITY OF CEBU VS HEIRS OF RUBI G.R. 128579 (1999)

FACTS: On March 4, 1965 the City council of Cebu enacted Ordinance No. 522 authorizing the City Mayor to sell at public auction the 210 province-owned lots donated to petitioner, among which was Lot 1141. After the bidding, Lot 1141-D was awarded to Candido Rubi and on January 30, 1976, he paid the amount of P4,500.00 as bidder's cash bond. Unfortunately, Candido failed to pay the entire amount of the total purchase price of the questioned lot. On May 17, 1989, the heirs of the Candido filed a complaint for specific performance in the lower court and tendered the amount of P103,818.00 to the treasurer of Cebu City as complete payment to the lot in question. On January 17, 1991, the court a quo rendered a decision dismissing the complaint and declaring the petitioner to have been released of its obligation to sell the property to the private respondents under the terms and conditions of the award in 1976. On appeal, the CA reversed the ruling of the court a quo that there was a perfected contract of sale but Candido was not able to make payments thereunder due to circumstances beyond his control. Such failure does not, by itself, bar the transfer of ownership or possession, much less, dissolve the contract of sale. CA added that the fact that the obligation was already substantially performed in good faith militates

against the unilateral extinguishment or rescission claimed by the City of Cebu.

The Supreme Court denied the petition and affirmed the decision rendered by the CA.

ISSUE: WAS THERE A PERFECTED SALE BETWEEN THE PARTIES?

HELD: We agree with the CA that there was a perfected contract of sale between the parties. A contract of sale is a consensual contract and 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. From that moment, the parties may reciprocally demand performance subject to the provisions of the law governing the form of contracts. The elements of a valid contract of sale under Article 1458 of the Civil Code are (1) consent or meeting of the minds; (2) determinate subject matter; and (3) price certain in money or its equivalent. All three elements are present in the transaction between the City of Cebu and Candido Rubi. On February 3, 1976, Candido Rubi wrote the City Mayor that he was one of the bidders of Lot 1141-D in a bidding held on January 30, 1976 and that he was exercising his option of equaling the highest bid price of P10.00 per square meter for the area containing 6,423 square meters and P8.00 per square meter for the area containing 5,511 square meters. The acceptance by the city was conveyed in the letter of Mayor Eulogio Borres informing Rubi of the resolution of the Appraisal Committee appraising Lot 1141-D at P10.00 for the area of 6,423 square meters and P8.00 for the rest of the area consisting of 5,511 square meters and advising him to pay for the lot within 15 days from receipt thereof. There was a perfected agreement between the City of Cebu and Rubi whereby the City obligated itself to transfer the ownership of and deliver Lot 1141-D and Rubi to pay the price. The effect of an unqualified acceptance of the offer or proposal of the bidder is to perfect a contract, upon notice of the award to the bidder. An agreement presupposes a meeting of the minds and when that point is reached in the negotiations between the parties intending to enter into a contract, the purported contract is deemed perfected and none of them may thereafter disengage himself therefrom without being liable to the other in an action for specific performance.

8. LONDRES VS CA 394 SCRA 133 (2002)

FACTS: Paulina Arcenas owned two parcels of land (lots 1320 and 1333) in Capiz. After her death, ownership of the said lots passed to her daughter, Filomena Vidal. The surviving children of Filomena: Sonia Fuentes Londres, Armando Fuentes, Chi-chita Fuentes Quintia, Roberto Fuentes, Leopoldo Fuentes and Marilou Fuentes Esplana now claim ownership over subject lots.

On the other hand, respondents Consolacion Alovera and Elena Alovera Santos anchor averred that said lots were sold to them by Filomena through a deed of absolute sale on April 24, 1959. Said lots were sold in favor of Consolacion and her spouse. Elena is the daughter of Consolacion.

In March 1989 petitioner Londres et al filed a complaint seeking nullify the deed of absolute sale and to recover just compensation from DPWH and DOTC. Petitioners alleged as the surviving heirs of Filomena, they are the owners of said lots and that the same were never sold to spouses Alovera. Petitioners impugn the validity of the absolute sale because it was tampered and that it was only recently that they learned of the claim of the Aloveras when Consolacion filed a petition for the judicial reconstitution of the original certificates of title for the said lots with the Capiz Cadastre. Upon further inquiry, Londres et al discovered that there exists a notarized absolute of sale executed on April 24, 1959 registered only on September 22, 1982 in RD.

