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ARTATES VS. URBI

As thus prescribed by law, for a period of five years from the date of the

government grant, lands acquired by free or homestead patent shall not only

be incapable of being encumbered or alienated except in favor of the

government itself or any of its institutions or of duly constituted banking

corporations, but also, they shall not be liable to the satisfaction of any debt

contracted within the said period, whether or not the indebtedness shall

mature during or after the prohibited time. This provision against the

alienation or encumbrance of public lands granted within five years from the

issuance of the patent, it has been held, is mandatory; a sale made in

violation thereof is null and void and produces no effect whatsoever. Though

it may be a limitation on the right of ownership of the grantee, the salutary

purpose of the provision cannot be denied. The word "debt" in exemption

statutes,- in its wider sense, (it) includes all that is due to a man under any

form or obligation or promise, and covers not only obligations arising under

contract, but also those imposed by law without contract. Considering the

protective policy of the law, it becomes apparent that "debt contracted" was

used in it in the sense of "obligation incurred,"

CONCRETE AGREGATES VS. COURT OF TAX APPEALS

Selling or distribution is an essential ingredient of manufacturing. The sale of

a manufactured product is properly incident to manufacture. The power to

sell is an indispensable adjunct to a manufacturing business. Petitioner, as a

manufacturer, not only manufactures the finished articles but also sells or

distributes them to others. It is still good law that a contract to make is acontract of sale if the article is already substantially in existence at the time

of the order and merely requires some alteration, modification or adaptation

to the buyer's wishes or purposes. A contract for the sale of an article which

the vendor in the ordinary course of his business manufactures or procures

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for the general market, whether the same is on hand at the time or not is a

contract for the sale of goods.

DIGNOS VS. CA

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 the property sold is reserved in the

vendor until full payment of the purchase price, nor is there a stipulation

giving the vendor the right to unilaterally rescind the contract the moment

the vendee fails to pay within a fixed period

HEIRS OF ENRIQUE ZAMBALES VS. CA

The law prohibiting any transfer or alienation of homestead land within five

years from the issuance of the patent does not distinguish between

executory and consummated sales; and it would hardly be in keeping with

the primordial aim of this prohibition to preserve and keep in the family of

the homesteader the piece of land that the state had gratuitously given to

them, to hold valid a homestead sale actually perfected during the period of

prohibition but with the execution of the formal deed of conveyance and the

delivery of possession of the land sold to the buyer deferred until after the

expiration of the prohibitory period, purposely to circumvent the very law

that prohibits and declares invalid such transaction to protect the

homesteader and his family.

LIMKETKAI SONS VS. CAThe contract of sale is perfected at the moment there is a meeting of minds

upon the thing which is the object of the contract and upon the price. From

that moment, the parties may reciprocally demand performance, subject to

the provisions of the law governing the form of contracts. Consent is

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manifested by the meeting of the offer and the acceptance upon the thing

and the cause which are to constitute the contract. The offer must be certain

and the acceptance absolute. A qualified acceptance constitutes a counter-

offer. "An acceptance may be express or implied." It is true that an

acceptance may contain a request for certain changes in the terms of the

offer and yet be a binding acceptance. "So long as it is clear that the

meaning of the acceptance is positively and unequivocally to accept the

offer, whether such request is granted or not, a contract is formed." the

vendor's change in a phrase of the offer to purchase, which change does not

essentially change the terms of the offer, does not amount to a rejection of

the offer and the tender or a counter-offer.

PEOPLES HOMESITE VS. CA

"The contract of sale is perfected at the moment there is a meeting of minds

upon the thing which is the object of the contract and upon the price. From

that moment, the parties may reciprocally demand performance, subject to

the law governing the form of contracts." "In conditional obligations, the

acquisition of rights, as well as the extinguishment or loss of those already

acquired, shall depend upon the happening of the event which constitutes

the condition.

QUIROGA VS. PARSONS HARDWARE CO.

In order to classify a contract, due regard must be given to its essential

clauses. In the contract in question, what was essential, as constituting its

cause and subject matter, is that the plaintiff was to furnish the defendantwith the beds which the latter might order, at the price stipulated, and that

the defendant was to pay the price in the manner stipulated. There was the

obligation on the part of the plaintiff to supply the beds, and, on the part of

the defendant, to pay their price. These features exclude the legal

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conception of an agency or order to sell whereby the mandatory or agent

received 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. By virtue of the

contract between the plaintiff and the defendant, the latter, on receiving the

beds, was necessarily obliged to pay their price within the term fixed,

without any other consideration and regardless as to whether he had or had

not sold the beds.

TOYOTA VS. CA

It is not a contract of sale. No obligation on the part of Toyota to transfer

ownership of a determinate thing to Sosa and no correlative obligation on

the part of the latter to pay therefor a price certain appears therein. A

definite 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.

CAMACHO VS. CA

In general, there are three (3) essential requisites for a valid

contract:(1) consent of the contracting parties; (2) an object certain which is

the subject of the contract; and (3) the cause of the obligation which is

established.

The object of the contract Is still certain despite the parties Failure to

indicate the specific Portion of the property to be Given as compensation for

services

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Article 1349.The object of every contract must be determinate as to its

kind. The fact that the quantity is not determinate shall not be an

obstacle to the existence of the contract, provided it is possible to

determine the same, without the need of a new contract between the

parties.

x x x x

Article 1460.A thing is determinate when it is particularly designated

and/or physically segregated from all others of the same class. The

requisite that a thing be determinate is satisfied if at the time the

contract is entered into, the thing is capable of being made

determinate without the necessity of a new or further agreement

between the parties.

In this case, the object of the contract is the 5,000-sq-m portion of Lot 261,

Balanga Cadastre. The failure of the parties to state its exact location in the

contract is of no moment; this is a mere error occasioned by the parties

failure to describe with particularity the subject property, which does not

indicate the absence of the principal object as to render the contract

void.[52]Since Camacho bound herself to deliver a portion of Lot261 to Atty.

Banzon, the description of the property subject of the contract is sufficient to

validate the same.

