[G.R. No. 143513.

November 14, 2001]

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS and FIRESTONE
CERAMICS, INC., respondents. 368 SCRA 691

BELLOSILLO, J.:

PETITIONER: Polytechnic University of the Philippines RESPONDENTS: Court of Appeals and Firestone
Ceramics

FACTS: National Development Corporation (NDC) and Firestone entered into several contracts of lease
of a parcel of land located in Sta. Mesa, Manila (NDC Compound). The first contract covered 2.9 hectares
of the NDC Compound for use as manufacturing plant for 10 years, renewable for another 10 years. The
second contract involved four NDC’s steel warehouse in Davao to be shipped in Manila and used in the
NDC Compound as well as 2.6 hectare-lot. The 3rd contract involved lease of six steel warehouse. Prior
to the expiration of the 3rd contract, NDC and Firestone entered into a new agreement of lease for 10
years, renewable for another 10 years and expressly granting Firestone the first option to purchase the
leased premises in the event that NDC decides to sell its properties incuding the lot. Before the
expiration of the “new agreement,” Firestone notified NDC of its plan of renewing the contract.
Firestone then learned of the rumors of NDC’s plan to dispose of the property in favor of PUP. Firestone
filed a complaint for specific performance to compel NDC to sell the land in its favor since Firestone has
the right of refusal. On the other hand, PUP referred to Memorandum Order No. 214 issued by
President Cory Aquino ordering the transfer of the whole NDC compound to the National Government,
which in turn would convey the property to PUP. PUP also argues that the lease contract between
Firestone and NDC had expired already and Firestone’s right of first refusal applied only to the six-unit
pre-fabricated warehouse and not the lot upon which it stood.

ISSUE: Was there a valid Sale?

HELD: The SC ruled that there was sale between NDC and PUP as the three requisites were present – (1)
consent – as seen in the Memorandum Order NO. 214, (2) object – NDC Compound, (3) consideration –
cancellation of NDC’s liabilities in favor of the National Government. Firestone can exercise its right of
first refusal. Lastly, the consideration should only be P554.74 but since Firestone did not appeal the
RTC’s ruling re the consideration (P1500), there is no reason to modify it.

DOCTRINE: The Civil Code provision is, in effect, a "catch-all" provision which effectively brings within its
grasp a whole gamut of transfers whereby ownership of a thing is ceded for a consideration.

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.
G.R. No. 166714 February 9, 2007

AMELIA S. ROBERTS, Petitioner,

vs.

MARTIN B. PAPIO, Respondent.

CALLEJO, SR., J.:

PETITIONER: Amelia S. Roberts RESPONDENT: Martin B. Papio

SUMMARY: The Spouses Papio were the owners of a residential lot located in Makati. In order to secure
the loan from the Amparo Investments Corp, they executed a real estate mortgage on the property.
Upon Papio’s failure to pay the loan, the corporation filed a petition for the extrajudicial foreclosure of
the mortgage. Since the couple needed money to redeem the property and to prevent the foreclosure
of the real estate mortgage, they executed a Deed of Absolute Sale over the property in favor of Martin
Papio’s cousin, Amelia Roberts. As soon as the spouses had settled their obligation, the corporation
returned the owner’s duplicate TCT which was then delivered to Amelia Roberts.Roberts and Papio then
executed a 2-year lease subject to renewa. However, Papio failed to pay rentals and Roberts instituted
this case. Papio claims that he repurchased the said land under an equitable mortgage.

Issue: Whether or Not the contract between Roberts and Papio is an equitable mortgage.

HELD: The SC said that it is not; it is only a contract of sale where no right to repurchase was reserved.
Moreover, Papio admitted the existence of sale by insisting he repurchased the land which is
incompatible with the defense of equitable mortgage as an equitable mortgage does not transfer
ownership.

