AINZA VS. PADUAThis is a case involving family members. In April 1987, Ainza and her daughter Eugenia orally agreed that Ainza pay P100k inexchangefor half of theportionof Eugenias undivided conjugal property (a lot located in QC). No Deed of Absolute Sale was executed. There was physical delivery of the land through Concepcions other daughter (Natividad) acting as atty-in-fact. Concepcion thereafter allowed Natividad and her husband occupy the purchasedportionof the land.In 1994, Antonio caused the division of the lot into three (two were occupied by the spouses), necessarily displacing Natividad. He also had each subdivision titled. Antonio requested Natividad to vacate the premises. Antonio averred that his wife only admitted of selling 1/3 of the property to Concepcion for which a receipt was issued signed by Concepcion. The RTC ruled in favor of Concepcion. The CA reversed the RTC ruling. CA explained that the property is conjugal hence the sale should have been with Antonios consent.ISSUE:Whether or not the contract of sale between Ainza and Eugenia is valid.HELD:Yes it is valid until annulled (voidable). There was a perfected contract of sale between Eugenia and Concepcion. The records show that Eugenia offered to sell aportionof the property to Concepcion, who acceptedthe offerand agreed to pay P100,000.00 as consideration. The contract of sale was consummated when both parties fully complied with their respective obligations. Eugenia delivered the property to Concepcion, who in turn, paid Eugenia the price of P100,000.00, as evidenced by the receipt. Since the land was undivided when it was sold, Concepcion is entitled to have half of it.Antonio cannot, however, attack the validity of the sale b/n his wife and his mom-in-law, either under the Family Code or the Old Civil Code due to prescription. The sale came to his knowledge in 1987. He only filed the case in 1999. His right prescribed in 1993 (under the FC [5 years]) and 1997 (under OCC [10 years]).

MCCULLOUGH VS BERGER

DICHOSO VS ROXASFACTS: Roxas sold to Dichoso and Hernandez a parcel of unregistered coconut land, subject to the condition that the vendor could repurchase the land within 5 years from the date ofsale. Roxas received from Dichoso several sums of money as initial or advance payments, with the agreement that Roxas would sell the same property, by absolute sale, to Dichoso. Out of their remaining balance, they would use P850 to repurchase the property from Borja and Alanguilan within the period stipulated. Dichoso informed Borja of their readiness to repurchase and sent Roxas a check. Roxas returned the check with the request that they indorsed it to Borja and Alanguilan when they make the repurchase. Despite the repeated demands and representations, Roxas and Borja had deliberately fails to execute the corresponding deed ofabsolute sale and deed ofresale.

ISSUE:Whether or not there was adouble sale.

HELD:No. The contract betweenthe petitionersand Roxas was a merepromise to sellbecause Roxas merely promised to execute a deed of absolute sale upon Dichosos completion of payment. On the date that Roxas could possibly sell or convey in relation to the property in question was her right to repurchase the same from Borja. The private document executed between Roxas and Dichoso can be considered as an assignment by Roxas to Dischoso of her right to repurchase which Roxas only had knowledge thereof when Dichoso attempted to make the repurchase. Such being its condition, it could not possibly give rise to the case of one and the same property having been sold to two different purchasers. The sale in favor of Borja was of the property itself, while the one in favor of Dichoso, if not a mere promise to assign, was at most an actual assignment of the right to repurchase the same PROPERTY. Art. 1544, par.3 of the CC do not apply.

LUZON BROKERAGE VS. MARITIME BUILDINGLuzon Brokerage Co. v. Maritime Building Co. (1972)Plaintiff-appellee: Luzon Brokerage Co.Defendants: Maritime Building Co and Myers Building CoPonente: Reyes, J.B.L., J.

Doctrine: The distinction between contracts of sale and contract to sell with reserved title has been recognized by this Court in repeated decisions upholding the power of promisors under contracts to sell in case of failure of the other party to complete payment, to extrajudicially terminate the operation of the contract, refuse conveyance and retain the sums or installments already received, where such rights are expressly provided for, as in this case.

Short version: Myers corp sold land to Maritime. In the agreement, they agreed on an installment plan and that if Maritime missed a payment, the contract will be annulled and the payments already made will be forfeited. Maritime failed to pay so Myers annulled the contract and did not return payments. SC says Myers can do this because under contracts to sell, promisors, in case of failure of the other party to complete payment, can extrajudicially terminate the contract, refuse conveyance, and retain installments already received, where such rights are provided.

In Manila, Myers owned 3 parcels of land w/ improvements. Myers then entered into a contract called a Deed of Conditional Sale with Maritime Building.