SANDEJAS VS. LINA

In a contract to sell, the payment of the purchase price is a positive

suspensive condition. The vendor's obligation to convey the title does not

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become effective in case of failure to pay. On the other hand, the agreement

between Eliodoro Sr. and respondent is subject to a suspensive condition --

the procurement of a court approval, not full payment. There was no

reservation of ownership in the agreement. When a contract is subject to a

suspensive condition, its birth or effectivity can take place only if and when

the condition happens or is fulfilled. Thus, the intestate court's grant of the

Motion for Approval of the sale filed by respondent resulted in petitioners'

obligation to execute the Deed of Sale of the disputed lots in his favor. The

condition having been satisfied, the contract was perfected. Henceforth, the

parties were bound to fulfil what they had expressly agreed upon.

COMMISSIONER OF INTERNAL REVENUE VS. CA

It is also well to stress that the questioned transactions of Ateneos Institute

of Philippine Culture cannot be deemed either as a contract of sale or a

contract for a piece of work. By the contract of sale, one of the contracting

parties obligates himself to transfer the ownership of and to deliver a

determinate thing, and the other to pay therefor a price certain in money or

its equivalent.16By its very nature, a contract of sale requires a transfer of

ownership. Thus, Article 1458 of the Civil Code expressly makes the

obligation to transfer ownership as an essential element of the contract of

sale. In the case of a contract for a piece of work, the contractor binds

himself to execute a piece of work for the employer, in consideration of a

certain price or compensation.x x x If the contractor agrees to produce the

work from materials furnished by him, he shall deliver the thing produced to

the employer and transfer dominion over the thing.x x x. Ineludably,whether the contract be one of sale or one for a piece of work, a transfer of

ownership is involved and a party necessarily walks away with an

object.19In the case at bench, it is clear from the evidence on record that

there was no sale either of objects or services because, as adverted to

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earlier, there was no transfer of ownership over the research data obtained

or the results of research projects undertaken by the Institute of Philippine

Culture.

LAFORTEZA VS. MACHUCA

The six-month period during which the respondent would be in possession of

the property as lessee, was clearly not a period within which to exercise an

option. An option is a contract granting a privilege to buy or sell within an

agreed time and at a determined price. An option contract is a separate and

distinct contract from that which the parties may enter into upon the

consummation of the option.13 An option must be supported by

consideration. An option contract is governed by the second paragraph of

Article 1479 of the Civil Code. In the present case, the six-month period

merely delayed the demandability of the contract of sale and did not

determine its perfection for after the expiration of the six-month period,

there was an absolute obligation on the part of the petitioners and the

respondent to comply with the terms of the sale. The fact that after the

expiration of the six-month period, the respondent would retain possession

of the house and lot without need of paying rentals for the use therefor,

clearly indicated that the parties contemplated that ownership over the

property would already be transferred by that time.

The issuance of the new certificate of title in the name of the late Francisco

Laforteza and the execution of an extrajudicial settlement of his estate was

not a condition which determined the perfection of the contract of sale.

Petitioners contention that since the condition was not met, they no longerhad an obligation to proceed with the sale of the house and lot is

unconvincing. The petitioners fail to distinguish between a condition imposed

upon the perfection of the contract and a condition imposed on the

performance of an obligation. Failure to comply with the first condition

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results in the failure of a contract, while the failure to comply with the

second condition only gives the other party the option either to refuse to

proceed with the sale or to waive the condition.

ONAPAL VS. CA

Article 1462 of the New Civil Code does not govern this case because the

said provision contemplates a contract of sale of specific goods where one of

the contracting parties binds himself to transfer the ownership of and deliver

a determinate thing and the other to pay therefore a price certain in money

or its equivalent. The said article requires that there be delivery of goods,

actual or constructive, to be applicable. In the transaction in question, there

was no such delivery; neither was there any intention to deliver a

determinate thing. The transaction is not what the parties call it but what

the law defines it to be.

ORDEN VS. AUREA

A contract to sell is akin to a conditional sale, in which the efficacy or

obligatory force of the vendor's 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. One form of conditional sale is what is now

popularly termed as a "Contract to Sell," in which ownership or title is

retained until the fulfillment of a positive suspensive condition, normally the

payment of the purchase price in the manner agreed upon. The distinctionbetween a contract of sale and a contract to sell is well-settled. In a contract

of sale, the title to the property passes to the vendee upon the delivery of

the thing sold; in a contract to sell, ownership is, by agreement, reserved to

the vendor and is not to pass to the vendee until full payment of the

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purchase price. Otherwise stated, in a contract of sale, the vendor loses

ownership over the property and cannot recover it until and unless the

contract is resolved or rescinded; whereas, in a contract to sell, title is

retained by the vendor until full payment of the price. In the latter contract,

payment of the price is a positive suspensive condition, failure of which is

not a breach but an event that prevents the obligation of the vendor to

convey title from becoming effective. In the case at bar, we find that

petitioners Orden and respondents Cobile entered into a contract to sell. The

real character of the contract is not the title given, but the intention of the

parties. Although there is a document denominated as "Deed of Absolute

Sale," and there is no provision therein of reservation of ownership to the

seller, we are persuaded that the true intent of the parties was to transfer

the ownership of the properties only upon the buyer's full payment of the

purchase price. This is evident from the promissory note executed by

respondents Cobile. It is only upon payment of the full purchase price that

title to the properties shall be transferred to their names.

FILIPINAS INVESTMENT VS. VITUGUnder pars. 5 and 9 of the amended complaint, the writ of replevin was

obtained in the instant case for purposes of foreclosure of mortgage. In

applying for a writ of replevin, the plaintiff thereby made his choice, namely,

to foreclose the mortgage covering said automobile; and having accepted

said automobile from defendant Julian R. Vitug, Jr., what remains is for the

plaintiff to sell said automobile through either a judicial or an extrajudicial

foreclosure of said mortgage, without benefit of a deficiency judgment ordeficiency collection ... should the proceeds of the foreclosure sale be less

than the balance of the installment sale price of said automobile due and

collectible.

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ABALOS VS. MACATANGAY

As a rule, the holder of the option, after accepting the promise and before he

exercises his option, is not bound to buy. He is free either to buy or not to

buy later. An accepted unilateral promise to sell, the promissor is not bound

by his promise and may, accordingly, withdraw it, since there may be no

valid contract without a cause or consideration. Pending notice of its

withdrawal, his accepted promise partakes of the nature of an offer to sell

which, if acceded or consented to, results in a perfected contract of sale.