DOCTRINE: An agreement to repurchase becomes a promise to sell when made after the sale because
when the sale is made without such agreement the purchaser acquires the thing sold absolutely; and, if
he afterwards grants the vendor the right to repurchase, it is a new contract entered into by the
purchaser as absolute owner. An option to buy or a promise to sell is different and distinct from the
right of repurchase that must be reserved by means of stipulations to that effect in the contract of sale.
JOVAN LAND v. COURT OF APPEALS & QUESADA (G.R. No. 125531)

G.R. No. 125531, February 12, 1997

HERMOSISIMA, JR. J.:

FACTS:

Petitioner Jovan Land, Inc. is a corporation engaged in real estate business. Its President is on Joseph Sy.
On the other hand, herein private respondent Eugenio Quesada is the owner of the Q Building located in
Mayhaligue, Sta. Cruz, Manila.

Petitioner learned from one Consolacion Mendoza that private respondent was selling his Mayhaligue
property. Thus, petitioner thru its president made a written offer to private respondent. The first two
offers were rejected. However, on the third attempt, Sy sent a letter to Quesada constituting the offer;
the letter having annotation with the phrase “received original, 9-8-89” beside which appears the
signature of private respondent.

In lieu, petitioner insist that a perfected agreement to sell the Mayhaligue property existed, hence, it
filed with the RTC of Quezon City a complaint for specific performance and collection of sum of money
and damages. However, the trial court ruled against petitioner. On appeal to the CA, the appelate court
just affirmed the trial court’s decision.

ISSUE: Whether or not there was a contract of sale perfected and thus is valid?

Held: No. That it is a fundamental principle that before a contract of sale be valid, the following must be
present: 1. consent or meeting of the minds; 2. determinate subject matter; and, 3. price certain in
money or its eqivalent. That until contract of sale is perfected, it cannot, as an independent source of
obligation, serve as a binding juridical relation between the parties.

In the case at bar, petitioner anchors its arguments on the third letter-offer, however, the court ruled
that there is nothing written or documentary to show that such offer was accepted by private
respondent and such annotation in the letter is just a mere memorandum of the receipt. The requisites
of a valid contract of sale are lacking in the said receipt and therefore, the “sale” is not valid
G.R. No. 138018. July 26, 2002]

RIDO MONTECILLO, petitioner, vs. IGNACIA REYNES and SPOUSES REDEMPTOR and ELISA ABUCAY,
respondents.

CARPIO, J.

FACTS: Ignacia Reynes, owns a lot situated at Mabolo, Cebu City and a portion of it was bought by the
Abucay spouses, who built a residential house on the aforementioned lot. However, the Petitioner
alleges that the said land was already bought by them showing a deed of a sale that was signed affixing
Reynes’ thumbmark. In the said deed of sale shown by Montecillo, Reynes affirmed the said deed,
wherein they agreed on the price in the amount of 47,000.00. Accordingly the deed contains “That I,
IGNACIA T. REYNES, x x x for and in consideration of FORTY SEVEN THOUSAND (P47,000.00) PESOS,
Philippine Currency, to me in hand paid by RIDO MONTECILLO x x x, receipt of which is hereby
acknowledged, have sold, transferred, and conveyed, unto RIDO MONTECILLO, x x x a parcel of land x x
x.“ Montecillo then promised to pay the amount but according to Reynes, the former has never been
able to pay which lead the latter to demand for payment but was not complied with by the former.
Subsequently, Reynes signed another deed of sale in favor of Spouses Abucay.

ISSUE: Whether the deed of sale is void ab initio or only rescissible?

RULING: YES, the deed is void ab initio.

Although the face of the instrument, it may appear that they have a contract but in truth and in fact
they have no contract per se between them for there is lack of consideration and not merely a case of
failure to pay the purchase price as claimed by Montecillo. The contract lacks a cause – one of those
essential requirements in a valid contract. Where the deed of sale states that the purchase price has
been paid but in fact has never been paid, the deed of sale is void ab initio for lack of consideration, it
produces no effect whatsoever where the same is without cause or consideration in that the purchase
price which appears thereon as paid has in fact never been paid by the purchaser to the vendor. Such a
sale is non-existent or cannot be considered as consummated.