Respondents maintained that Julian Alovera purchased the lots from Filomena in good faith and for valid consideration. They also alleged that Julian was placed in a disadvantageous position since he was deaf and dumb at the time of the execution deed of absolute sale. Julian had to rely on the representation of other persons in his business transactions. But after the sale, spouse Aloveratook possession of the lands and are still in possession of the subject property until present.

Trial court rendered in favor of spouses Alovera and declared the absolute deed of sale valid. CA affirmed the same.

ISSUE: Was there a perfected sale between Filomena and the Aloveras

HELD: A sale of real property is a contract transferring dominion and other real rights in the thing sold. Proof of the conveyance of ownership is the fact that from the time of the sale, or after more than 30 years, private respondents have been in possession of Lots 1320 and 1333. Petitioners on the other hand have never been in possession of the two lots.

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 between the contracting parties and they are expected to abide in good faith with their respective contractual commitments. Article 1358 of the Civil Code, which requires certain contracts to be embodied in a public instrument, is only for convenience, and registration of the instrument is needed only to adversely affect third parties. Formal requirements are, therefore, for the purpose of binding or informing third parties. Non-compliance with formal requirements does not adversely affect the validity of the contract or the contractual rights and obligations of the parties.

9. GAITE VS FONACIER 2 SCRA 830 (1961)

FACTS: Isabelo Fonacier was the owner and/ or holder, either by himself or in a representative capacity, of 11 iron lode mineral claims, known as the Dawahan Group, situated in the municipality of Jose Panganiban, province of Camarines Norte. By a "Deed of Assignment" dated September 29, 1952, Fonacier constituted and appointed Fernando A. Gaite as his true and lawful attorney-in-fact to enter into a contract with any individual or juridical person for the exploration and development of the mining claims on a royalty basis of not less than P0.50 per ton of ore that might be extracted therefrom.

On March 19, 1954, Gaite in turn executed a general assignment conveying the development and exploitation of said mining claims unto the Larap Iron Mines, a single proprietorship owned solely by and belonging to him, on the same royalty basis. Gaite embarked upon the development and exploitation of the mining claims in question, opening and paving roads within and outside their boundaries, making other improvements and installing facilities thereing for use in the development of the mines, and extracted what he claimed and estimated to be approximately 24,000 metric tons of iron ore.

For some reason or another, Isabelo Fonacier decided to revoke the authority granted by him to Gaite to exploit and develop the mining claims in question, and Gaite assented subject to certain conditions on December 8, 1954, a document entitled "Revocation of Power of Attorney and Contract" was executed wherein Gaite transferred to Fonacier, for the consideration of P20,000, plus 10% of the royalties that Fonacier would receive from the mining claims all his rights and interests on all the roads, improvements, and facilities in or outside said claims the right to use the

business name "Larap Iron Mines" and its goodwill all the records and documents relative to the mines

Gaite transferred to Fonacier all his rights and interests over the "24,000 tons of iron ore, more or less" that had been already extracted from the mineral claims, in consideration of the sum of P75,000, P10,000, of which was paid upon the signing of the agreement, and the balance of P65,000 will be paid from and out of the first letter of credit covering the first shipment of iron ores and or the first amount derived from the local sale of iron ore made by the Larap Mines & Smelting Co, Inc., its assigns, administrators, or successors in interests.

To secure the payment of the balance of P65,000.00, Fonacier executed a surety bond in favor of Gaite dated December 8, 1954 with himself (Fonacier) as principal and the Larap Mines and Smelting Co. and its stockholders George Krakower, Segundina Vivas, Pacifico Escandor, Francisco Dante, and Fernando Ty as sureties.Gaite testified when this bond was presented to him by Fonacier together with the "Revocation of Power of Attorney and Contract", he refused to sign unless another bond underwritten by a bonding company was put up by defendants to secure the payment of the P65,000 balance of the price of the iron ore in the stockpiles in the mining claims. Hence, a second bond, also dated December 8, 1954 was executed by the same parties to the first bond with the Far Eastern Surety and Insurance Co as additional surety, but it provided that the liability of the surety company would attach only when there had been an actual sale of iron ore by the Larap Mines & Smelting Co. for an amount of not less than P65,000, and that, furthermore, the liability of said surety company would automatically expire on December 8, 1955.

