Polytechnic University of the Philippines vs. CA, GR No.

143513, November 14, 2001

Facts of the case

 NDC owned a 10.31-hectare compound in Sta. Mesa, Manila, and leased portions to
Firestone for ceramic manufacturing through three successive leases (1965, 1969, 1978).
 The 1978 lease (A-10-78) expressly included a right of first refusal for Firestone should
NDC decide to sell the leased property.
 In 1988–1989, NDC planned to transfer/sell the property to PUP via Memorandum Order
No. 214, prompting Firestone to assert its contractual right of first refusal and seek
specific performance.
 Firestone argued PUP’s acquisition violated its leasehold and first refusal rights. PUP and
NDC contended the lease had expired or that the transaction was only an administrative
transfer, not a sale.

Issues of the case

 Was the NDC–PUP transaction a valid sale?

 Was Firestone’s right of first refusal enforceable, and what was the proper remedy?

Rationale of the court’s ruling

 Existence of Sale: The NDC–PUP transaction was a valid sale with all essential
elements:
o Consent: Both parties expressed willingness to sell/acquire in Memorandum
Order No. 214.
o Determinate Subject Matter: The NDC compound including leased premises.
o Consideration: Cancellation of NDC’s liabilities to the National Government
(P57,193,201.64).
o Government-owned corporations have separate juridical personalities;
involvement of the Executive Secretary did not alter the validity of the sale.
 Enforceability of Right of First Refusal:
o Firestone’s right of first refusal is integral to the 1978 lease and supported by
valuable consideration embedded in the lease obligations.
o NDC could not sell to PUP without first offering the property to Firestone.
o Right of first refusal is enforceable under civil law and jurisprudence (Equatorial
Realty Development, Inc. v. Mayfair Theater, Inc.), not merely a preparatory
agreement.
 Valuation and Remedy:
o Courts set the price at P1,500/sqm (market value admitted by Firestone).
o Ground survey to verify actual leased area; Firestone given six months to exercise
the right.
.
 Romero vs. CA, GR No. 107207, November 23, 1995
Facts of the case
 Petitioner, Romero R. Vergilio a civil engineer was engage in business of production of
perlite filter aids.
 Respondent, Enriqueta Chua vda. de Ongsiong owner of 1 parcel of land measuring
1,952sqm, located in Barangay San Dionisio, Parañaque, Metro Manila.
 On June 09,1988 both parties entered into a Contract of Conditional Sale wherein the the
vendee make a downpayment of ₱50,000 upon signing for eviction of squatter’s price set
at ₱800/sqm (₱1,561,600 total), within 60 days, the remaining balance of ₱1,511,600
payable within 45 days after eviction.
 Failure of vendor to evict the squatter’s within 60days is subject to reimbursement of
₱50,000, if Failure of vendee to pay for remaining balance within 45 days after eviction
of the squatters would forfeit the ₱50,000 to vendor.
 Seller failed to evict within the stipulated period. Romero waived the condition and
tendered payment, but seller declared the contract void and sought rescission.
 RTC ruled in favor of Romero, holding only the buyer could rescind. CA reversed,
declaring the contract cancelled and ordering return of ₱50,000.

Issue of the case

 Can the vendor (seller) demand rescission of the contract for her own failure to evict
squatters within the stipulated period?
 Whether the downpayment of ₱50,000 is reimbursable or forfeitable given the non-
eviction of the squatters.
Rationale of the court’s ruling
 The Supreme Court held that rescission under Article 1191 of the Civil Code is a remedy
for the injured party, not the party who caused the breach. Since the seller failed to
perform her obligation (eviction of squatters), she cannot invoke rescission. Romero, as
the buyer, validly waived the condition and remained willing to pay the balance. The
contract must be enforced.
 Article 1545 of Civil Code Where the obligation of either party to a contract of sale is
subject to any condition which is not performed, such party (here, the vendee) may refuse
to proceed with the contract or he may waive performance of the condition.
 Under Article 1191, only the party aggrieved by the other’s breach may rescind, vendor’s
failure to evict is her own breach. Petitioner’s waiver of the condition and tender of
payment preclude rescission and forfeiture of downpayment.