RTC: Declared the Montecillo’s deed of sale is null and void

CA: Affirmed the decision of RTC in toto

SC: Affirmed CA’s decision

[G.R. No. 109355. October 29, 1999]

SERAFIN MODINA, petitioner vs. COURT OF APPEALS AND ERNESTO HONTARCIEGO, PAUL FIGUEROA,
TEODORO HIPALLA AND RAMON CHIANG, MERLINDA CHIANG, respondents.

PURISIMA, J.:

Facts: This case involves parcels of land registered under the name of Ramon Chiang.

Chiang theorized that the subject properties were sold to him by his wife, Merlinda Plana Chiang as
evidenced by a Deed of Sale and were subsequently sold by Chiang to the petitioner Serafin Modina.
(Dates of sale:August 3, 1979 and August 24, 1979, respectively.)

Modina brought a Complaint for Recovery of Possession with Damages against the private respondents
before the RTC.

Upon learning the institution of the said case, Merlinda presented a Complaint-in-intervention, seeking
the declaration of nullity of the Deed of Sale between her husband and MODINA on the ground that the
titles of the parcels of land in dispute were never legally transferred to her husband.

She contended that fraudulent acts were allegedly employed by her husband to obtain a Torrens Title in
his favor. However, she confirmed the validity of the lease contracts with the other private
respondents.

MERLINDA also admitted that the said parcels of land were those ordered sold by the CFI of Iloilo in
“Intestate Estate of Nelson Plana” where she was appointed as the administratix, being the widow of
the deceased, her first husband. An Authority to Sell was issued by the said Probate Court for the sale of
the same properties.

ISSUE: (1) whether the sale of subject lots should be nullified, (2) whether petitioner was not a
purchaser in good faith, (3) whether the decision of the trial court was tainted with excess of
jurisdiction; and (4) whether or not only three-fourths of subject lots should be returned to the private
respondent.

Held:- On the First Issue the two sales are void and non-existent, a void contract produces no effect.

- On the Second issue the factual findings of the court found that there were circumstances
known to MODINA which rendered their transaction fraudulent under the attendant
circumstances. As a general rule, in a sale under the Torrens system, a void title cannot give rise
to a valid title. The exception is when the sale of a person with a void title is to a third person
who purchased it for value and in good faith. A purchaser in good faith is one who buys the
property of another without notice that some other person has a right to or interest in such
property and pays a full and fair price at the time of the purchase or before he has notice of the
claim or interest of some other person in the property.
 - On the Third Issue it is a well-settled rule that a Court of First Instance (now Regional Trial Court)
has jurisdiction over a case brought to rescind a sale made upon prior authority of a Probate
Court. This does not constitute interference or review of the order of a co-equal Court since the
Probate Court has no jurisdiction over the question of title to subject properties. Consequently,
a separate action may be brought to determine the question of ownership.
-
- Lastly, on the issue of whether only three-fourths of the property in question should have been
returned to MERLINDA, petitioners stance is equally unsustainable. It is a settled doctrine that
an issue which was neither averred in the Complaint nor raised during the trial before the lower
court cannot be raised for the first time on appeal, as such a recourse would be offensive to the
basic rules of fair play, justice, and due process.
- The issue of whether only three-fourths of subject property will be returned was never an issue
before the lower court and therefore, the petitioner cannot do it now.

G.R. No. 156364 September 3, 2007

JACOBUS BERNHARD HULST, petitioner,

vs.

PR BUILDERS, INC., respondent.