Upon signing, Fonacier entered into a "Contract of Mining Operation", ceding, transferring, and conveying unto the Larap Mines and Smelting Co., Inc. the right to develop, exploit, and explore the mining claims in question, together with the improvements therein and the use of the name "Larap Iron Mines" and its goodwill, in consideration of certain royalties and transferred the complete title to the approximately 24,000 tons of iron ore which he acquired from Gaite, to the Larap Mines & Smelting Co., in consideration for the signing by the company and its stockholders of the surety bonds delivered by Fonacier to Gaite

Up to December 8, 1955, when the bond expired WRT the Far Eastern Surety and Insurance Company, no sale of the approximately 24,000 tons of iron ore had been made by the Larap Mines & Smelting Co., Inc., nor had the P65,000 balance of the price of said ore been paid to Gaite by Fonacier and his sureties

Gaite demanded from Fonacier and his sureties payment of said amount, on the theory that they had lost every right to make use of the period given them when their bond automatically expired and when Fonacier and

his sureties failed to pay as demanded by Gaite, the latter filed the present complaint against them in the Court of First Instance of Manila for the payment of the P65,000 balance of the price of the ore, consequential damages, and attorney's fees.

All the defendants except Francisco Dante set up the uniform defense that the obligation sued upon by Gaite was subject to a condition that the amount would be payable out of the first letter of credit, covering the first shipment of iron ore and/or the first amount derived from the local sale of the iron ore by the Larap Mines & Smelting Co., Inc. and that up to the time of the filing of the complaint, no sale of the iron ore had been made, hence the condition had not yet been fulfilled and that consequently, the obligation was not yet due and demandable.

Fonacier also contended that only 7,573 tons of the estimated 24,000 tons of iron ore sold to him by Gaite was actually delivered, and counterclaimed for more than P200,000 damages.

Lower court held that the obligation of defendants to pay plaintiff the P65,000 balance of the price of the approximately 24,000 tons of iron ore was one with a term: i.e., that it would be paid upon the sale of sufficient iron ore by defendants, such sale to be effected within one year or before December 8, 1955; that the giving of security was a condition precedent to Gaite's giving of credit to defendants; and that as the latter failed to put up a good and sufficient security in lieu of the Far Eastern Surety bond which expired on December 8, 1955, the obligation became due and demandable under Article 1198 of the New Civil Code

Lower court found that plaintiff Gaite did have approximately 24,000 tons of the iron ore at the mining claims in question at the time of the execution of the contract. Judgment of LC was rendered in favor of plaintiff Gaite ordering defendants to pay him, jointly and severally, P65,000 with interest at 6% per annum from December 9, 1955 until fullpayment, plus costs.

ISSUE: Assuming that the said obligation is an obligation with a term, do the defendants have a right to insist that Gaite should wait for the sale or shipment of the ore before receiving payment

HELD: A contract of sale is normally commutative and onerous: not only does each one of the parties assume a correlative obligation (the seller to deliver and transfer ownership of the thing sold and the buyer to pay the price),but each party anticipates performance by the other from the very start. While in a sale the obligation of one party can be lawfully subordinated to an uncertain event, so that the other understands that he assumes the risk of receiving nothing for what he gives (as in the case of a sale of hopes or expectations, emptio spei), it is not in the usual course of business to do so; hence, the contingent

character of the obligation must clearly appear. Nothing is found in the record to evidence that Gaite desired or assumed to run the risk of losing his right over the ore without getting paid for it, or that Fonacier understood that Gaite assumed any such risk. This is proved by the fact that Gaite insisted on a bond a to guarantee payment of the P65,000.00, an not only upon a bond by Fonacier, the Larap Mines & Smelting Co., and the company’s stockholders, but also on one by a surety company; and the fact that appellants did put up such bonds indicates that they admitted the definite existence of their obligation to pay the balance of P65,000.00.

Assuming that there could be doubt whether by the wording of the contract the parties indented a suspensive condition or a suspensive period (dies ad quem) for the payment of the P65,000.00, the rules of interpretation would incline the scales in favor of “the greater reciprocity of interests”, since sale is essentially onerous. The Civil Code of the Philippines, Article 1378, paragraph 1, in fine, provides: If the contract is onerous, the doubt shall be settled in favor of the greatest reciprocity of interests. There can be no question that greater reciprocity obtains if the buyer’ obligation is deemed to be actually existing, with only its maturity (due date) postponed or deferred, that if such obligation were viewed as non-existent or not binding until the ore was sold.

