Sales

Cases for July 21, 2016 (Read and digest)

1. PCI Leasing and Finance, Inc. vs. Giraffe-X Creative Imaging, Inc.,
527 SCRA 405 (2007)
2. Pagtalunan vs. Dela Cruz Vda. de Manzano, 533 SCRA 242 (2007)
3. Escueta vs. Lim, 512 SCRA 411 (2007)
4. Almocera vs. Ong (February 18, 2008)
5. Villadar, Jr. vs. Zabala, 545 SCRA 325 (2008)
6. Beatingo vs. Gasis, 642 SCRA 539 (2011)
7. Felipe vs. Aldon, G.R. No. 60174, Feb. 16, 1983
8. Castillo vs. Castillo, L-18238, Jan. 22, 1980
9. Godinez vs. Fong, 120 SCRA 223 (1983)
10.
Fabillo vs. IAC, G.R. No. 68838, Mar. 11, 1991
Felipe vs. Aldon
FACTS:
Maximo Aldon married Gimena Almosara in 1936. They bought several pieces of land sometime
between 1948 and 1950. In 1951, Gimena Almosara sold the lots to the spouses Eduardo Felipe
and Hermogena V. Felipe. The sale was made without the consent of her husband. On April 26,
1976, the heirs of Maximo Aldon, namely his widow Gimena and their children Sofia and
Salvador Aldon filed a complaint that alleged that the plaintiffs were the owners of Lots 1370,
1371 and 1415; that they had orally mortgaged the same to the defendants; and an offer to
redeem the mortgage had been refused so they filed the complaint in order to recover the three
parcels of land. The trial court sustained the claim of the defendants and rendered judgment in
favor of Spouses Felipe as lawful owners. The Court of Appeals set aside the decision of CFI
declaring the parcels were purchased by plaintiff Gimena Almosara and her late husband
Maximo Aldon (the lots having been purchased during the existence of the marriage, the same
are presumed conjugal) and inferentially, by force of law, could not, be disposed of by a wife
without her husbands consent. Hence this petition.
ISSUE: Whether or not the sale made by Gimena is a defective contract.
HELD: It is a voidable contract. According to Art. 1390 of the Civil Code, among the voidable
contracts are [T]hose where one of the parties is incapable of giving consent to the contract.
(Par. 1.) In the instant case-Gimena had no capacity to give consent to the contract of sale. The
capacity to give consent belonged not even to the husband alone but to both spouses.
The case of Sofia and Salvador Aldon is different. After the death of Maximo they acquired the
right to question the defective contract insofar as it deprived them of their hereditary rights in
their fathers share in the lands. The fathers share is one-half (1/2) of the lands and their share is
two-thirds (2/3) thereof, one-third (1/3) pertaining to the widow.
The petitioners have been in possession of the lands since 1951. It was only in 1976 when the
respondents filed action to recover the lands. In the meantime, Maximo Aldon died.

As to the second question, the childrens cause of action accrued from the death of their father in
1959 and they had thirty (30) years to institute it (Art. 1141, Civil Code.) They filed action in
1976 which is well within the period.

Villadar Jr vs Zabala 545 scra 325

Facts:
Samuel Zabala Sr. owns Lot No. 5095, one-half of which he sold to his mother-in-law Estelita
Villadar for P75K on installment basis in Jan. 1995. Except for a note of partial payment of P
6,500, no contract was executed nor was there an agreement as to when the installments shall be
paid. In Feb. 1997, Samuel Sr. sold the other half of the lot to Eldon Zabala. Lot 5095-A was
registered under Eldons name and Lot 5095-B under Samuel Srs. In April, Estelita made
additional payment but Samuel Sr. and his wife decided to cancel the sale after confrontation
with Estelita. Samuel Sr. and Samuel Jr. filed a complaint for ejectment against Sergio Villadar Jr
who occupied one of the houses that stood in the property.
Issue: whether or not respondents can validly eject petitioners
Held: the respondents cannot validly eject petitioners. The oral contract was a contract of sale.
While the price was payable on installment, there was no agreement between Estelita and
Samuel Sr. that the latter reserved his title, conditioning the transfer of ownership upon full
payment of the price. It is in a contract to sell that ownership is, by agreement, reserved in the
seller and is not to pass to the buyer until full payment of the purchase price. Samuel, Sr. neither
notified Estelita by notarial act that he was rescinding the sale nor did he sue in court to rescind
the sale. In addition, the records do not show Samuel, Sr.s compliance with the requirements of
the Realty Installment Buyer Protection Act that actual cancellation takes place after 30 days
from receipt by the buyer of the notice of cancellation or the demand for rescission of the
contract by notarial act and upon full payment of the cash surrender value to the buyer, which in
this case is 50% of Estelitas total payments for more than two years. Under the circumstances,
Estelitas claim of ownership is valid, absent a valid rescission or cancellation of the contract of
sale