AUSTRIA-MARTINEZ, J.:

FACTS:

a.) Petitioner and his spouse (Ida) dutch nationals entered into a contract to sell with PR Builders Inc. for
the purchase of a 210 sq m residential unit in respondent town house in Niyugan, Laurel, Batangas.

b.) June 1995, the petitioner filed rescission of contract before housing and land Use Regulatory Board
(HLURB) for respondent’s failure to comply.

c.) April 22, 1997, HLURB arbiter Ma. Perpetua y Aquino(arbiter) rendered a decision in favor of
petitioner. contract is rescinded. (reimburst complaint the sum of P3,187, 500.00 PLUS 12% per anum
from time complaint was filed).

d.) Spouses Hulst divorced, Ida assigned her rights over the purchased property to petitioner and alone
pursued the case.
e.) August 21, 1997, HLURB arbiter issued a writ of execution addressed to ex-officio shrift of RTC of
Tanuan, Batangas diredcting the latter to execute its judgment.

f.) April 13, 1998, The ex-officio sherift proceed to implement the writ of execution. Respondent filed
complaint with CA on Petition for Certiorary and prohibition, levy made by the sheriff was set aside,
requiring the sheriff to levy first on respondents personal properties.

g.) January 26, 1999, upon petitioner’s motion, HLURB issued an alias writ of execution.

h.) March 23, 1999, the sheriff levied on respondent’s 15 parcels of land covered by 13 transfer of title in
Brgy. Niyugan, Laurel , Batangas.

i.) March 27, 200, Noticed of sale , the sheriff set the public auction of the levied properties on April 28,
2000 at 10 am.

j.) April 26, 2000, respondent filed an urgent motion to quash writ of levy with HLURB on the ground
that sheriff made a overlevy.

k.) Public Auction was conducted and the sum of P5,313,040.00 from Holly Properties Realty
Corp(winning bidder) was turned over to petitioner after deducting the legal fees.

l.) September 27, 2000, petitioner filed a petition for certiorari and prohibition with CA(SEC 1(N) RULE IV
of 1996HLURB)- Motion for recon is prohibited).

m.) October 30,2002, CA dismissed the petition, held that when there is a right to redeem inadequacy of
price should not be material holds no water as what is obtaining in this case but an inadequacy that
shock the senses.
n.) Petitioner took the present recourse on the sole ground that the honorable CA gravely erred in
affirming the arbiter’s order setting aside the levy made by the sheriff on the subject properties.

ISSUE:

Whether or not that the foreign nationals were proscribed to own real property under the rules, but is
entitled to recover only the amount paid representing the purchase upon the rescission of the contract.

HELD:

Yes thus exception finds application in this case, under article 1414, one who repudiates the agreement
and demand his money before the illegal act has taken place is entitled to recover. Petitioner is
therefore entitled to recover what he has paid, although the basis of his claim for rescission, which was
granted by the HLURB Was not the fact that he is not allowed to acquire private land under the Phil.
Consti. but petitioner is entitled to the recovery only the amount of P3,187,500.00 representing the
purchase price paid to respondent. No damages may be recovered on the basis of void contract; being
nonexistent, the agreement produces no judicial tie between the parties involved. Further , petitioner is
not entitled to actual as well as interest thereon, moral and exemplary damages and atty’s fees.

A sense of justice and fairness demands that petitioner should not be allowed to benefit from his act of
entering into a contract to sell that violates the constitutional prescription.

The instant Petition is granted. The decision dated Oct. 30, 2002 of CA is reversed and set aside. The
order dated August 28,2000 of HLURB Arbiter and director Ceniza is declared null and void.

Petitioner is ordered to return to respondent the amount of P2,125,540 without interest in excess of the
proceeds of the auction sale delivered to petitioner.

G.R. No. 131679, February 01, 2000 ]

CAVITE DEVELOPMENT BANK AND FAR EAST BANK AND TRUST COMPANY, PETITIONERS, VS. SPOUSES
CYRUS LIM AND LOLITA CHAN LIM AND COURT OF APPEALS, RESPONDENTS.

MENDOZA, J

Facts:

Rodolfo Guansing obtained a loan from Cavite Development Bank(CDB) and offered as security his real
estate property. For failing to pay his loan the property was foreclosed and title was issued in the name
of CDB.