10. SPOUSES BUENAVENTURA VS CA G.R. 126376 (2003)

FACTS: Respondent spouses Leonardo Joaquin and Feliciana Landrito are the parents of petitioners Consolacion, Nora, Emma and Natividad as well as of respondents Fidel, Tomas, Artemio, Clarita, Felicitas, Fe, and Gavino, all surnamed Joaquin. The married Joaquin children are joined in this action by their respective spouses.

Sought to be declared null and void ab initio are six deeds of sale of real property executed by respondent parents in favor of their respondent children and the of nullity of the said deeds of sale and certificates of title, petitioners, in their complaint, aver that the deeds of sale are simulated as they are, are null and void ab initio because

1. there was no actual valid consideration for the deeds of sale over the properties in litis;

2. assuming that there was consideration in the sums reflected in the questioned deeds, the properties are more than three-fold times more valuable than the measly sums appearing therein;

3. the deeds of sale do not reflect and express the true intent of the parties (vendors and vendees); and

4. the purported sale of the properties in litis was the result of a deliberate conspiracy designed to unjustly deprive the rest of the compulsory heirs (petitioner children) of their legitime.

Respondents aver that 1. Petitioner siblings do not have a cause of action against them as

well as the requisite standing and interest to assail their titles over the properties in litis;

2. The sales were with sufficient considerations and made by respondent parents voluntarily, in good faith, and with full knowledge of the Consequences of their deeds of sale; and

3. The certificates of title were issued with sufficient factual and legal basis.

The trial court ruled in favor of the respondents and dismissed the complaint. The Court of Appeals affirmed the decision of the trial court.

Petitioners assert that their respondent siblings did not actually pay the prices stated in the Deeds of sale to their respondent father. Thus, petitioners ask the court to declare the Deeds of Sale void. Petitioners also

ask that assuming that there is consideration, the same is grossly inadequate as to invalidate the Deeds of Sale.

ISSUE: WAS THERE A PERFECTED CONTRACT OF SALE EVEN IF THERE WAS NO PAYMENT OF PRICE

HELD: A contract of sale is not a real contract, but a consensual contract. As a consensual contract, a contract of sale becomes a binding and valid contract upon the meeting of the minds as to price. If there is a meeting of the minds of the parties as to the price, the contract of sale is valid, despite the manner of payment, or even the breach of that manner of payment. If the real price is not stated in the contract, then the contract of sale is valid but subject to reformation. If there is no meeting of the minds of the parties as to the price, because the price stipulated in the contract is simulated, then the contract is void. Art 1471 NCC states that if the price in a contract of sale is simulated, the sale is void. It is not the act of payment of price that determines the validity of a contract of sale. Payment of the price has nothing to do with the perfection of the contract. Payment of the price goes into the performance of the contract. Failure to pay the consideration is different from lack of consideration. The former results in a right to demand the fulfillment or cancellation of the obligation under an existing valid contract while the latter prevents the existence of a valid contract.

Petitioners failed to show that the prices in the Deeds of Sale were absolutely simulated. To prove simulation, petitioners presented Emma Joaquin Valdoz's testimony stating that their father, respondent Leonardo Joaquin, told her that he would transfer a lot to her through a deed of sale without need for her payment of the purchase price. The trial court did not find the allegation of absolute simulation of price credible. Petitioners' failure to prove absolute simulation of price is magnified by their lack of knowledge of their respondent siblings' financial capacity to buy the questioned lots. On the other hand, the Deeds of Sale which petitioners presented as evidence plainly showed the cost of each lot sold. Not only did respondents' minds meet as to the purchase price, but the real price was also stated in the Deeds of Sale. As of the filing of the complaint, respondent siblings have also fully paid the price to their respondent father.

Petitioners failed to prove any of the instances mentioned in Art 1355 and 1470 NCC which would invalidate, or even affect, the Deeds of Sale. Indeed, there is no requirement that the price be equal to the exact value of the subject matter of sale. All the respondents believed that they received the commutative value of what they gave. Moreover, the factual

findings of the appellate court are conclusive on the parties and carry greater weight when they coincide with the factual findings of the trial court.