Even conceding for the nonce that respondent had accepted the offer within

the period stated and, as a consequence, a bilateral contract of purchase

and sale was perfected, the outcome would be the same. To benefit from

such situation, respondent would have to pay or at least make a valid tender

of payment of the price for only then could he exact compliance with the

undertaking of the other party.

CHRYSLER VS. CA

Sambok, Bacolod, cannot be faulted for not accepting or refusing to accept

the shipment from Negros Navigation four years after shipment. The

evidence is clear that Negros Navigation could not produce the merchandise

nor ascertain its whereabouts at the time Sambok, Bacolod, was ready to

take delivery. Where the seller delivers to the buyer a quantity of goods less

than he contracted to sell, the buyer may reject them.

NORKIS DISTRIBUTORS INC. VS. CA

The issuance of a sales invoice does not prove transfer of ownership of thething sold to the buyer. An invoice is nothing more than a detailed statement

of the nature, quantity and cost of the thing sold and has been considered

not a bill of sale. In all forms of delivery, it is necessary that the act of

delivery whether constructive or actual, be coupled with the intention of

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delivering the thing. The act, without the intention, is insufficient. When the

motorcycle was registered by Norkis in the name of private respondent,

Norkis did not intend yet to transfer the title or ownership to Nepales, but

only to facilitate the execution of a chattel mortgage in favor of the DBP for

the release of the buyer's motorcycle loan.

PCI LEASING VS. GIRAFFE INC.

The PCI LEASING- GIRAFFE lease agreement is in reality a lease with an

option to purchase the equipment. This has been made manifest by the

actions of the petitioner itself, foremost of which is the declarations made in

its demand letter to the respondent. There could be no other explanation

than that if the respondent paid the balance, then it could keep the

equipment for its own; if not, then it should return them. This is clearly an

option to purchase given to the respondent. Being so, Article 1485 of the

Civil Code should apply. In choosing, through replevin, to deprive the

respondent of possession of the leased equipment, the petitioner waived its

right to bring an action to recover unpaid rentals on the said leased items.

The remedies provided for in Article 1484 of the Civil Code are alternative,

not cumulative. The exercise of one bars the exercise of the others. This

limitation applies to contracts purporting to be leases of personal property

with option to buy by virtue of the same Article 1485. The condition that the

lessor has deprived the lessee of possession or enjoyment of the thing for

the purpose of applying Article 1485 was fulfilled in this case by the filing by

petitioner of the complaint for a sum of money with prayer for replevin to

recover possession of the office equipment. By virtue of the writ of seizureissued by the trial court, the petitioner has effectively deprived respondent

of their use, a situation which, by force of the Recto Law, in turn precludes

the former from maintaining an action for recovery of accrued rentals or the

recovery of the balance of the purchase price plus interest.

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ROMAN VS. GRIMALIT

A sale shall be considered perfected and binding as between vendor and

vendee when they have agreed as to the thing which is the object of the

contract and as to the price, even though neither has been actually

delivered. Ownership is not considered transmitted until the property is

actually delivered and the purchaser has taken possession of the value and

paid the price agreed upon, in which case the sale is considered perfected.

When the sale is made by means of a public instrument the execution

thereof shall be equivalent to the delivery of the thing which is the object of

the contract. The sale of the schooner was not perfected and the purchaser

did not consent to the execution of the deed of transfer for the reason that

the title of the vessel was in the name of one Paulina Giron and not in the

name of Pedro Roman, the alleged owner. Roman promised, however, to

perfect his title to the vessel, but he failed to do so. The papers presented

by him did not show that he was the owner of the vessel. If no contract of

sale was actually executed by the parties the loss of the vessel must be

borne by its owner and not by a party who only intended to purchase it and

who was unable to do so on account of failure on the part of the owner to

show proper title to the vessel and thus enable them to draw up the contract

of sale.

SANCHEZ VS. RIGOS

An option is unilateral: a promise to sell at the price fixed whenever the

offeree should decide to exercise his option within the specified time. Afteraccepting the promise and before he exercises his option, the holder of the

option is not bound to buy. He is free either to buy or not to buy later. In

this case, however, upon accepting herein petitioner's offer a bilateral

promise to sell and to buy ensued, and the respondent ipso facto assumed

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the obligation of a purchaser. He did not just get the right subsequently to

buy or not to buy. It was not a mere option then; it was a bilateral contract

of sale. Since there may be no valid contract without a cause or

consideration, the promisor is not bound by his promise and may,

accordingly, withdraw it. Pending notice of its withdrawal, his accepted

promise partakes, however, of the nature of an offer to sell which, if

accepted, results in a perfected contract of sale.

SERRA VS. CA

A promise to buy and sell a determinate thing for a price certain is

reciprocally demandable. An accepted unilateral promise to buy and sell a

determinate thing for a price certain is binding upon the promisor if the

promise is supported by a consideration distinct from the price. The first is

the mutual promise and each has the right to demand from the other the

fulfillment of the obligation. While the second is merely an offer of one to

another, which if accepted, would create an obligation to the offeror to make

good his promise, provided the acceptance is supported by a consideration

distinct from the price. An accepted unilateral promise to buy and sell a

determinate thing for a price certain is binding upon the promisor if the

promise is supported by a consideration distinct from the price. In a

unilateral promise to sell, where the debtor fails to withdraw the promise

before the acceptance by the creditor, the transaction becomes a bilateral

contract to sell and to buy, because upon acceptance by the creditor of the

offer to sell by the debtor, there is already a meeting of the minds of the

parties as to the thing which is determinate and the price which is certain. Inwhich case, the parties may then reciprocally demand performance.