Now here comes Lolita Chan Lim, the respondent on this case who offered to buy the property from
CDB. Mrs. Lim paid P30,000.00 as option money and was issued receipt by CDB. However , Mrs. Lim later
discovered that the title of the property is being disputed by Perfecto Guansing, the father of the
mortgagee Rodolfo Guansing. In fact, in a separate case it was declared that Rodolfo fraudulently
secured title to the said mortgaged property and title to it was restored to Perfecto . The decision has
since become final and executory.

Aggrieved by what she considered a serious misrepresentation by CDB and its mother company FEBTC,
on their ability to sell the subject property, filed an action for specific performance and damage against
petitioners.

Issues: Was the sale between CDB and Mrs. Lim perfected?

Is CDB liable for damges?

Is the sale valid?

HELD: Contracts are not defined by the parties thereto but by the principles of law. In determining the
nature of a contract, the courts are not bound by the name or title given to it by the contracting parties.
In the case at bar, the sum of P30,000.00, although denominated in the offer to purchase as “option
money’ is actually in the nature of “earnest money’ or down payment when considered with the other
terms of the offer.

It is because when Mrs. Lim offered to buy the property the 10% so called “option money” forms part of
the purchase price as contemplated under Art. 1482 of the Civil Code. It is clear then that the parties in
this case actually entered into a contract of sale, partially consummated as to the payment of the price.

CDB cannot invoke the defense that it is a mortgagee in good faith. It only applies to private individuals
and not to banking institutions. They cannot be excused from the duty of exercising the due diligence
required of banking institutions. It is standard practice for banks, before approving a loan, to investigate
who are the real owners thereof. Banking is affected with public interest that is why they are expected
to exercise more care and prudence than private individuals.

Considering CDB’s negligence it is therefore liable for damages.

As to its validity, the doctrine of “Nemo dat quod non habet” applies. One cannot give what one does
not have. The seller not being the owner the sale is void.
G.R. No. L-24732 April 30, 1968

PIO SIAN MELLIZA, petitioner,

vs.

CITY OF ILOILO, UNIVERSITY OF THE PHILIPPINES and THE COURT APPEALS, respondents.

BENGZON, J.P., J.:

FACTS Pio Sian Melliza has a TCT over a parcel of land, over which UP Iloilo presently stands. He filed an
action to recover the lot, but UP claims that the lot was bought by the City Government of Iloilo, which
bought the said lot from Juliana Melliza for the construction of the municipal hall with parks and
avenues, according to the Arellano Plan. Both the CFI and the CA ruled in favor of UP Iloilo, that they are
the rightful owners of the land.

ISSUE: whether or not the instrument executed in fact 6 included the lot occupied by UP Ilolo, and
whether or not the instrument covers a determinable thing.

HELD: The SC affirmed the CFI and CA rulings, stating that according to the Art. 1273 of the Civil Code an
object is determinable if there is no need to execute another agreement/contract to determine which
thing the seller and buyer are talking about. The SC said that because the instrument referred to
whatever lots were needed to follow the Arellano Plan, which was in existence even before the
questioned instrument, there is no need for another contract to determine what lot the seller intended
to sell, and therefore the object is determinate.

DOCTRINE: The object of the sale is a determinate object when there is no need for a new agreement
between the parties to designate which thing the seller wants to sell and the buyer wants to buy, in
accordance with Art. 1273 of the Civil Code.

G.R. No. 74470 March 8, 1989

NATIONAL GRAINS AUTHORITY and WILLLAM CABAL, petitioners

vs.

THE INTERMEDIATE APPELLATE COURT and LEON SORIANO, respondents.

MEDIALDEA, J.

