Sales Digest

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DIGNOS YS.

COURT OF APPEALS158 SCRA 378


FACTS:
The spouses Silvestre and Isabel Dignos were. owners of a parcel of land in Opon,
Lapu-Lapu City. OnJune 7, 1965, appellants, herein petitioners Dignos spouses sold the
said parcel of land to respondentAtilano J. Jabil for the sum of P28,000.00, payable in
two installments, with an assumption of indebtedness with the First Insular Bank of
Cebu in the sum of PI 2,000.00, which was paid andacknowledged by the vendors in the
deed of sale executed in favor of plaintiff-appellant, and the nextinstallment in the sum
of P4,000.00 to be paid on or before September 15, 1965.On November 25, 1965, the
Dignos spouses sold the same land in favor of defendants spouses, LucianoCabigas and
Jovita L. De Cabigas, who were then U.S. citizens, for the price of P35,000.00. A deed
of absolute sale was executed by the Dignos spouses in favor of the Cabigas spouses,
and which wasregistered in the Office of the Register of Deeds pursuant to the
provisions of Act No. 3344.As the Dignos spouses refused to accept from plaintiff-
appellant the balance of the purchase price of theland, and as plaintiff- appellant
discovered the second sale made by defendants-appellants to the Cabigasspouses,
plaintiff-appellant brought the present suit.

ISSUE:
Whether or not there was an absolute contract of sale.2. Whether or not the contract
of sale was already rescinded when the Digros spouses sold the land toCabigas

HELD:
Yes. That a deed of sale is absolute in nature although denominated as a "Deed of
Conditional Sale"where nowhere in the contract in question is a proviso or stipulation
to the effect that title to theproperty sold is reserved in the vendor until full payment of
the purchase price, nor is there astipulation giving the vendor the right to unilaterally
rescind the contract the moment the vendeefails to pay within a fixed period.A careful
examination of the contract shows that there is no such stipulation reserving the title
of the property on the vendors nor does it give them the right to unilaterally rescind the
contract uponnon-payment of the balance thereof within a fixed period.On the contrary,
all the elements of a valid contract of sale under Article 1458 of the Civil Code,
arepresent, such as: (1) consent or meeting of the minds; (2) determinate subject matter;
and (3)price certain in money or its equivalent. In addition, Article 1477 of the same
Code provides that"The ownership of the thing sold shall be transferred to the vendee
upon actual or constructive delivery thereof." While it may be conceded that there was
no constructive delivery of the land soldin the case at bar, as subject Deed of Sale is a
private instrument, it is beyond question that therewas actual delivery thereof. As
found by the trial court, the Dignos spouses delivered the possessionof the land in
question to Jabil as early as March 27,1965 so that the latter constructed thereonSally's
Beach Resort also known as Jabil's Beach Resort in March, 1965; Mactan White Beach
Resorton January 15, J 966 and Bevirlyn's Beach Resort on September 1, 1965. Such facts
were admittedby petitioner spouses.2. No. The contract of sale being absolute
in nature is governed by Article 1592 of the Civil Code. It isundisputed that petitioners
never notified private respondents Jabil by notarial act that they wererescinding the
contract, and neither did they file a suit in court to rescind the sale. There is noshowing
that Amistad was properly authorized by Jabil to make such extra-judicial rescission for
thelatter who, on the contrary, vigorously denied having sent Amistad to tell petitioners
that he wasalready waiving his rights to the land in question. Under Article 1358 of the
Civil Code, it is requiredthat acts and contracts which have for their object
extinguishment of real rights over immovableproperty must appear in a public
document.Petitioners laid considerable emphasis on the fact that private respondent
Jabil had no money onthe stipulated date of payment on September 15,1965 and was
able to raise the necessary amountonly by mid-October 1965. It has been ruled,
however, that where time is not of the essence of theagreement, a slight delay on the
part of one party in the performance of his obligation is not asufficient ground for the
rescission of the agreement. Considering that private respondent has only abalance of
P4,OOO.00 and was delayed in payment only for one month, equity and justice
mandateas in the aforecited case that Jabil be given an additional period within which
to complete paymentof the purchase price.
________________________________________________

JACOBUS BERNHARD HULST v. PR BUILDERS, GR No. 156364, 2008-09-25

Facts:

Petitioner filed the present Motion for Partial Reconsideration[3] insofar as he was ordered to
return to respondent the amount of P2,125,540.00 in excess of the proceeds of the auction sale
delivered to petitioner.