SOUTHERN MOTORS VS. MOSCOSO

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By praying that the defendant be ordered to pay it the sum of P4,690.00

together with the stipulated interest of 12% per annum from 17 March 1954

until fully paid, plus 10% of the total amount due as attorney's fees and cost

of collection, the plaintiff elected to exact the fulfillment of the obligation,

and not to foreclose the mortgage on the truck. Otherwise, it would not have

gone to court to collect the amount as prayed for in the complaint. Had it

elected to foreclose the mortgage on the truck, all the plaintiff had to do was

to cause the truck to be sold at public auction pursuant to section 14 of the

Chattel Mortgage Law. Since herein appellee has chosen to exact the

fulfillment of the appellant's obligation, it may enforce execution of the

judgment that may be favorably rendered hereon, on all personal and real

properties of the latter not exempt from execution sufficient to satisfy such

judgment. It should be noted that a house and lot at San Jose, Antique were

also attached. No one can successfully contest that the attachment was

merely an incident to an ordinary civil action. The mortgage creditor may

recover judgment on the mortgage debt and cause an execution on the

mortgaged property and may cause an attachment to be issued and levied

on such property, upon beginning his civil action.

SPOUSES DIJAMCO VS. CA

We distinguish between a contract of sale in which title passes to the buyer

upon delivery of the thing sold and a contract to sell where, by agreement,

the ownership is reserved by the seller till full payment of the purchase

price. Thus:

a. In a contract of sale, non-payment of the price is a negative resolutorycondition.

In a contract to sell, full payment is a positive suspensive condition.

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b. In a contract of sale, the vendor has lost and cannot recover the

ownership of the thing sold until and unless the contract of sale is itself

resolved and set aside.

In a contract to sell, the title remains in the vendor if the vendee does not

comply with the condition precedent of making payment at the time

specified in the contract. If the vendor, because of non-compliance with the

suspensive condition stipulated, seeks to eject the buyer form the land

object of the agreement, said vendor is enforcing the contract and is not

resolving the same. Although petitioners paid six months interest until

January 1987, they did not exercise their right to purchase the property

during that period. Neither did they keep on paying the monthly interest as

consideration for the continuation of their option right for the next six

months. Hence, the automatic revocation clause of the agreement took

effect, resulting in the rescission of the contract of option to purchase and

the contract to sell by respondent bank. A judicial action for the rescission of

a contract is not necessary where the contract provides that it may be

revoked and cancelled for violation of any of its terms and conditions.

UNION MOTORS VS. CA

The issuance of a sales invoice does not prove transfer of ownership of the

thing sold to the buyer; an invoice is nothing more than a detailed statement

of the nature, quantity and cost of the thing sold and has been considered

not a bill of sale. The registration certificate signed by the respondent

spouses does not conclusively prove that constructive delivery was made nor

that ownership has been transferred to the respondent spouses. Like thereceipt and the invoice, the signing of the said documents was qualified by

the fact that it was a requirement of petitioner for the sale and financing

contract to be approved. In all forms of delivery, it is necessary that the act

of delivery, whether constructive or actual, should be coupled with the

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intention of delivering the thing. The act, without the intention, is

insufficient. The critical factor in the different modes of effecting delivery

which gives legal effect to the act, is the actual intention of the vendor to

deliver, and its acceptance by the vendee. Without that intention, there is no

tradition. The Code imposes upon the vendor the obligation to deliver the

thing sold. The thing is considered to be delivered when it is placed in the

hands and possession of the vendee. (Civil Code, Art. 1462). It is true that

the same article declares that the execution of a public instrument is

equivalent to the delivery of the thing which is the object of the contract,

but, in order that this symbolic delivery may produce the effect of tradition,

it is necessary that the vendor shall have had control over the thing sold

that, at the moment of the sale, its material delivery could have been made.

It is not enough to confer upon the purchaser the ownership and the right of

possession. The thing sold must be placed in his control. When there is no

impediment whatever to prevent the thing sold passing into the tenancy of

the purchaser by the sole will of the vendor, symbolic delivery through the

execution of a public instrument is sufficient. But if, notwithstanding the

execution of the instrument, the purchaser cannot have the enjoyment and

material tenancy of the thing and make use of it himself or through another

in his name, because such tenancy and enjoyment are opposed by the

interposition of another will, then fiction yields to reality-the delivery has not

been effected.

SAN LORENZO DEVT VS. CA

A purchaser in good faith is one who buys property of another without noticethat some other person has a right to, or interest in, such property and pays

a full and fair price for the same at the time of such purchase, or before he

has notice of the claim or interest of some other person in the

property. Following the foregoing definition, we rule that SLDC qualifies as a

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buyer in good faith since there is no evidence extant in the records that it

had knowledge of the prior transaction in favor of Babasanta. At the time of

the sale of the property to SLDC, the vendors were still the registered

owners of the property and were in fact in possession of the lands.

In assailing knowledge of the transaction between him and the Spouses Lu,

Babasanta apparently relies on the principle of constructive notice

incorporated in Section 52 of the Property Registration Decree (P.D. No.

1529) which reads, thus:

Sec. 52. Constructive notice upon registration. Every conveyance,

mortgage, lease, lien, attachment, order, judgment, instrument or entry

affecting registered land shall, if registered, filed, or entered in the office of

the Register of Deeds for the province or city where the land to which it

relates lies, be constructive notice to all persons from the time of such

registering, filing, or entering.

However, the constructive notice operates as suchby the express wording

of Section 52from the time of the registration of the notice oflis

pendens which in this case was effected only on 2 June 1989, at which time

the sale in favor of SLDC had long been consummated insofar as the

obligation of the Spouses Lu to transfer ownership over the property to

SLDC is concerned.

If a vendee in a double sale registers the sale after he has acquired

knowledge of a previous sale, the registration constitutes a registration inbad faith and does not confer upon him any right. If the registration is done

in bad faith, it is as if there is no registration at all, and the buyer who has

taken possession first of the property in good faith shall be preferred.

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In Abarquez, the first sale to the spouses Israel was notarized and registered

only after the second vendee, Abarquez, registered their deed of sale with

the Registry of Deeds, but the Israels were first in possession. This Court

awarded the property to the Israels because registration of the property by

Abarquez lacked the element of good faith. While the facts in the instant

case substantially differ from that in Abarquez, we would not hesitate to rule

in favor of SLDC on the basis of its prior possession of the property in good

faith. Be it noted that delivery of the property to SLDC was immediately

effected after the execution of the deed in its favor, at which time SLDC had

no knowledge at all of the prior transaction by the Spouses Lu in favor of

Babasanta.

The law speaks not only of one criterion. The first criterion is priority of entry

in the registry of property; there being no priority of such entry, the second

is priority of possession; and, in the absence of the two priorities, the third

priority is of the date of title, with good faith as the common critical element.