Sanchez vs. Mapalad Realty Corp, GR No. 148516, December 27, 2007
Facts of the case

 Mapalad Realty’s sequestered titles disappeared in 1992, and evidence suggested former
GM Felicito Manalili took the owner’s duplicates; soon after, Nordelak claimed
ownership based on a 1989 deed of sale allegedly signed by Miguel Magsaysay as
Mapalad’s president even though his corporate ties ended in 1982.
 The Register of Deeds canceled Mapalad’s titles and issued new titles to Nordelak using
two conflicting deeds (same date and notarial entry but different consideration amounts),
despite Mapalad and PCGG warnings and annotations.
 Magsaysay denied signing the deeds, and Mapalad filed a 1993 suit to annul the supposed
sale; a lis pendens was annotated, yet Nordelak still sold the properties in 1994 to Manuel
Luis Sanchez for ₱50 million.
 The RTC dismissed Mapalad’s complaint, upheld the deed(s) as valid, and canceled the
annotations, ruling Nordelak was a buyer in good faith.
 The Court of Appeals reversed, declaring both the 1989 deeds and the 1994 Nordelak to
Sanchez sale null and void for fraud, ordering reconveyance to Mapalad, and citing:
Magsaysay was not president in 1989, suspicious timing of registration, missing notarial
records, lack of proof of payment, and Nordelak’s failure to present key witnesses for the
transaction.
 Sanchez elevated the case to the Supreme Court, arguing the CA contradicted RTC
factual findings that Nordelak was a buyer in good faith, while the OSG questioned
whether Sanchez could raise factual issues in a petition.

Issue of the case

 Whether a valid contract of sale ever existed between Mapalad and Nordelak.
 Whether Manuel Luis S. Sanchez, as transferee pendente lite with notice of lis pendens,
acquired a valid title despite the defect in Nordelak’s title.

Rationale of the court ruling

 The Supreme Court ruled that although factual findings of the Court of Appeals are
generally binding, it may review them when exceptions apply such as contradictory
findings, speculation, grave abuse of discretion, misapprehension or failure to notice
relevant facts, or conclusions unsupported by evidence.
 The November 2, 1989 deed is void ab initio and voidable for lack of authority/capacity
to give consent on behalf of the corporation and lack of consideration for no proof of
payment, rendering the sale fictitious.
 As transferee pendente lite, Sanchez stands in Nordelak’s shoes and, given the lis
pendens notice, cannot claim better title (nemo dat quod non habet) Hindi maibibigay ng
isang tao ang hindi kanya.

Robern Development Corp. vs. People’s Landless Assoc., GR No. 173622, March 11, 2013
Facts of the Case

 Al-Amanah Bank owned a 2,000-sqm property in Davao City occupied by members of

People’s Landless Association (PELA).
 March 18, 1993: PELA offered to buy the lot for ₱300,000 with a ₱150,000 down
payment; the bank merely annotated that the offer would be processed upon payment.
 Apr–May 1993: PELA deposited ₱150,000, which the Branch OIC (Dalig) later clarified
were bid/offer deposits, not earnest money.
 The bank’s Head Office never approved PELA’s offered price, considered it too low, and
did not communicate acceptance to PELA.
 Dec. 1993–Apr. 1994: Al-Amanah approved Robern Development Corporation’s higher
offer (₱400,000), executed a Deed of Sale, and issued a new TCT in Robern’s name.
 July 1994: PELA filed suit claiming a perfected sale with the bank, seeking cancellation
of Robern’s title.
 RTC (1999): Dismissed PELA’s complaint.
 CA (2005): Reversed RTC; declared PELA’s contract valid and nullified Robern’s title.
 SC (2013): Robern elevated the matter to the Supreme Court.
Issue of the case
 Whether a perfected contract of sale existed between PELA and Al-Amanah Bank that
would invalidate the subsequent sale to Robern.
Rationale of the court’s ruling
 The Supreme Court concluded there was no perfected contract of sale between PELA and
Al Amanah for lack of concurrence on price and lack of communicated acceptance. The
negotiations between PELA and the bank remained in the negotiation stage.
 The petition was PARTIALLY GRANTED: the Court ANNULLED and SET ASIDE the
CA Decision except for paragraph 6 (the CA’s award of damages to PELA against Al
Amanah), which had already become final and executory. The RTC Decision of August
10, 1999 dismissing PELA’s complaint was REINSTATED and AFFIRMED.
 A bank officer’s receipt of an offer and deposit does not amount to corporate acceptance
when approval must come from the Head Office or board. Deposits labeled as bid or
processing deposits do not prove a perfected sale. A contract of sale is perfected only
upon clear communication of acceptance, and if such acceptance is absent, a later sale to
another buyer may validly stand.