FACTS: Soriano offered to sell palay to the NFA and submitted the required documents. Soriano’s
certificate was processed and was given a quota of 2,640 cavans of palay. This represented the
maximum number of palay that Soriano can sell to NFA. Soriano delivered 630 cavans of palay but the
same were not rebagged, classified, or weighed (which was the standard procedure for the NFA). When
Soriano demanded for payment, he was informed that the payment will be held in abeyance since the
NFA received information that Soriano is not a bona fide farmer. NFA ordered Soriano to withdraw the
630 cavans of palay from the warehouse, because NFA cannot legally accept the said delivery on the
ground that Soriano is not a bona fide farmer. Soriano filed a complaint for specific performance with
damages against the NFA. The trial court rendred judgment in favor of Soriano. The CA affirmed the trial
court’s decision.

ISSUE: Was there a Contract of Sale?

HELD: The SC held that there was indeed a contract of sale. Art. 1458 defines sale as a contract whereby
one of the contracting parties obligate himself to transfer the ownership of and to deliver a determinate
thing, and the other party to pay a price certain in money or its equivalent. In the case at bar, Soriano
initially offered to sell palay to NFA. When NFA accepted the offer noting the 2,460 cavans of palay,
there was already a meeting of minds between the parties. Sale is a consensual contract, there is
perfection when there is consent upon the subject matter and price, even if neither is delivered. NFA
contends further that one of the essential requisites of contract, which is consent. The acceptance
referred to which determines consent is the acceptance of the offer of one party by the other and not of
the goods delivered as contended by NFA. Hence, there is already a perfected contract of sale between
NFA and Soriano.

DOCTRINE: Sale is a consensual contract, there is perfection when there is consent upon the subject
matter and price, even if neither is delivered.

G.R. No. L-59534 May 10, 1990

COMPAÑIA GENERAL DE TABACOS DE FILIPINAS, petitioner,

vs.

COURT OF APPEALS, PHILIPPINE NATIONAL BANK and DEVELOPMENT BANK OF THE PHILIPPINES,
respondents.

NARVASA, J.

FACTS: Gomez And Torres were the owners and holders of a sugar quota appertaining to certain
plantation. Later, they mortgaged certain real estate and personal property together with all buildings,
and sugar quota to a corporation.

Meanwhile, the sugar quota was sold by Gomez and Torres to Theo H. Davies & Co. Petitioner was the
latter’s successor in interest.

ISSUE: Is the contract of sale covering the sugar quota valid?

HELD: The sale is not valid. The intangible property that is the sugar quota in question should be
considered as real property by destination, “an improvement attaching to the land thereto.” It is not
possible to sell sugar quota of a particular number of piculs without specifying the land to which it
relates. That sale is void for lack of subject matter.
G.R. No. L-9935 February 1, 1915

YU TEK and CO., plaintiff-appellant,

vs.

BASILIO GONZALES, defendant-appellant.

TRENT, J.:

FACTS: Basilio Gonzales (Gonzales) received P3000 from Yu Tek & Co and in consideration of said sum,
Gonzales obligated himself to deliver to Yu Tek & Co 600 piculs of sugar. In the contract, it states that in
case Gonzales does not deliver said piculs of sugar, the contract will be rescinded and Gonzales will be
obligated to return to Yu Tek & Co the 3000 received and indemnity for loss and damages in the sum of
P1200.

There was no delivery of sugar by Gonzales hence Yu Tek & Co prayed for the return of the P3000 plus
the P1200. Judgment was rendered for P3000 only and due to this, both Gonzales and Yu Tek & Co
appealed.

ISSUE: Was there a valid Sale?

HELD: The Court ruled that there was no perfected sale, only a promise of sale since the thing, which
was “sugar” was simply a generic name and there was no appropriation for a particular lot of sugar.
Furthermore, Gonzales must pay the P1200 aside from the P3000 by way of indemnity for loss and
damages.

DOCTRINE: Art. 1450: The sale shall be perfected between vendor and vendee and shall be binding on
both of them, if they have agreed upon the thing which is the object of the contract and upon the price,
even when neither has been delivered. There was no perfected sale, merely an executory agreement, a
promise of sale. Gonzales merely used the generic name for the thing sold and there was no
appropriation of any particular lot of sugar.