Since SLDC acquired possession of the property in good faith in contrast to

Babasanta, who neither registered nor possessed the property at any time,

SLDCs right is definitely superior tothat of Babasantas.

BAUTISTA VS. SIOSON

The material possession which the other defendant, Raymundo de la Cruz,

now enjoys, not only was subsequent by one year and eleven months, but

also, on the other hand, is an unlawful possession which was transmitted to

him by Francisco Sioson, who held the camarin precariously and in thecapacity of tenant, and, consequently, without any right whatever to convey

to Raymundo de la Cruz the possession under title of owner referred to in

article 1473, aforementioned of the Civil Code.

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This article says: "If the same thing should have been sold to different

vendees. . .;" but it must be understood that said sale was made by its

original owner. In the instant case Francisco Sioson, on affecting the second

sale in favor of Raymundo de la Cruz, was in possession of the camarin and

occupied it, not in the capacity of owner, but in that of lessee or tenant, and

therefore absolutely had no right to dispose of the building in the capacity of

owner thereof; consequently Sioson could not convey to the second

purchaser the lawful possession of the disputed camarin.

BOARD OF LIQUIDATORS VS. FLORO

We are of the opinion, and so hold, that the contract (Exhibit "A") between

Malabanan and the Board had effect of vesting Malabanan with title to, or

ownership of the steel mattings in question as soon as they were brought up

from the bottom of the sea.

While there can be reservation of title in the seller until full payment of the

price (Article 1478, N.C.C.), or, until fulfillment of a condition (Article 1505,

N.C.C.); and while execution of a public instrument amounts to delivery only

when from the deed the contrary does not appear or cannot clearly be

inferred (Article 1498, supra), there is nothing in the said contract which

may be deemed a reservation of title, or from which it may clearly be

inferred that delivery was not intended.

The contention that there was no delivery is incorrect. While there was no

physical tradition, there was one by agreement (traditio longa manu) inconformity with Article 1499 of the Civil Code.

Art. 1499 - The delivery of movable property may likewise be made by the

mere consent or agreement of the contracting parties, if the thing sold

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cannot be transferred to the possession of the vendee at the time of the

sale. . . .

As observed earlier, there is nothing in the terms of the public instrument in

question from which an intent to withhold delivery or transfer of title may be

inferred.

CHUA VS. CA

A contract to sell, the obligation of the seller to sell becomes demandable

only upon the happening of the suspensive condition. In this case, the

suspensive condition is the full payment of the purchase price by Chua. Such

full payment gives rise to Chuas right to demand the execution of the

contract of sale.

It is only upon the existence of the contract of sale that the seller becomes

obligated to transfer the ownership of the thing sold to the buyer. Article

1458 of the Civil Code defines a contract of sale as follows:

Art. 1458. By the contract of sale one of the contracting parties obligates

himselfto transfer the ownership of and to deliver a determinate thing, and

the other to pay therefor a price certain in money or its equivalent.

Prior to the existence of the contract of sale, the seller is not obligated to

transfer ownership to the buyer, even if there is a contract to sell between

them. It is also upon the existence of the contract of sale that the buyer isobligated to pay the purchase price to the seller. Since the transfer of

ownership is in exchange for the purchase price, these obligations must be

simultaneously fulfilled at the time of the execution of the contract of sale, in

the absence of a contrary stipulation.

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In a contract of sale, the obligations of the seller are specified in Article 1495

of the Civil Code, as follows:

Art. 1495. The vendor is bound to transfer the ownership of and deliver, as

well as warrant the thing which is the object of the sale. (Emphasis supplied)

The obligation of the seller is to transfer to the buyer ownership of the thing

sold. In the sale of real property, the seller is not obligated to transfer in the

name of the buyer a new certificate of title, but rather to transfer ownership

of the real property. There is a difference between transfer of the certificate

of title in the name of the buyer, and transfer of ownership to the buyer. The

buyer may become the owner of the real property even if the certificate of

title is still registered in the name of the seller. As between the seller and

buyer, ownership is transferred not by the issuance of a new certificate of

title in the name of the buyer but by the execution of the instrument of sale

in a public document.

In a contract of sale, ownership is transferred upon delivery of the thing

sold. Delivery is not only a necessary condition for the enjoyment of the

thing, but is a mode of acquiring dominion and determines the transmission

of ownership, the birth of the real right. The delivery, therefore, made in any

of the forms provided in articles 1497 to 1505 signifies that the transmission

of ownership from vendor to vendee has taken place. The delivery of the

thing constitutes an indispensable requisite for the purpose of acquiringownership. Our law does not admit the doctrine of transfer of property by

mere consent; the ownership, the property right, is derived only from

delivery of the thing.

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In a contract of sale of real property, delivery is effected when the

instrument of sale is executed in a public document. When the deed of

absolute sale is signed by the parties and notarized, then delivery of the real

property is deemed made by the seller to the buyer. Article 1498 of the Civil

Code provides that

Art. 1498. When the sale is made through a public instrument, the execution

thereof shall be equivalent to the delivery of the thing which is the object of

the contract, if from the deed the contrary does not appear or cannot clearly

be inferred.

CEBU WINLAND VS. ONG SIAO HUA

Under the Civil Code, ownership does not pass by mere stipulation but only

by delivery.[22]Manresa explains,the delivery of the thing . . . signifies that

title has passed from the seller to the buyer." According to Tolentino, the

purpose of delivery is not only for the enjoyment of the thing but also a

mode of acquiring dominion and determines the transmission of ownership,

the birth of the real right. The delivery under any of the forms provided by

Articles 1497 to 1505 of the Civil Code signifies that the transmission of

ownership from vendor to vendee has taken place.

Article 1497 above contemplates what is known as real or actual delivery,

when the thing sold is placed in the control and possession of the

vendee. Article 1498, on the one hand, refers to symbolic delivery by the

execution of a public instrument. It should be noted, however, that Article1498 does not say that the execution of the deed provides a conclusive

presumption of the delivery of possession. It confines itself to providing that

the execution thereof is equivalent to delivery, which means that the

presumption therein can be rebutted by means of clear and convincing

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evidence. Thus, the presumptive delivery by the execution of a public

instrument can be negated by the failure of the vendee to take actual

possession of the land sold.