Balatbat vs. CA, GR No. 109410, August 28, 1996

Facts of the Case
  In a 1977 partition suit, the trial court in 1979 adjudicated shares over the conjugal
property of Aurelio Roque and his deceased wife, resulting in the issuance of TCT No.
135671 on October 5, 1979.
 On April 1, 1980, Roque sold his 6/10 share to spouses Jose and Aurora Repuyan (private
respondents). They received the owner’s duplicate title and later caused the annotation of
an adverse claim (July 21, 1980).
 Roque filed a rescission action on August 20, 1980 for alleged nonpayment, but on April
15, 1986 the court dismissed the complaint and declared the sale valid and enforceable,
the decision became final.
 Meanwhile, through a court ordered partition sale on February 4, 1982 (under Rule 39,
Sec. 10), the entire property including Roque’s 6/10 share was conveyed to Clara
Balatbat, who obtained a writ of possession in 1982.
 Balatbat later filed a separate action for delivery of the title. The RTC (1990) dismissed
her complaint and upheld the Repuyan counterclaim, the CA (1992) affirmed with
modification.
 Petitioner sought review under Rule 45, claiming lack of consummation of the 1980 sale,
absence of a true double sale, her good faith, and CA reliance on unoffered evidence.
Issues of the Case
 Was the April 1, 1980 sale to the private respondents merely executory or was it
consummated?
 Did a double sale occur under Article 1544 of the Civil Code?
 Was petitioner Balatbat a buyer in good faith and for value?
 Did the CA be mistaken in considering evidence allegedly not formally offered?
Rationale of the court’s ruling

 The April 1, 1980 sale to the Repuyans was valid and consummated, since a public
instrument and delivery of the owner’s duplicate title constituted constructive delivery
under Article 1498, the rescission case judgment confirming its validity was already final.
 A double sale existed, but under Article 1544, the Repuyans had priority because they
first recorded their right through an adverse claim annotated on the title in July 1980.
 Petitioner was not a buyer in good faith, as the annotated adverse claim and pending
litigation created constructive notice and imposed a duty of inquiry that she failed to
exercise.
 The CA committed no evidentiary error, as it relied on public records and a final
judgment properly considered in resolving ownership and priority.

Gaite vs. Fonacier, GR No. L-11827, July 31, 1961

Facts of the Case
  Fonacier authorized Gaite to develop and exploit the Dawahan Group mining claims.
After extracting an estimated 24,000 tons of iron ore, Fonacier revoked Gaite’s authority.
 On Dec. 8, 1954, the parties executed the Revocation and Contract (Exh. A), where Gaite
transferred rights, improvements, and the extracted ore to Fonacier for ₱75,000 (₱10,000
paid; ₱65,000 payable from the first shipment or first local sale of ore).
 To secure the ₱65,000 balance, Fonacier provided two bonds: one with private sureties
(Exh. A-1) and another with Far Eastern Surety (Exh. B), which expired on Dec. 8, 1955.
 No shipment or sale occurred before the bond expired. Gaite demanded payment and
sued. The trial court held the ₱65,000 due and demandable and found the ore quantity
substantially met. Defendants appealed.

Issue of the Case

 Whether the ₱65,000 balance became due upon the expiration of the surety bond (Dec. 8,
1955).
 Whether the estimated 24,000 tons of iron ore actually existed in the stockpiles.

Rationale of the court’s ruling

 The payment clause created a term, not a suspensive condition.