Myers sold the land for P1million. They agreed on the manner of payment (installment, initial payment upon execution of contract, interest rate) In the contract it was stipulated that in case of failure of buyer to pay any of the installments, the contract will be annulled at the option of the seller and all payments made by the buyer is forfeited.

Later on, the stipulated installment of P10k with 5%interest was amended to the P5k with 5.5% per annum. Maritime paid the monthly installments but failed to pay the monthly installment of March.VP of Maritime wrote to Pres of Myers requesting for a moratorium on the monthly payment of the installments because the company was undergoing financial problems. Myers refused.

For the months of March, April, and May, Maritime failed to pay and did not heed the demand of Myers.Myers wrote Maritime cancelling the Deed of Conditional Sale Myers demanded return of possession of properties

Held Maritime liable for use and occupation amounting to P10k per month

In the meantime, Luzon Brokerage was leasing the property from Maritime. Myers demanded from Luzon the payment of monthly rentals of P10k. Myers also demanded surrender of property. While actions and crossclaims between Myers and Maritime were happening, the contract between Maritime and Luzon was extended for 4more years. Turns out, Maritimes suspension of its payments to Myers corp arose from a previous event: An award of backwages made by the Court ofIndustrial Relations in favor of Luzon Labor Union (employees employed by Luzon).

FH Myers was a major stockholder of Luzon Brokerage. FH Myers promised to indemnifySchedler (who controlled Maritime) when Shedlerpurchased FH Myerss stock in Luzon Brokerage company. (This indemnificationis for the award of backwages by the CIR)

Schedler claims that after FH Myers estates closed, he was notified that the indemnity on the Labor Union case will not be honored anymore. And so, Schedler advised Myers corp that Maritime is withholding payments to Myers corp in order to offset the liability when Myersheirs failed to honor the indemnity agreement.

TC ruled Maritime in breach of contract.

Issue: Has there been a breach of contract?Can Myers extrajudicially terminate the contract?

Held: Yes.

Ratio: Failure to pay monthly installments constitute a breach of contract. Default was not made in good faith. The letter to Myers corp means that the non-payment of installments was deliberately made to coerce Myers crp into answering for an alleged promise of the dead FH Myers. Whatever obligation FH Myers had assumed is not an obligation of Myers corp. No proof that board of Myers corp agreed to assume responsibility to debts of FH Myers and heirs.

Schaedler allowed the estate proceedings of FH Myers to close without providing liability. By the balance (of payment) in the Deed of Conditional Sale, Maritime was attempting to burden the Myers corp with an uncollectible debt, since enforcement against FH Myers estate was already barred. Maritime acted in bad faith.

Maritimes contract with Myers is not the ordinary sale contemplated in NCC 1592 (transferring ownership simultaneously with delivery).

The distinction between contracts of sale and contract to sell with reserved title has been recognized by this Court in repeated decisions upholding the power of promisors under contracts to sell in case of failure of the other party to complete payment, to extrajudicially terminate the operation of the contract, refuse conveyance and retain the sums or installments already received, where such rights are expressly provided for, as in this case. Decision affirmed

PORTIC VS. CRISTOBAL

in 1968, spouses Portic acquired a parcel of land with a 3 door apartment from Sps. Alcantara even though theyre aware that the land was mortgaged to the SSS. Portic defaulted in paying SSS. The Portics then executed a contract with Cristobal and the latter agreed to buy the said property for P200k. Cristobals down payment was P45k and she also agreed to pay SSS. The contract between them states: That while the balance of P155,000.00 has not yet been fully paid the FIRST PARTYOWNERS shall retain the ownership of the above described parcel of land together with its improvements but the SECOND PARTY BUYER shall have the right to collect the monthly rentals due on the first door (13-A) of the said apartment; (payment is due 22May 1985, if Cristobal will not be able to payPortic will reimburse)A transfer certificate was executed in favor of Cristobal. Cristobal was not able to pay on the due date. A suit ensued to lift the cloud on the title.

ISSUE: Who is the rightful owner of the parcel of land?