In light of the foregoing, delivery as used in the Law on Sales refers to the

concurrent transfer of two things: (1) possession and (2) ownership.This is

the rationale behind the jurisprudential doctrine that presumptive

delivery via execution of a public instrument is negated by the reality that

the vendee actually failed to obtain material possession of the land subject

of the sale. In the same vein, if the vendee is placed in actual possession of

the property, but by agreement of the parties ownership of the same is

retained by the vendor until the vendee has fully paid the price, the mere

transfer of the possession of the property subject of the sale is not the

delivery contemplated in the Law on Sales or as used in Article 1543 of the

Civil Code.

In the case at bar, it appears that respondent was already placed in

possession of the subject properties. However, it is crystal clear that the

deeds of absolute sale were still to be executed by the parties upon payment

of the last installment. This fact shows that ownership of the said properties

was withheld by petitioner. Following case law, it is evident that the parties

did not intend to immediately transfer ownership of the subject properties

until full payment and the execution of the deeds of absolute

sale. Consequently, there is no delivery to speak of in this case since whatwas transferred was possession only and not ownership of the subject

properties.

SABIO VS. INTL CORPORATE BANK

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Under Article 1498 of the Civil Code, when the sale is made through a public

instrument, the execution thereof shall be equivalent to the delivery of the

object of the contract, if from the deed the contrary does not appear or

cannot be inferred. Possession is also transferred, along with ownership

thereof, to the petitioners by virtue of the deed of conveyance.

It is well-established that ownership and possession are two entirely

different legal concepts. Just as possession is not a definite proof of

ownership, neither is non-possession inconsistent with ownership. Thus, it is

of no legal consequence that respondents were never in actual possession or

occupation of the subject property. They, nevertheless, perfected and

completed ownership and title to the subject property.

Notwithstanding the presence of illegal occupants on the subject property,

transfer of ownership by symbolic delivery under Article 1498 can still be

effected through the execution of the deed of conveyance.

It is sufficient that there are no legal impediments to prevent petitioners

from gaining physical possession of the subject property. As stated above,

prior physical delivery or possession is not legally required and the execution

of the deed of sale or conveyance is deemed equivalent to delivery. This

deed operates as a formal or symbolic delivery of the property sold and

authorizes the buyer or transferee to use the document as proof of

ownership. Nothing more is required.

Petitioners cannot deny that the deed of conveyance can effectively transfer

ownership as it constitutes symbolic or constructive delivery of the subject

property. Neither can they negate the fact that as owners, they can exercise

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control over the said property. Respondents are not obligated to remove the

occupants before conveying the subject property to petitioners.

EDCA PUBLISHING VS. SANTOS

The contract of sale is consensual and is perfected once agreement is

reached between the parties on the subject matter and the consideration.

According to the Civil Code:

Art. 1475. The contract of sale is perfected at the moment there is a

meeting of minds upon the thing which is the object of the contract and

upon the price.

From that moment, the parties may reciprocally demand performance,

subject to the provisions of the law governing the form of contracts.

Art. 1477. The ownership of the thing sold shall be transferred to the vendee

upon the actual or constructive delivery thereof.

Art. 1478. The parties may stipulate that ownership in the thing shall not

pass to the purchaser until he has fully paid the price.

It is clear from the above provisions, particularly the last one quoted, that

ownership in the thing sold shall not pass to the buyer until full payment of

the purchase onlyif there is a stipulation to that effect. Otherwise, the rule

is that such ownership shall pass from the vendor to the vendee upon theactual or constructive delivery of the thing sold even if the purchase price

has not yet been paid.

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Non-payment only creates a right to demand payment or to rescind the

contract, or to criminal prosecution in the case of bouncing checks. But

absent the stipulation above noted, delivery of the thing sold will effectively

transfer ownership to the buyer who can in turn transfer it to another.

DAGUPAN TRADING VS. MACAM

If the property covered by the conflicting sales were unregisteredland,

Macam would undoubtedly have the better right in view of the fact that his

claim is based on a prior sale coupled with public, exclusive and continuous

possession thereof as owner. On the other hand, were the land involved in

the conflicting transactions duly registered land, We would be inclined to

hold that appellant has the better right because, as We have consistently

held, in case of conveyance of registered real estate, the registration of the

deed of sale is the operative act that gives validity to the transfer. This

would be fatal to appellee's claim, the deeds of sale executed in his favor by

the Maron's not having been registered, while the levy in execution and the

provisional certificate of sale as well as the final deed of sale in favor of

appellant were registered. Consequently, this registered conveyance must

prevail although posterior to the one executed in favor of appellee, and

appellant must be deemed to have acquired such right, title and interest as

appeared on the certificate of title issued in favor of Sammy Maron, subject

to no lien, encumbrance or burden not noted thereon.

The present case, however, does not fall within either, situation. Here the

sale in favor of appellee was executed before the land subject-matterthereof was registered, while the conflicting sale in favor of appellant was

executed afterthe same property had been registered. We cannot,

therefore, decide the case in the light of whatever adjudicated cases there

are covering the two situations mentioned in the preceding paragraph. It is

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our considered view that what should determine the issue are the provisions

of the last paragraph of Section 35, Rule 39 of the Rules of Court, to the

effect that upon the execution and delivery of the final certificate of sale in

favor of the purchaser of land sold in an execution sale, such purchaser

"shall be substituted to and acquire all the right, title, interest and claim of

the judgment debtor to the property as of the time of the levy." Now We

ask: What was the interest and claim of Sammy Maron on the one-eighth

portion of the property inherited by him and his co-heirs, at the time of the

levy? The answer must necessarily be that he had none, because for a

considerable time prior to the levy, his interest had already been conveyed

to appellee, "fully and retrievably - as the Court of Appeals held.

Consequently, subsequent levy made on the property for the purpose of

satisfying the judgment rendered against Sammy Maron in favor of the

Manila Trading Company was void and of no effect

Needless to say, the unregistered sale and the consequent conveyance of

title and ownership in favor of appellee could not have been cancelled and

rendered of no effect upon the subsequent issuance of the Torrens title over

the entire parcel of land.