ZENAIDA K. CASTILLO and EMILIO CORDOVA, JR., plaintiffs- appellants, vs. HORACIO
K. CASTILLO and ENRIQUETA K. VDA. DE CASTILLO et. al., defendants-appellants
FACTS: Ysidro C. Castillo died, leaving as his heirs his wife Enriqueta Katigbak and their nine
children Horacio, Beatriz, Zenaida, Ysidro, Jr., Leonor, Crispin, Lourdes, Alicia and Ernesto.
Intestate proceedings for the settlement of the deceased's estate in the CFI of Manila were
instituted and his wife, Enriqueta was appointed administratrix. She filed an inventory of the
properties as well as the obligations left by the deceased. Enriqueta, as administratrix submitted a
project of partition, stating the properties which constituted the residuary hereditary estate of the

deceased Ysidro C. Castillo, after complete payment of debts, funeral charges, expenses of
administration, the allowance of the widow and inheritance and estate taxes. Despite approval of
the project of partition and the closing of the intestate proceedings, the properties remained under
the administration of Enriqueta K. Vda. de Castillo. Zenaida K. Castillo filed an action for
partition with accounting and receivership against her mother Enriqueta K. Vda. de Castillo and
her brothers and sisters. Alleging that the project of partition omitted to include certain properties
acquired by the defendants using community funds in their acquisition, she prayed that said
properties be divided and partitioned accordingly. And among these properties is the land
situated in Cabay, Tiaong, Quezon, with an area of 262,421 sq. meters originally co-owned by
Romeo Baldeo Ona. The lower court ruled that of this property was conjugal and therefore
subject to partition among the heirs. The defendants-appellants alleged that the lower court erred
when it held that the money used in the purchase of one-half of the land belonged to the spouses
Ysidro C. Castillo and Enriqueta Katigbak and, therefore, it was erroneous for the court to order
that it be partitioned as conjugal partnership property. Enriqueta, corroborated by her eldest son
alleged that, although she and her husband appeared as two of the buyers of said property, neither
of them paid any part of the purchase price for lack of money at the time the deed of sale was
executed; that she agreed pay on installment basis the portion of the purchase price the cobuyers, Spouses Macasaet had already paid; and that the said installments were paid from the
fruits of the property sold and her other properties.
ISSUE: WON the money used in the purchase of the land belonged to spouses Ysidro and
Enriqueta.
HELD: Yes. The money used in the purchase of the questioned property belonged to the conjugal
partnership property. The civil law provides that all properties of the marriage shall be presumed
conjugal unless it be proved that they belong exclusively to either of the spouses. To rebut or
overcome this presumption, there must be clear, convincing and satisfactory proof that this
consideration of the sale was paid by only one of the spouses and from her exclusive or separate
property. The fact that both the names of spouses Ysidro and Enriqueta are written as co- buyers
of the land establishes that they are actual co-purchasers thereof. The vendor Romeo Baldeo Ona
would not have acknowledged in the deed of sale the receipt in full of the purchase price of
P30,000.00 from the vendees if he had not really received full payment from the latter. Although
the testimony of the surviving spouse regarding the nature of the property is corroborated by
Horacio K. Castillo, the eldest son, such corroboration cannot carry weight, the same being selfserving. In fine, defendants-appellants have not come up with such substantial, satisfactory and
convincing proof as would be sufficient to rebut the presumption that the property in controversy
is conjugal.