HELD: The Portics insofar as there was no contract of sale. What transpired between the parties was a contract to sell. The provision of the contract characterizes the agreement between the parties asa contract tosell, not acontract of sale.Ownership is retained by the vendors, the Portics; it will not bepassed to the vendee, the Cristobals, until the full payment ofthe purchase price.Such payment is a positive suspensive condition, and failure to comply with it is not abreach of obligation; it is merely an event that prevents the effectivity of the obligation of thevendorto convey the title.In short, untilthe full priceis paid, thevendorretains ownership.The mere issuance of the Certificate of Title in favor of Cristobal did not vest ownership in her. Neither did it validatethe alleged absolute purchaseof the lot.Registration does not vest,but merely serves as evidence of, title.Our land registration laws do not give the holders any bettertitle than that which they actually have prior to registration. Under Article 1544 of the Civil Code, mere registration is not enough to acquire a new title. Good faith mustconcur. Clearly, Cristobal has not yetfully paid the purchase price.Hence, as long as it remainsunpaid, she cannot feigngood faith.She is alsoprecluded from asserting ownership against the Portics.The CAs finding that shehad a validtitle to the property must be set aside.

HEIRS OF MASCUNANA VS. CAFacts: Masunana bought a parcel of land from the Wuthrich siblings. Part of which Mascunana, he later sold to Sumilhig. The contract price is 4,690 with 3,690 as down payment. Their agreement says: That the balance of ONE THOUSAND PESOS (P1,000.00) shall be paid by the VENDEE unto the VENDOR as soon as the above-portions of Lot 124 shall have been surveyed in the name of the VENDEE and all papers pertinent and necessary to the issuance of a separate Certificate of Title in the name of the VENDEE shall have been prepared. Sumilhig later sold the same lot to Layumas. Years after, Layumas wrote to the heirs of Mascunana (since Mascunana died already) offering to pay the 1,000 balance of the purchase price of the property. The addressee, however, refused to receive the mail matter. Heirs Mascunana then filed a complaint for recovery of possession against Barte ( an individual whom Layumas allowed to stay on the subject property). Issue: WON the contract of alienation of the subject lot in favor of Sumilhig was a contract to sell or a contract of sale Held: In this case, there was a meeting of the minds between the vendor and the vendee, when the vendor undertook to deliver and transfer ownership over the property covered by the deed of absolute sale to the vendee for the price of P4,690.00 of which P3,690.00 was paid by the vendee to the vendor as down payment. The vendor undertook to have the property sold, surveyed and segregated and a separate title therefor issued in the name of the vendee, upon which the latter would be obliged to pay the balance of P1,000.00. There was no stipulation in the deed that the title to the property remained with the vendor, or that the right to unilaterally resolve the contract upon the buyers failure to pay within a fixed period was given to such vendor. Patently, the contract executed by the parties is a deed of sale and not a contract to sell. Applying these principles to this case, it cannot be gainsaid that the contract of sale between the parties is absolute, not conditional. There is no reservation of ownership nor a stipulation providing for a unilateral rescission by either party. In fact, the sale was consummated upon the delivery of the lot to respondent. Thus, Art. 1477 provides that the ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof. The condition in the deed that the balance of P1,000.00 shall be paid to the vendor by the vendee as soon as the property sold shall have been surveyed in the name of the vendee and all papers pertinent and necessary to the issuance of a separate certificate of title in the name of the vendee shall have been prepared is not a condition which prevented the efficacy of the contract of sale. It merely provides the manner by which the total purchase price of the property is to be paid. The condition did not prevent the contract from being in full force and effect: The stipulation that the payment of the full consideration based on a survey shall be due and payable in five (5) years from the execution of a formal deed of sale is not a condition which affects the efficacy of the contract of sale. It merely provides the manner by which the full consideration is to be computed and the time within which the same is to be paid. But it does not affect in any manner the effectivity of the contract. In a contract to sell, ownership is retained by a seller and is not to be transferred to the vendee until full payment of the price. Such payment is a positive suspensive condition, the failure of which is not a breach of contract but simply an event that prevented the obligation from acquiring binding force. It bears stressing that in a contract of sale, the non-payment of the price is a resolutory condition which extinguishes the transaction that, for a time, existed and discharges the obligation created under the transaction. A seller cannot unilaterally and extrajudicially rescind a contract of sale unless there is an express stipulation authorizing it. In such case, the vendor may file an action for specific performance or judicial rescission. Article 1169 of the New Civil Code provides that in reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him; from the moment one of the parties fulfills his obligation, delay by the other begins. In this case, the vendor (Jesus Mascuana) failed to comply with his obligation of segregating Lot No. 124-B and the issuance of a Torrens title over the property in favor of the vendee, or the latters successors-in-interest, the respondents herein. Worse, petitioner Jose Mascuana was able to secure title over the property under the name of his deceased father.URSAL VS. CAIn January 1985, Winifreda Ursal and spouses Jesus and Cristita Monesetenteredinto a Contract to Sell Lot & House. The amount agreed upon was P130,000.00. Ursal is to pay P50k as down payment and will continue to pay P3k monthly starting the next month until the balance is paid off. After 6 months, Ursal stopped paying the Monesets for the latter failed to give her the transfer of certificate title.In November 1985, the Monesets executed an absolute deed of sale with one Dr. Canora. In September 1986, the Monesets mortgaged the same property to the Rural Bank of Larena for P100k. The Monesets failed to pay the P100k hence the bank filed for foreclosure.Trial ensued and the RTC ruled in favor of Ursal. The trial court ruled that there was fraud on the part of the Monesets for executing multiple sales contracts. That the bank is not liable for fraud but preference to redeem should be given to Ursal. The Monesets are ordered to reimburse Ursal plus to pay damages and fees. Ursal was not satisfied as she believed that the bank was also at fault.ISSUE:Whether or not the Contract to Sell vested ownership in Ursal.HELD:No. There should be no special preference granted to Ursal in redeeming the property. What she had with the Monesets was contract to sell in which case ownership was not transferred to her due the suspensive condition of full payment. Further, the property was sold to other properties already.A contract to sell is 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.In such contract, the prospective seller expressly reserves the transfer of title to the prospective buyer, until the happening of an event, which in this case is the full payment of the purchase price. What the seller agrees or obligates himself to do is to fulfill his promise to sell the subject property when the entire amount of the purchase price is delivered to him. Stated differently, the full payment of the purchase price partakes of a suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and thus, ownership is retained by the prospective seller without further remedies by the prospective buyer.Since the contract in this case is a contract to sell, the ownership of the property remained with the Monesets even after petitioner has paid the down payment and took possession of the property.

