Obligation and Contracts - Forms

7/25/2019 Obligation and Contracts - Forms

1/21

Part III. FORMS OF CONTRACT

1. General (Art. 1356)

FORM OF CONTRACTS

Art. 1356. Contracts shall be obligatory, in whatever form they may have been entered into,provided all the essential requisites for their validity are present. However, when the law

requires that a contract be in some form in order that it may be valid or enforceable or that a

contract be proved in a certain way, that requirement is absolute and indispensable.

In such cases, the rights of the parties stated in the following article cannot be exercised.

2. Importance of Formalities (Arts. 1356-1358)

Art. 1357. If the law requires a document or other special form, as in the acts and contracts

enumerated in the following article, the contracting parties may compel each other to

observe that form, once the contract has been perfected. This right may be exercised

simultaneously with the action upon the contract.

Art. 1358. The following must appear in a public document:

(1) Acts and contracts which have for their object the creation, transmission, modification or

extinguishment of real rights over immovable property; sales of real property or of an

interest therein are governed by Articles 1403, No. 2, and 1405;

(2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal

partnership of gains;

(3) The power to administer property, or any other power which has for its object an act

appearing or which should appear in a public document, or should prejudice a third person;

(4) The cession of actions or rights proceeding from an act appearing in a public document.

All other contracts where the amount involved exceeds five hundred pesos must appear in

writing, even a private one. But sales of goods, chattels or things in action are governed by

Articles 1403, No. 2 and 1405.

Cases:

G.R. No. L-27010 April 30, 1969

MARLENE DAUDEN-HERNAEZ, petitioner,

vs.


2/21

HON. WALFRIDO DE LOS ANGELES, Judge of the Court of First Instance of Quezon City,

HOLLYWOOD FAR EAST PRODUCTIONS, INC., and RAMON VALENZUELA, respondents.

R. M. Coronado and Associates for petitioner.

Francisco Lavides for respondent.

REYES, J.B.L., Acting C.J.:

Petition for a writ of certiorari to set aside certain orders of the Court of First Instance

of Quezon City (Branch IV), in its Civil Case No. Q-10288, dismissing a complaint for breach

of contract and damages, denying reconsideration, refusing to admit an amended complaint,

and declaring the dismissal final and unappealable.

The essential facts are the following:

Petitioner Marlene Dauden-Hernaez, a motion picture actress, had filed a complaint

against herein private respondents, Hollywood Far East Productions, Inc., and its President

and General Manager, Ramon Valenzuela, to recover P14,700.00 representing a balanceallegedly due said petitioner for her services as leading actress in two motion pictures

produced by the company, and to recover damages. Upon motion of defendants, the

respondent court (Judge Walfrido de los Angeles presiding) ordered the complaint

dismissed, mainly because the "claim of plaintiff was not evidenced by any written

document, either public or private", and the complaint "was defective on its face" for

violating Articles 1356 and 1358 of the Civil, Code of the Philippines, as well as for

containing defective allege, petitions. Plaintiff sought reconsideration of the dismissal and

for admission of an amended complaint, attached to the motion. The court denied

reconsideration and the leave to amend; whereupon, a second motion for reconsideration

was filed. Nevertheless, the court also denied it for being pro forma, as its allegations "are,

more or less, the same as the first motion", and for not being accompanied by an affidavit ofmerits, and further declared the dismissal final and unappealable. In view of the attitude of

the Court of First Instance, plaintiff resorted to this Court.

The answer sets up the defense that "the proposed amended complaint did not vary in

any material respect from the original complaint except in minor details, and suffers from

the same vital defect of the original complaint", which is the violation of Article 1356 of the

Civil Code, in that the contract sued upon was not alleged to be in writing; that by Article

1358 the writing was absolute and indispensable, because the amount involved exceeds five

hundred pesos; and that the second motion for reconsideration did not interrupt the period

for appeal, because it was not served on three days' notice.

We shall take up first the procedural question. It is a well established rule in our

jurisprudence that when a court sustains a demurrer or motion to dismiss it is error for the

court to dismiss the complaint without giving the party plaintiff an opportunity to amend his

complaint if he so chooses. 1 Insofar as the first order of dismissal (Annex D, Petition) did

not provide that the same was without prejudice to amendment of the complaint, or reserve

to the plaintiff the right to amend his complaint, the said order was erroneous; and this error

was compounded when the motion to accept the amended complaint was denied in the

subsequent order of 3 October 1966 (Annex F, Petition). Hence, the petitioner-plaintiff was


3/21

within her rights in filing her so-called second motion for reconsideration, which was

actually a first motion against the refusal to admit the amended complaint.