Separate and apart from this however, we believe that in the inevitable

conflict between a right of ownership already fixed and established under the

Civil Law and/or the Spanish Mortgage Law - which cannot be affected by

any subsequent levy or attachment or execution - and a new law or system

which would make possible the overthrowing of such ownership onadmittedly artificial and technical grounds, the former must be upheld and

applied.

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But to the above considerations must be added the important circumstance

that, as already stated before, upon the execution of the deed of sale in his

favor by Sammy Maron, appellee took possession of the land conveyed as

owner thereof, and introduced considerable improvements thereon. To

deprive him now of the same by sheer force of technicality would be against

both justice and equity.

NAAWAN COMMUNITY RURAL BANK VS. CA

Article 1544 provides:

". . . . Should it be immovable property, the ownership shall belong to the

person acquiring it who in good faith first recorded it in the Registry of

Property."

Petitioner bank contends that the earlier registration of the sheriff's deed of

final conveyance in the day book under Act 3344 should prevail over the

later registration of private respondents' deed of absolute sale under Act

496,4 as amended by the Property Registration Decree, PD 1529.

This contention has no leg to stand on. It has been held that, where a

person claims to have superior proprietary rights over another on the ground

that he derived his title from a sheriff's sale registered in the Registry of

Property, Article 1473 (now Article 1544) of the Civil Code will apply only if

said execution sale of real estate is registered under Act 496.5

Unfortunately, the subject property was still untitled when it was alreadyacquired by petitioner bank by virtue of a final deed of conveyance. On the

other hand, when private respondents purchased the same property, it was

covered by the Torrens System.

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Its registration referred to land not within the Torrens System but under Act

3344. On the other hand, when private respondents bought the subject

property, the same was already registered under the Torrens System. It is a

well-known rule in this jurisdiction that persons dealing with registered land

have the legal right to rely on the face of the Torrens Certificate of Title and

to dispense with the need to inquire further, except when the party

concerned has actual knowledge of facts and circumstances that would impel

a reasonably cautious man to make such inquiry.8

Did private respondents exercise the required diligence in ascertaining the

legal condition of the title to the subject property so as to be considered as

innocent purchasers for value and in good faith?

Before private respondents bought the subject property from Guillermo

Comayas, inquiries were made with the Registry of Deeds and the Bureau of

Lands regarding the status of the vendor's title. No liens or encumbrances

were found to have been annotated on the certificate of title. Neither were

private respondents aware of any adverse claim or lien on the property other

than the adverse claim of a certain Geneva Galupo to whom Guillermo

Comayas had mortgaged the subject property. But, as already mentioned,

the claim of Galupo was eventually settled and the adverse claim previously

annotated on the title cancelled. Thus, having made the necessary inquiries,

private respondents did not have to go beyond the certificate of title.

Otherwise, the efficacy and conclusiveness of the Torrens Certificate of Titlewould be rendered futile and nugatory.

Considering therefore that private respondents exercised the diligence

required by law in ascertaining the legal status of the Torrens title of

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Guillermo Comayas over the subject property and found no flaws therein,

they should be considered as innocent purchasers for value and in good

faith.

SPOUSES VALDEZ VS. CA

From the foregoing set of facts there can be no question that the sale of the

subject lot to petitioners was made long before the execution of the Deed of

Assignment of said lot to respondent Viernes and that petitioners annotated

their adverse claim as vendees of the property as early as September 6,

1982 with the Register of Deeds of Quezon City. On the other hand the deed

of Assignment in favor of Viernes of the said lot was registered with the

Register of Deeds of Quezon City only on November 11, 1982 whereby a

new title was issued in the name of Viernes as above stated.

The rule is clear that a prior right is accorded to the vendee who first

recorded his right in good faith over an immovable property. 13 In this case,

the petitioners acquired subject lot in good faith and for valuable

consideration from the Antes and as such owners petitioners fenced the

property taking possession thereof. Thus, when petitioners annotated their

adverse claim in the Register of Deeds of Quezon City they thereby

established a superior right to the property in question as against

respondent Viernes.

On the other hand, respondent Viernes cannot claim good faith in the

purchase of the subject lot and the subsequent registration of the Deed ofAssignment in her favor. Even before the petitioners purchased the lot from

the Antes respondent Viernes' husband was first given the option to

purchase the same by Antonio Ante but he declined because he had no

money and so he was informed that it would be sold to petitioners. After

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petitioners purchased the lot they immediately fenced the same with the

knowledge and without objection of respondent Viernes and her husband

and they were informed by the petitioners about their purchase of the same.

Moreover, when petitioners annotated their adverse claim as vendees of the

property with the Register of Deeds of Quezon City, it was effectively a

notice to the whole world including respondent Viernes.

RADIOWEALTH FINANCE VS. PALILEO

There is no doubt that had the property in question been a registered land,

this case would have been decided in favor of petitioner since it was

petitioner that had its claim first recorded in the Registry of Deeds. For, as

already mentioned earlier, it is the act of registration that operates to

convey and affect registered land. Therefore, a bona fide purchaser of a

registered land at an execution sale acquires a good title as against a prior

transferee, if such transfer was unrecorded.

However, it must be stressed that this case deals with a parcel of

unregistered land and a different set of rules applies. We affirm the decision

of the Court of Appeals.

Under Act No. 3344, registration of instruments affecting unregistered lands

is "without prejudice to a third party with a better right". The aforequoted

phrase has been held by this Court to mean that the mere registration of a

sale in one's favor does not give him any right over the land if the vendor

was not anymore the owner of the land having previously sold the same tosomebody else even if the earlier sale was unrecorded.

It was held therein that Article 1544 of the Civil Code has no application to

land not registered under Act No. 496. Like in the case at bar, Carumba

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dealt with a double sale of the same unregistered land. The first sale was

made by the original owners and was unrecorded while the second was an

execution sale that resulted from a complaint for a sum of money filed

against the said original owners. Applying Section 35, Rule 39 of the Revised

Rules of Court, 7this Court held that Article 1544 of the Civil Code cannot be

invoked to benefit the purchaser at the execution sale though the latter was

a buyer in good faith and even if this second sale was registered. It was

explained that this is because the purchaser of unregistered land at a

sheriffs execution sale only steps into the shoes of the judgment debtor, and

merely acquires the latter's interest in the property sold as of the time the

property was levied upon.