G.R. No. L-11491 August 23, 1918

ANDRES QUIROGA, plaintiff-appellant,

vs.

PARSONS HARDWARE CO., defendant-appellee.

.AVANCEÑA, J.:
FACTS: Quiroga and Parsons Hardware entered into a contract where the former granted the latter the
exclusive right to sell Quiroga Beds in the Visayas. It provided for a discount of 25% as commission for
the sales, among other conditions. Quiroga alleged that Parsons breached its contractual obligations by
selling the beds at a higher price, not having an open establishment in Iloilo, not maintaining a public
exhibition, and for not ordering beds by the dozen. Only the last imputation was provided for by the
contract, the others were NEVER stipulated. Quiroga argued that since there was a contract of agency
between them, such obligations were necessarily implied

ISSUE: Whether or Not the contract between them was one of agency, and not sale.

HELD: The Court held that the agreement between Quiroga and Parsons was that of a simple purchase
and sale - NOT AN AGENCY. Quiroga supplied beds, while Parsons had the obligation to pay their
purchase price. These are characteristics of a purchase and sale. In a contract of agency (or order to
sell), the agent does not pay its price yet, and sells the products, remitting to the principal its proceeds.
Contracts are what the law defines it to be, not what the parties call it.

DOCTRINE: These are precisely the essential features of a contract of purchase and sale. There was the
obligation on the part of the plaintiff to supply the beds, and, on that of the defendant, to pay their
price. These features exclude the legal conception of an agency or order to sell whereby the mandatary
or agent receives the thing to sell it, and does not pay its price, but delivers to the principal the price he
obtains from the sale of the thing to a third person, and if he does not succeed in selling it, he returns it.

G.R. No. 21943 September 15, 1924

ASKAY, plaintiff-appellant,

vs.

FERNANDO A. COSALAN, defendant-appellee.

MALCOLM, J.

FACTS: Askay obtained a title to the Mineral Claim which he allegedly to Cosolan. It was alleged that
there is inadequacy of consideration for the transfer, which according to the deed of conveyance, and to
the oral testimony, consisted of ₱107.00 in cash, a bill fold, one sheet, one cow and two carabaos.

ISSUE:Is the sale valid?

HELD: Yes the sale is valid. The fact that bargain is a hard one, coupled with mere inadequacy of price
when both parties are in position to form an independent judgment concerning the transaction, is not a
sufficient ground for cancellation of a contract.

G.R. No. L-32811 March 31, 1980

FELIPE C. ROQUE, petitioner,

vs.

NICANOR LAPUZ and THE COURT OF APPEALS, respondents.

GUERRERO, J

FACTS: Sometime in 1964, plaintiff and defendant entered into an agreement of sale covering Lots 1, 2
and 9, Block 1, of said property, payable in 120 equal monthly installments at the rate of P16.00, P15.00
per square meter, respectively. In accordance with said agreement, defendant paid to plaintiff the sum
of P150.00 as deposit and the further sum of P740.56 to complete the payment of four monthly
installments covering the months of July, August, September, and October, 1954.

On January 24, 1955, defendant requested plaintiff that he be allowed to abandon and substitute Lots 1,
2 and 9, the subject with Lots 4 and 12, Block 2 of the Rockville Subdivision, which are corner lots, to
which request plaintiff graciously acceded. The evidence discloses that defendant proposed to plaintiff
modification of their previous contract to sell because he found it quite difficult to pay the monthly
installments on the three lots, and besides the two lots he had chosen were better lots, being corner
lots. In addition, it was agreed that the purchase price of these two lots would be at the uniform rate of
P17.00 per square meter payable in 120 equal monthly installments, with interest at 8% annually on the
balance unpaid. Pursuant to this new agreement, defendant occupied and possessed Lots 4 and 12, and
enclosed them, including the portion where his house now stands, with barbed wires and adobe walls.
However, aside from the deposit of P150.00 and the amount of P740.56, which were paid under their
previous agreement, defendant failed to make any further payment on account of the agreed monthly
installments for the two lots in dispute, under the new contract to sell. Plaintiff demanded upon
defendant not only to pay the stipulated monthly installments in arrears, but also to make up-to-date
his payments, but defendant refused to comply with plaintiff's demands.