Petitioner contends that the Contract to

Sell between petitioner and respondent involved a condominium unit and did not violate the
Constitutional proscription against ownership of land by aliens. He argues that the contract to
sell will not transfer to the buyer ownership of the land on which the unit is situated;... thus, the
buyer will not get a transfer certificate of title but merely a Condominium Certificate of Title as
evidence of ownership; a perusal of the contract will show that what the buyer acquires is the
seller's title and rights to and interests in the unit and the common... areas.

Issues:

This resolves petitioner's Motion for Partial Reconsideration.

Ruling:

Under Republic Act (R.A.) No. 4726, otherwise known as the Condominium Act, foreign
nationals can own Philippine real estate through the purchase of condominium units or
townhouses constituted under the Condominium principle with Condominium Certificates of
Title.

Where the common areas in a condominium project are held by a corporation, no transfer or
conveyance of a unit shall be valid if the concomitant transfer of the appurtenant... membership
or stockholding in the corporation will cause the alien interest in such corporation to exceed the
limits imposed by existing laws.

The law provides that no condominium unit can be sold without at the same time selling the
corresponding amount of rights, shares or other interests in the condominium management body,
the Condominium Corporation; and no one can buy shares in a Condominium Corporation
without at... the same time buying a condominium unit.

It expressly allows foreigners to acquire condominium units and shares in condominium


corporations up to not more than 40% of the total and outstanding capital stock of a Filipino-
owned or controlled corporation.

Under this set up, the... ownership of the land is legally separated from the unit itself. The land is
owned by a Condominium Corporation and the unit owner is simply a member in this
Condominium Corporation.

____________________________________________

Toyota Shaw vs CA

GR No. 116650 May 23, 1995

Facts:

Sosa wanted to purchase a Toyota Car. She met Bernardo, the sales representative of Toyota.
Sosa emphasized to the sales rep that she needed the car not later than 17 June 1989. They
contracted an agreement on the delivery of the unit and that the balance of the purchase price
would be paid by credit financing. The following day, Sosa delivered the downpayment and a
Vehicle sales proposal was printed. On the day of delivery, Bernardo called Sosa to inform him
that the car could not be delivered. Toyota contends, on the other hand, that the Lite Ace was
not delivered to Sosa because of the disapproval by B.A. Finance of the credit financing
application of Sosa. Toyota then gave Sosa the option to purchase the unit by paying the full
purchase price in cash but Sosa refused. Sosa asked that his down payment be refunded.
Toyota did so on the very same day by issuing a Far East Bank check for the full amount, which
Sosa signed with the reservation, “without prejudice to our future claims for damages.”
Thereafter, Sosa sent two letters to Toyota. In the first letter, she demanded the refund of the
down payment plus interest from the time she paid it and for damages. Toyota refused to the
demands of Sosa.
Issue:
Whether or not there was a perfected contract of sale

Ruling:
What is clear from the agreement signed by Sosa and Gilbert is not a contract of sale. No
obligation on the part of Toyota to transfer ownership of the car to Sosa and no correlative
obligation on the part of Sosa to pay . The provision on the down payment of
PIOO,OOO.OO made no specific reference to a sale of a vehicle. If it was intended for a contract
of sale, it could only refer to a sale on installment basis, as the VSP executed the following day.
Nothing was mentioned about the full purchase price and the manner the installments were to
be paid. An agreement on the manner of payment of the price is an essential element in the
formation of a binding and enforceable contract of sale. This is so because the agreement as to
the manner of payment goes, into the price such that a disagreement on the manner of
payment is tantamount to a failure to agree on the price. Definiteness as to the price is an
essential element of a binding agreement to sell personal property.
_________________________________