Manuel Pagtalunan vs. Rufina dela Cruz Vda. De Manzano

Facts: Patricio Pagtalunan (petitioners father), entered into a contract to sell with respondent,
whereby the former agreed to sell and the latter to buy, a house and lot which formed half of a
parcel of land. The downpayment was paid but the monthly installments were allegedly stopped
without any justification. Respondent averred that she and Patricio entered into an agreement

suspending the payment of the installments within a certain period. But even before lapse of such
period, Patricio resumed demolishing the house. Respondent did not deny that she still owed
Patricio P5,650, but claimed that she did not resume paying her monthly installment because of
the unlawful acts committed by Patricio, as well as the filing of the ejectment case against her. A
demand to vacate the premises was also ignored by respondent. Petitioner then filed a complaint
for unlawful detainer against respondent. MTC rendered a decision in favor of petitioner ruling
that respondents failure to pay some of the installments resulted in the resolution/termination of
the contract to sell. RTC reversed this decision ruling that the agreement could not be
automatically rescinded since there was delivery to the buyer. A judicial determination of
rescission must be secured by petitioner as a condition precedent to convert the possession de
facto of respondent from lawful to unlawful. On appeal, the CA found that the parties, the MTC
& RTC, failed to apply RA 6552 (Maceda law); ruling further that the contract to sell was not
validly cancelled/rescinded under the RA. Petitioner contends that respondent also had more than
the grace periods provided under the Maceda Law within which to pay. There is nothing in the
Maceda Law, petitioner asserts, which gives the buyer a right to pay arrearages after the grace
periods have lapsed, in the event of an invalid demand for rescission. The Maceda Law only
provides that actual cancellation shall take place after 30 days from receipt of the notice of
cancellation or demand for rescission and upon full payment of the cash surrender value to the
buyer.
Issue: Whether or not the Maceda law is applicable Whether or not the contract to sell was
validly cancelled under the Maceda law.
Held: The CA correctly ruled that R.A No. 6552, which governs sales of real estate on
installment, is applicable in the resolution of this case. This case originated as an action for
unlawful detainer. Respondent is alleged to be illegally withholding possession of the subject
property after the termination of the Contract to Sell between Patricio and respondent. It is,
therefore, incumbent upon petitioner to prove that the Contract to Sell had been cancelled in
accordance with R.A. No. 6552. R.A. No. 6552, otherwise known as the Realty Installment
Buyer Protection Act, recognizes in conditional sales of all kinds of real estate (industrial,
commercial, residential) the right of the seller to cancel the contract upon non-payment of an
installment by the buyer, which is simply an event that prevents the obligation of the vendor to
convey title from acquiring binding force. The Court agrees with petitioner that the cancellation
of the Contract to Sell may be done outside the court particularly when the buyer agrees to such
cancellation. However, the cancellation of the contract by the seller must be in accordance with
Sec. 3 (b) of R.A. No. 6552, which requires a notarial act of rescission and the refund to the
buyer of the full payment of the cash surrender value of the payments on the property. Actual
cancellation of the contract takes place after 30 days from receipt by the buyer of the notice of
cancellation or the demand for rescission of the contract by a notarial act and upon full payment
of the cash surrender value to the buyer. Based on the records of the case, the Contract to Sell
was not validly cancelled or rescinded under Sec. 3 (b) of R.A. No. 6552, among others,
Petitioner contends that he has complied with the requirements of cancellation under Sec. 3 (b)
of R.A. No. 6552. He asserts that his demand letter dated February 24, 1997 should be
considered as the notice of cancellation or demand for rescission by notarial act and that the cash
surrender value of the payments on the property has been applied to rentals for the use of the
house and lot after respondent stopped payment after January 1980. The Court, however, finds

that the letter dated February 24, 1997, which was written by petitioners counsel, merely made
formal demand upon respondent to vacate the premises in question within five days from receipt
thereof since she had long ceased to have any right to possess the premises x x x due to her
failure to pay without justifiable cause the installment payments. Clearly, the demand letter is not
the same as the notice of cancellation or demand for rescission by a notarial actrequired by R.A
No. 6552.