Applying this principle, the Court of Appeals correctly held that the execution

sale of the unregistered land in favor of petitioner is of no effect because the

land no longer belonged to the judgment debtor as of the time of the said

execution sale.

BAYOCA VS. NOGALES

Based on the foregoing, to merit protection under Article 1544, second

paragraph, of the Civil Code, the second buyer must act in good faith in

registering the deed.[9 Thus, it has been held that in cases of double sale of

immovables, what finds relevance and materiality is not whether or not the

second buyer was a buyer in good faith but whether or not said second

buyer registers such second sale in good faith, that is, without knowledge ofany defect in the title of the property sold.[10

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Good faith on petitioners part, as the second buyers of the subject property,

was not found by the appellate court, thus its decision adverse to them. The

Court of appeals ratiocinated thus:

Appellants insistence that they were purchasers in good faith is an exercise

in futility. What, to our mind, is decisive of the issue of who, between the

Appellee, on the one hand, and the Appellants, on the other, is the owner of

the property is Article 1544 of the New Civil Code

Registration, however, by the first buyer under Act 3344 can have the effect

of constructive notice to the second buyer that can defeat his right as such

buyer in good faith

Inscrutably, too the sale to the Appellee was registered with the Registry of

properties much earlier than the registration, if any, of the sales to the

Appellants and that the Appellee took possession of the said property much

earlier than the Appellants considering that the Deed of Sale (Exhibit G) is

a public deed. It bears stressing that possession, under Article 1544 of the

New Civil Code, includes symbolic possession:

We are of the opinion that the possession mentioned in article 1473 (for

determining who has better right when the same piece of land has been sold

several times by the same vendor) includes not only the material but also

the symbolic possession, which is acquired by the execution of public

instrument.

There is absence of prior registration in good faith by petitioners of the

second sale in their favor. As stated in the Santiago case, registration by the

first buyer under Act No. 3344 can have the effect of constructive notice to

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the second buyer that can defeat his right as such buyer,[11 On account of

the undisputed fact of registration under Act No. 3344 by respondent

Nogales as the first buyer, necessarily, there is absent good faith in the

registration of the sale by the petitioners Erwin Bayoca and the spouses Pio

and Lourdes Dichoso for which they had been issued certificates of title in

their names. It follows that their title to the land cannot be upheld. As for

petitioners Francisco Bayoca and Nonito Dichoso, they failed to register the

portions of the property sold to them, and merely rely on the fact that they

declared the same in their name for taxation purposes. Suffice it to state

that such fact, does not, by itself, constitute evidence of ownership,[12 and

cannot likewise prevail over the title of respondent Nogales.

Registration of the second buyer under Act 3344, providing for the

registration of all instruments on land neither covered by the Spanish

Mortgage Law nor the Torrens System (Act 496), cannot improve his

standing since Act 3344 itself expresses that registration thereunder would

not prejudice prior rights in good faith

Registration, however, by the first buyer under Act 3344 can have the effect

of constructive notice to the second buyer that can defeat his right as such

buyer in good faith

CATAIN VS. RIOS

At any rate, inasmuch as said land was registered in the name of Vicente

Catain when Herminio Rios sold it to Tamayo - as well as at present - andthis appeared and still appears in public records, in the Office of the Register

of Deeds of Palawan, Tamayo must be deemed to have notice of such fact 5

and cannot legally claim that he bought the land in the belief, in good faith,

that it belonged to Rios who could not even produce - at the time of the sale

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to Tamayo - the owner's duplicate of the original certificate of title in the

name of Vicente Catain, the same having been previously delivered to

plaintiff herein.

In fact, Tamayo did not allege in his answer that he bought the property in

question in good faith or that he acted in good faith when, onAugust 20,

1955, he converted his, up to then, precarious possession, into one as

owner. Although the lower court found that there was good faith on his part,

when his possession began in 1951, this did not suffice to place him within

the purview of the third paragraph of the aforementioned Article 1544, -

because as already pointed out - such possession was one held with the

consentof Honesto Rios and, hence, in his representation and behalf, not

adversely to him. In other words, Tamayo is not entitled to the benefits of

said legal provision.

Moreover, a deed conveying a land covered by a certificate of title, under the

Torrens system, does not transmit a right in rem until the registration of said

instrument, 7 and that executed in favor of Tamayo has not been registered.

In fact, it couldnothave been registered, it having been executed by

Herminio Rios whereas the land is registered in the name of Vicente Catain

and Tamayo could not have presented the owner's duplicate of the certificate

of title.

GABRIEL VS. MABANTA

Otherwise stated, where it is an immovable property that is the subject of adouble sale, ownership shall be transferred (1) to the person acquiring it

who in good faith first recorded it in the Registry of Property; (2) in default

thereof, to the person who in good faith was first in possession; and (3) in

default thereof, to the person who presents the oldest title, provided there is

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good faith.[14 The requirement of the law then is two-fold: acquisition in

good faith and registration in good faith.

Under the foregoing, the prior registration of the disputed property by the

second buyer does not by itself confer ownership or a better right over the

property. Article 1544 requires that such registration must be coupled with

good faith. Jurisprudence teaches us that (t)he governing principle isprimus

tempore, potior jure (first in time, stronger in right). Knowledge gained by

the first buyer of the second sale cannot defeat the first buyers right except

where the second buyer registers in good faith the second sale ahead of the

first, as provided by the Civil Code. Such knowledge of the first buyer does

not bar her from availing of her rights under the law, among them, to

register firsther purchase as against the second buyer. But in converso,

knowledge gained by the second buyer of the first sale defeats his right even

if he is first to register the second sale, since such knowledge taints his prior

registration with bad faith.This is the price exacted by Article 1544 of the

Civil Code for the second buyer being able to displace the first buyer, that

before the second buyer can obtain priority over the first, he must show that

he acted in good faith throughout (i.e. in ignorance of the first sale and of

the first buyers right) from the time of acquisition until the title is

transferred to him by registration or failing registration, by delivery of

possession.

In the case at bar, certain pieces of evidence, put together, would prove that

respondent Reyes is not a buyer in good faith.

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