CARRASCOSO VS. CAIn March 1972, El Dorado Plantation Inc, through board member Lauro Leviste, executed a Deed of Sale with Carrascoso. The subject of the sale was a 1825 hectare of land. It was agreed that Carrascoso is to pay P1.8M. P290K would be paid by Carrascoso to PNB to settle the mortgage placed on the said land. P210k would be paid directly to Leviste. The balance ofP1.3M plus 10% interest would be paid over the next 3 years at P519k every 25th of March. Leviste also assured that there were no tenants hence the land does not fall under the LandReform Code. Leviste allowed Carrascoso to mortgage the land which the latter did. Carrascoso obtained a total of P1.07M as mortgage and he used the same to pay the downpayment agreed upon in the contract. Carrascoso defaulted from his obligation which was supposed to be settled on March 25, 1975. Leviste then sent him letters to make good his end of the contract otherwise he will be litigated. In 1977, Carrascoso executed a Buy and Sell Contract with PLDT. The subject of the sale was the same land sold to Carrascoso by Leviste but itwas only the 1000 sq mportion thereof. The land is to be sold at P3M. Part of the terms and conditions agreed upon was that Carrascoso is to remove all tenants from the land within one year. He is also given a 6 month extension incase hell need one. Thereafter, PLDT will notify Carrascoso if whether or not PLDt will finalize the sale. PLDT gained possession of the land. El Dorado filed a civilcase against Carrascoso. PLDT intervened averring that it was a buyer in good faith. The RTC ruled in favor of Carrascoso. CA reversed the RTC ruling.

ISSUE:What is thenature of each contract?

HELD:The contract executed between El Dorado and Carrascoso was a contract of sale. It was perfected by their meeting of the minds and was consummated by the delivery of the property to Carrascoso. However, ElDorado has the right to rescind the contract by reason of Carrascosos failure to perform his obligation.

A contract of sale is a reciprocal obligation.The seller obligates itself to transfer the ownership of and deliver a determinate thing, and the buyer obligates itself to pay therefor a price certain in money or its equivalent. The non-payment of the price by the buyer is a resolutory condition which extinguishes the transaction that for a time existed, and discharges the obligationsc reated thereunder.Such failure topay the pricein the mannerprescribed by the contract ofsale entitles the unpaid seller to sue for collection or to rescind the contract.T he contract between Carrascoso and PLDT is a contract to sell. This is evidenced by the terms and conditions that they have agreed upon thatafter fulfillment of Carrascosos obligation PLDT has to notify Carrascoso of its decision whether or not to finalize the sale.Carrascoso also averredthat therewas a breach on El Dorados partwhen it comes to warranty. Carrascoso claimed that there were tenants on the land and he spent about P2.9Mrelocating them. The SC ruled that Carrascoso merely had abare claim without additional proofto support it.

Requisites of Express warranty in a Contract of Sale(1) the express warranty must be an affirmation of fact or any promise by the seller relating to the subject matter of the sale;(2) the natural tendency of such affirmation or promise is to induce the buyer to purchase the thing; and(3) the buyer purchases the thing relying on such affirmation or promise thereon