ANDRE T. ALMOCERA VS JOHNY ONG 546 SCRA 164

FACTS: Plaintiff Johnny Ong tried to acquire from the defendants a townhome in Atrium
Townhomes in Cebu City. Plaintiff was able to pay the amount of P1, 060, 000.00. Prior to his
full payment, Ong claimed that Almocera and First Builders fraudently concealed the fact that
the property was already mortgage to and encumbered with the Land Bank of the Philippines.
Defendants answered that they borrowed money from the plaintiffs brother, Tommy Ong. The
payment would be the one unit town house. When the project went underway, Tommy Ong
wanted to buy another townhouse for his brother Johnny Ong and tendered money of P350,
000.00 as his third partial payment.
ISSUE: Was there a contract of sale between Johnny Ong and Almocera?
HELD: NO. It cant be disputed that the contract entered into by the parties was a contract to
sell. The contract was denominated as such and it contained the provision that the unit be
conveyed by way of an Absolute Deed of Sale, together with the attendant documents of
Ownership- the Transfer Certificate of Title and Certificate of Occupancy an that the balance of
the contract price shall be paid upon the completion and delivery of the unit, as well as the
acceptance thereof by respondent. All these clearly indicate that ownership of the townhouse has
not passed to respondent. In Serrano vs Caguiat, 517 SCRA 57 we explained: a contract of sell is
akin to a conditional sale where the efficacy or obligatory force of the vendors obligation to
transfer title is subordinated to the happening of a future and uncertain event, so that if the
suspensive condition does not take place, the parties would stand as if the conditional obligation
had never existed. The suspensive condition is commonly full payment of the purchase price.

CORAZON L. ESCUETA, ET.AL. VS. RUFINA LIM 512 SCRA 411

FACTS: Respondent Rufina Lim averred inter alia that she bought the hereditary shares of
Ignacio Rubio and the heirs of Luz Baloloy. That said vendors executed a contract of sale after
receiving a down payment or earnest money in the amount of P102, 169.86 and P450,000.0,
respectively. It was agreed in the contract of sale that the vendors would secure certificates of
title covering their respective hereditary shares, that the balance of purchase price would be paid
to each heir upon presentation of their individual certificates. Ignacio Rubio and the heirs of Luz
Baloloy refused to deliver the certificates of title. As to petitioner Corazon Escueta, in spite of
her knowledge that the disputed lots have already been sold by Ignacio Rubio to respondent, it is

alleged that a simulated deed of sale involving said lots was affected by Ignacio Rubio in her
favor, and that the simulated deed of sale by Rubio to Escueta has raised doubts and clouds over
respondents title. Heirs of Luz Baloloy denied the allegations stating that the contract of sale has
no more force and effect as far the Baloloys are concerned, since they withdrawn their offer to
sell for reason that responded failed to pay the balance of the purchase price. For petitioner
Ignacio Rubio, he answered he did not enter into a contract of sale with her; he appointed his
daughter Patricia Llamas to be his attoryney-in-fact and not in favor of Lim & that the P100,
000.00 respondent claimed he received as down payment for the lots is a simple transaction by
way of a loan with Lim.
ISSUE: Is the contract of sale between Ignacio Rubio and Corazon Escueta valid?
HELD: No. Ignacio Rubio could no longer sell the subject properties to Corazon Escueta, after
having sold them to respondent. In a contract of sale, the vendor loses ownership over the
propert and cannot recover it until and unless the contract is resolved or rescinded x x x. The
records do not show that Ignacio Rubio asked for rescission of the contract. What he adduced
was a belated revocation of the special power of attorney he executed in favor of Patricia
Llamas. in the sale of immovable property, even though it may have been stipulated that upon
failure to pay the price at the time agreed upon the rescission of the contract shall of right take
place, the vendee may pay, even after the expiration of the period, as long as no demand for
rescission of the contract has been made upon him either judicially or by a notarial act.