SPS. ALFREDO R. EDRADA G.R. No. 154413

and ROSELLA L. EDRADA,

Petitioners, Present:

PUNO, J.,

- versus - Chairman,

AUSTRIA-MARTINEZ ,

CALLEJO, SR.,

TINGA, and

SPS. EDUARDO RAMOS CHICO-NAZARIO, JJ.

and CARMENCITA RAMOS,

Respondents.
Promulgated:

August 31, 2005

x ---------------------------------------------------------------x

DECISION

TINGA, J.:

In this Petition[1] under Rule 45, petitioner Spouses Alfredo


and Rosella Edrada (petitioners) seek the reversal of the Former
Second Division of the Court of Appeals Decision[2] and
Resolution[3] in CA-G.R. CV No. 66375, which affirmed the Decision
of Regional Trial Court (RTC) of Antipolo City, Branch 71,[4] in Civil
Case No. 96-4057, and denied the Motion for Reconsideration[5]
therein.
Respondent spouses Eduardo and Carmencita Ramos
(respondents) are the owners of two (2) fishing vessels, the Lady
Lalaine and the Lady Theresa. On 1 April 1996, respondents and
petitioners executed an untitled handwritten document which lies
at the center of the present controversy. Its full text is reproduced
below:

1st April 1996

This is to acknowledge that Fishing Vessels Lady Lalaine and


Lady Theresa owned by Eduardo O. Ramos are now in my
possession and received in good running and serviceable order. As
such, the vessels are now my responsibility.

Documents pertaining to the sale and agreement of


payments between me and the owner of the vessel to follow. The
agreed price for the vessel is Nine Hundred Thousand Only
(P900,000.00).

(SGD.) (SGD.)
EDUARDO O. RAMOS ALFREDO R. EDRADA
(Seller) (Purchaser)

CONFORME: CONFORME:

(SGD.) (SGD.)
CARMENCITA RAMOS ROSIE ENDRADA[6]
Upon the signing of the document, petitioners delivered to
respondents four (4) postdated Far East Bank and Trust Company
(FEBTC) checks payable to cash drawn by petitioner Rosella
Edrada, in various amounts totaling One Hundred Forty Thousand
Pesos (P140,000.00). The first three (3) checks were honored upon
presentment to the drawee bank while the fourth check for One
Hundred Thousand Pesos (P100,000.00) was dishonored because of
a stop payment order.

On 3 June 1996, respondents filed an action against


petitioners for specific performance with damages before the RTC,
praying that petitioners be obliged to execute the necessary deed of
sale of the two fishing vessels and to pay the balance of the
purchase price. In their Complaint,[7] respondents alleged that
petitioners contracted to buy the two fishing vessels for the agreed
purchase price of Nine Hundred Thousand Pesos (P900,000.00), as
evidenced by the above-quoted document, which according to them
evinced a contract to
buy. However, despite delivery of said vessels and repeated oral
demands, petitioners failed to pay the balance, so respondents
further averred.

Belying the allegations of respondents, in their Answer with


Counterclaim,[8] petitioners averred that the document sued upon
merely embodies an agreement brought about by the loans they
extended to respondents. According to petitioners, respondents
allowed them to manage or administer the fishing vessels as a
business on the understanding that should they find the business
profitable, the vessels would be sold to them for Nine Hundred
Thousand Pesos (P900,000.00). But petitioners decided to call it
quits after spending a hefty sum for the repair and maintenance of
the vessels which were already in dilapidated condition.