The obligation to pay already existed, shipment or sale merely fixed the maturity. The
clause did not make payment dependent on an uncertain event, especially since the buyer
controlled the shipment/sale.
 Defendants forfeited the benefit of the term under Article 1198, Civil Code.
By allowing the surety bond (Exh. B) to expire without replacement, they impaired the
security required by Gaite. Loss or non-renewal of promised guaranties makes the debt
immediately demandable.
 Quantity dispute resolved in Gaite’s favor; no fraud or short-delivery.
Expert evidence showed the stockpile contained roughly 21,800+ tons, reasonably close
to the “24,000 tons, more or less.” Because the contract was for a specific mass for a
lump sum, Gaite needed only to deliver the entire mass in good faith.
 Appellants’ counterclaim failed; alleged deficiency not proven.
Estimates varied only due to measurement factors; no withholding or misrepresentation
was shown.
 Result, the obligation was due, defendants were jointly and severally liable for ₱65,000
plus interest from Dec. 9, 1955.
 The Supreme Court affirmed the trial court’s judgment ordering Fonacier and his sureties
to pay ₱65,000 with legal interest and costs, and denied ancillary motions.

Aznar vs. Yapdiangco, GR No. L-18536, March 31, 1965

Facts of the Case
Teodoro Santos agreed to sell his Ford Fairlane 500 to Vicente Marella, who requested that
registration be transferred first. After executing a deed of sale and registering the car in Marella’s
name, the purchase price was never paid. Through fraud, Marella obtained both the vehicle and
the registration papers, disappeared, and sold the car the same day to Jose B. Aznar for P15,000.
Santos reported the fraud and claimed ownership. Aznar sued for replevin; Santos intervened.
The trial court held Aznar acted in good faith but still awarded the car to Santos under Article
559.
Issues of the Case
 Who has the superior right of possession: the original owner (Santos) or the good-faith
purchaser (Aznar)?
 Which provision governs: Article 559 (owner unlawfully deprived may recover) or
Article 1506 (buyer in good faith from one with voidable title)?
Rationale of the court’s ruling

 Article 559 governs because Santos was unlawfully deprived of the car through fraud;
under this rule, an owner may recover a movable even from a good-faith purchaser,
except when acquired in a public sale (not applicable here).
 Article 1506 does not apply, since Marella never had a voidable title—he had no title at
all; the sale to him was not consummated due to absence of valid delivery (tradition)
under Article 712.
 No lawful delivery occurred: the brief possession obtained through deceit did not
constitute tradition with intent to transfer ownership; hence Marella could not pass
ownership to Aznar.
 Equitable defenses rejected: Santos misplaced confidence or alleged negligence cannot
defeat the explicit statutory protection of Article 559, which overrides common-law
maxims on loss allocation.
 The Supreme Court affirmed the trial court: Teodoro Santos has the superior right to the
automobile. Aznar’s appeal was dismissed with costs against him.

Agro Conglomerates, Inc. vs. CA, GR No. 117660, December 18, 2000
Facts of the Case
  Agro Conglomerates sold parcels of land to Wonderland for P5,000,000, payable in cash,
shares, and installments. An Addendum allowed Wonderland to avoid immediate cash
payment by having the vendor secure a loan, which Wonderland would assume.
 Petitioners executed promissory notes in the vendor’s name, received loan proceeds, but
did not pay when due. Regent, as creditor, filed consolidated actions to recover the
amounts due.
 Petitioners argued novation by substitution of debtor, claiming the Addendum shifted
liability to Wonderland.

Issues of the Case

 Whether the Addendum constituted a novation by substitution of debtor, thereby relieving
petitioners from liability on the promissory notes.
Rationale of the court’s ruling

 Petitioners acted as accommodation parties/sureties, lending their names to Wonderland

without receiving proceeds for themselves; under Section 29, Negotiable Instruments
Law, they are liable to the holder for value.
 Novation by substitution of debtor did not occur: the Addendum modified the contract of
sale but did not extinguish any prior obligation to the bank; novation must be clear and
unequivocal.
 Rescission of sale does not absolve petitioners: they retained loan proceeds without legal
ground; Civil Code Sec. 22 requires return of benefits acquired at another’s expense.
 Liability remains regardless of Wonderland’s obligations: petitioners could have
impleaded Wonderland for indemnity, but failure to do so does not bar the creditor’s
action against accommodation parties.
 The Supreme Court affirmed the Court of Appeals: petitioners are jointly and severally
liable to Regent; petition for review denied with costs.