On or about November 3, 1957, plaintiff demanded upon defendant to vacate the lots in question and
to pay the reasonable rentals thereon at the rate of P60.00 per month from August, 1955. On January
22, 1960, petitioner Felipe C, Roque filed the complaint against defendant Nicanor Lapuz for rescission
and cancellation of the agreement of sale between them involving the two lots in question and prayed
that judgment be rendered ordering the rescission and cancellation of the agreement of sale, the
defendant to vacate the two parcels of land and remove his house therefrom and to pay to the plaintiff
the reasonable rental thereof at the rate of P60.00 a month from August 1955 until such time as he shall
have vacated the premises, and to pay the sum of P2,000.00 as attorney's fees, costs of the suit and
award such other relief or remedy as may be deemed just and equitable in the premises.

The Court of Appeals rendered its decision that the defendant Nicanor Lapuz is granted a period of
ninety (90) days from entry hereof within which to pay the balance. Hence, this appeal.
ISSUE: Can private respondent be entitled to the Benefits of the third paragraph of Article 1191, New
Civil Code, for the fixing of period

HELD: No. Respondent as obligor is not entitled to the benefits of paragraph 3 of Art. 1191, NCC Having
been in default and acted in bad faith, he is not entitled to the new period of 90 days from entry of
judgment within which to pay petitioner the balance of P11,434.44 with interest due on the purchase
price of P12,325.00 for the two lots. To allow and grant respondent an additional period for him to pay
the balance of the purchase price, which balance is about 92% of the agreed price, would be
tantamount to excusing his bad faith and sanctioning the deliberate infringement of a contractual
obligation that is repugnant and contrary to the stability, security and obligatory force of contracts.
Moreover, respondent's failure to pay the succeeding 116 monthly installments after paying only 4
monthly installments is a substantial and material breach on his part, not merely casual, which takes the
case out of the application of the benefits of pa paragraph 3, Art. 1191, N.C.C.

Pursuant to Art. 1191, New Civil Code, petitioner is entitled to rescission with payment of damages
which the trial court and the appellate court, in the latter's original decision, granted in the form of
rental at the rate of P60.00 per month from August, 1955 until respondent shall have actually vacated
the premises, plus P2,000.00 as attorney's fees. The Court affirmed the same to be fair and reasonable.
The Court also sustained the right of the petitioner to the possession of the land, ordering thereby
respondent to vacate the same and remove his house therefrom.

G.R. No. L-23630 August 25, 1925

TIBURCIO LEOQUINCO, plaintiff-appellant,

vs.

THE POSTAL SAVINGS BANK, ET AL., defendants-appellees.

JOHNSON, J.

FACTS:

The Postal Savings Bank offered for sale at public auction its parcel of land. It reserved the right to reject
any and all bids. Leoquinco offered the highest bid at P27,000.00 but said offer was rejected by the bank
Leoquinco sought to compel the bank to execute a deed of sale covering the land in his favor.

ISSUE: Can the Bank be compelled to execute the deed of sale?

HELD: No. The bank cannot be compelled to execute the deed of sale. The owner of property, which is
offered for sale, either at public or private auction, has the right to prescribe the manner, conditions,
and terms of such sale. He may provide that all of the purchase price should be paid at the time of the
sale, or any portion thereof, or that time will be given for the payment, or that any and all bids may be
rejected. The conditions of a public sale announced by an auctioneer or by the owner of the property at
the time and place of the sale, are binding upon all bidders, whether they knew of such conditions or
not.

The bidder is bound by the rules and conditions fixed by the bank.