After trial, the RTC rendered a Decision[9] dated 22 February


1999, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the


plaintiffs and against the defendants and the latter are ordered to
pay to the former the amount of Eight Hundred Sixty Thousand
Pesos (P860,000.00) with legal interests thereon from June 30,
1996 until fully paid; the amount of P20,000.00 as attorneys fees
and the cost of suit.
The counterclaim of the defendants for moral and exemplary
damages and for attorneys fees is dismissed for lack of merit.

SO ORDERED.[10]

The RTC treated the action as one for collection of a sum of


money and for damages and considered the document as a
perfected contract of sale. On 19 April 1999, petitioners filed a
Motion for Reconsideration which the RTC denied in an Order[11]
dated 2 July 1999.

Both parties appealed the RTC Decision. However, finding no


reversible error in the appealed decision, the Court of Appeals, in its
Decision,[12] affirmed the same and dismissed both appeals. Only
petitioners elevated the controversy to this Court.

Petitioners raised the nature of the subject document as the


primary legal issue. They contend that there was no perfected
contract of sale as distinguished from a contract to sell. They
likewise posed as sub-issues the purpose for which the checks were
issued, whether replacement of the crew was an act of ownership or
administration, whether petitioners failed to protest the dilapidated
condition of the vessels, and whether the instances when the
vessels went out to sea proved that the vessels were not
seaworthy.[13] It is also alleged in the petition that the true
agreement as between the parties was that of a loan.
Evidently, the petition hinges on the true nature of the
document dated 1 April 1996. Normally, the Court is bound by the
factual findings of the lower courts, and accordingly, should affirm
the conclusion that the document in question was a perfected
contract of sale. However, we find that both the RTC and the Court
of Appeals gravely misapprehended the nature of the said
document, and a reevaluation of the document is in order.[14] Even
if such reevaluation would lead the court to examine issues not
raised by the parties, it should be remembered that the Court has
authority to review matters even if not assigned as errors in the
appeal, if it is found that their consideration is necessary in arriving
at a just decision of the case.[15]

In doing so, we acknowledge that the contending parties offer


vastly differing accounts as to the true nature of the agreement.
Still, we need not look beyond the document dated 1 April 1996 and
the stipulations therein in order to ascertain what obligations, if
any, have been contracted by the party. The parol evidence rule
forbids any addition to or contradiction of the terms of a written
agreement by testimony or other evidence purporting to show that
different terms were agreed upon by the parties, varying the purport
of the written

contract. Whatever is not found in the writing is understood to have


been waived and abandoned.[16]
We disagree with the RTC and the Court of Appeals that the
document is a perfected contract of sale. A contract of sale is
defined as an agreement whereby one of the contracting parties
obligates himself to transfer the ownership of and to deliver a
determinate thing, and the other to pay therefore a price certain in
money or its equivalent.[17] It must evince the consent on the part
of the seller to transfer and deliver and on the part of the buyer to
pay.[18]

An examination of the document reveals that there is no


perfected contract of sale. The agreement may confirm the receipt
by respondents of the two vessels and their purchase price.
However, there is no equivocal agreement to transfer ownership of
the vessel, but a mere commitment that documents pertaining to
the sale and agreement of payments[are] to follow. Evidently, the
document or documents which would formalize the transfer of
ownership and contain the terms of payment of the purchase price,
or the period when such would become due and demandable, have
yet to be executed. But no such document was executed and no
such terms were stipulated upon.

The fact that there is a stated total purchase price should not
lead to the conclusion that a contract of sale had been perfected. In
numerous cases,[19] the most recent of which is Swedish Match, AB
v. Court of Appeals,[20] we held that before a valid and binding
contract of sale can exist, the manner of payment of the purchase
price must first be established, as such stands as essential to the
validity of the sale. After all, such agreement on the terms of
payment is integral to the element of a price certain, such that a
disagreement on the manner of payment is tantamount to a failure
to agree on the price.

Assuming arguendo that the document evinces a perfected


contract of sale, the absence of definite terms of payment therein
would preclude its enforcement by the respondents through the
instant Complaint. A requisite for the judicial enforcement of an
obligation is that the same is due and demandable. The absence of
a stipulated period by which the purchase price should be paid
indicates that at the time of the filing of the complaint, the
obligation to pay was not yet due and demandable.

Respondents, during trial, did claim the existence of a period.


Respondent Carmencita Ramos, during cross-examination, claimed
that the supposed balance shall be paid on 30 June 1996.[21] But
how do respondents explain why the Complaint was filed on 3 June
1996? Assuming that the 30 June 1996 period was duly agreed
upon by the parties, the filing of the Complaint was evidently
premature, as no cause of action had accrued yet. There could not
have been any breach of obligation because on the date the action
was filed, the alleged maturity date for the payment of the balance
had not yet arrived.

In order that respondents could have a valid cause of action, it


is essential that there must have been a stipulated period within
which the payment would have become due and demandable. If the
parties themselves could not come into agreement, the courts may
be asked to fix the period of the obligation, under Article 1197 of
the Civil Code.[22] The respondents did not avail of such relief prior
to the filing of the instant Complaint; thus, the action should fail
owing to its obvious prematurity.

Returning to the true nature of the document, we neither could


conclude that a contract to sell had been established. A contract to
sell is defined as a bilateral contract whereby the prospective seller,
while expressly reserving the ownership of the subject property
despite delivery thereof to the prospective buyer, binds himself to
sell the said property exclusively to the prospective buyer upon
fulfillment of the condition agreed upon, that is, full payment of the
purchase price.[23]

A contract is perfected when there is concurrence of the wills


of the contracting parties with respect to the object and the cause of
the contract. In this case, the agreement merely acknowledges that
a purchase price had been agreed on by the parties. There was no
mutual promise to buy on the part of petitioners and to sell on the
part of respondents. Again, the aforestated proviso in the agreement
that documents pertaining to the sale and agreement of payments
between the parties will follow clearly manifests lack of agreement
between the parties as to the terms of the contract to sell,
particularly the object and cause of the contract.

The agreement in question does not create any obligatory force


either for the transfer of title of the vessels, or the rendition of
payments as part of the purchase price. At most, this agreement
bares only their intention to enter into either a contract to sell or a
contract of sale.

Consequently, the courts below erred in ordering the


enforcement of a contract of sale that had yet to come into
existence. Instead, the instant Complaint should be dismissed. It
prays for three reliefs arising from the enforcement of the
document: execution by the petitioners of the necessary deed of sale
over the vessels, the payment of the balance of the purchase price,
and damages. The lower courts have already ruled that damages
are unavailing. Our finding that there is no perfected contract of
sale precludes the finding of any cause of action that would warrant
the granting of the first two reliefs. No cause of action arises until
there is a breach or violation thereof by either party.[24]
Considering that the documents create no obligation to execute or
even pursue a contract of sale, but only manifest an intention to
eventually contract one, we find no rights breached or violated that
would warrant any of the reliefs sought in the Complaint.

WHEREFORE, the petition is GRANTED. The assailed


Decision and Resolution of the Court of Appeals are REVERSED
and SET ASIDE. The case before the Regional Trial Court is ordered
DISMISSED. No pronouncement as to costs.

SO ORDERED.

DANTE O. TINGA Associate


Justice

WE CONCUR:

REYNATO S. PUNO
Associate Justice
Chairman
MA. ALICIA AUSTRIA-MARTINEZ ROMEO J. CALLEJO, SR.
Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in


consultation before the case was assigned to the writer of the
opinion of the Courts Division.

REYNATO S. PUNO
Associate Justice
Chairman, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the


Division Chairmans Attestation, it is hereby certified that the
conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the
Courts Division.

HILARIO G. DAVIDE, JR.


Chief Justice

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