It is contended that the second motion for reconsideration was merely pro forma and

did not suspend the period to appeal from the first order of dismissal (Annex D) because (1)

it merely reiterated the first motion for reconsideration and (2) it was filed without giving

the counsel for defendant-appellee the 3 days' notice provided by the rules. This argument is

not tenable, for the reason that the second motion for reconsideration was addressed to the

court' refusal to allow an amendment to the original complaint, and this was a ground not

invoked in the first motion for reconsideration. Thus, the second motion to reconsider was

really not pro forma, as it was based on a different ground, even if in its first part it set forth

in greater detail the arguments against the correctness of the first order to dismiss. And as

to the lack of 3 days' notice, the record shows that appellees had filed their opposition (in

detail) to the second motion to reconsider (Answer, Annex 4); so that even if it were true

that respondents were not given the full 3 days' notice they were not deprived of any

substantial right. Therefore, the claim that the first order of dismissal had become final and

unappealable must be overruled.

It is well to observe in this regard that since a motion to dismiss is not a responsive

pleading, the plaintiff-petitioner was entitled as of right to amend the original dismissed

complaint. In Paeste vs. Jaurigue 94 Phil. 179, 181, this Court ruled as follows:

Appellants contend that the lower court erred in not admitting their amended

complaint and in holding that their action had already prescribed. Appellants are right on

both counts.

Amendments to pleadings are favored and should be liberally allowed in the

furtherance of justice. (Torres vs. Tomacruz, 49 Phil. 913). Moreover, under section 1 of Rule

17, Rules of Court, a party may amend his pleading once as a matter of course, that is,

without leave of court, at any time before a responsive pleading is served. A motion to

dismiss is not a "responsive pleading". (Moran on the Rules of Court, vol. 1, 1952, ed., p.

376). As plaintiffs amended their complaint before it was answered, the motion to admit the

amendment should not have been denied. It is true that the amendment was presented after

the original complaint had been ordered dismissed. But that order was not yet final for it

was still under reconsideration.

The foregoing observations leave this Court free to discuss the main issue in this

petition. Did the court below abuse its discretion in ruling that a contract for personal

services involving more than P500.00 was either invalid of unenforceable under the last

paragraph of Article 1358 of the Civil Code of the Philippines?

We hold that there was abuse, since the ruling herein contested betrays a basic and

lamentable misunderstanding of the role of the written form in contracts, as ordained in the

present Civil Code.

In the matter of formalities, the contractual system of our Civil Code still follows that

of the Spanish Civil Code of 1889 and of the "Ordenamiento de Alcala" 2 of upholding the

spirit and intent of the parties over formalities: hence, in general, contracts are valid and


4/21

binding from their perfection regardless of form whether they be oral or written. This is plain

from Articles 1315 and 1356 of the present Civil Code. Thus, the first cited provision

prescribes:

ART. 1315. Contracts are perfected by mere consent, and from that moment the

parties are bound not only to the fulfillment of what has been expressly stipulated but also

to all the consequences which, according to their nature, may be in keeping with good faith,

usage and law. (Emphasis supplied)

Concordantly, the first part of Article 1356 of the Code Provides:

ART. 1356. Contracts shall be obligatory in whatever form they may have been entered

into, provided all the essential requisites for their validity are present.... (Emphasis supplied)

These essential requisites last mentioned are normally (1) consent (2) proper subject

matter, and (3) consideration or causa for the obligation assumed (Article 1318). 3 So that

once the three elements exist, the contract is generally valid and obligatory, regardless of

the form, oral or written, in which they are couched.lawphi1.nt

To this general rule, the Code admits exceptions, set forth in the second portion of

Article 1356:

However, when the law requires that a contract be in some form in order that it may

be valid or enforceable, or that a contract be proved in a certain way, that requirement is

absolute and indispensable....

It is thus seen that to the general rule that the form (oral or written) is irrelevant to

the binding effect inter partes of a contract that possesses the three validating elements of

consent, subject matter, and causa, Article 1356 of the Code establishes only two

exceptions, to wit:

(a) Contracts for which the law itself requires that they be in some particular form (writing)

in order to make themvalid and enforceable (the so-called solemn contracts). Of these the

typical example is the donation of immovable property that the law (Article 749) requires to

be embodied in a public instrument in order "that the donation may be valid", i.e., existing or

binding. Other instances are the donation of movables worth more than P5,000.00 which

must be in writing, "otherwise the donation shall be void" (Article 748); contracts to pay

interest on loans (mutuum) that must be "expressly stipulated in writing" (Article 1956);

and the agreements contemplated by Article 1744, 1773, 1874 and 2134 of the present Civil

Code.

(b) Contracts that the law requires to be proved by some writing (memorandum) of itsterms, as in those covered by the old Statute of Frauds, now Article 1403(2) of the Civil

Code. Their existence not being provable by mere oral testimony (unless wholly or partly

executed), these contracts are exceptional in requiring a writing embodying the terms

thereof for their enforceability by action in court.

The contract sued upon by petitioner herein (compensation for services) does not

come under either exception. It is true that it appears included in Article 1358, last clause,


5/21

providing that "all other contracts where the amount involved exceeds five hundred pesos

must appear in writing, even a private one." But Article 1358 nowhere provides that the

absence of written form in this case will make the agreement invalid or unenforceable. On

the contrary, Article 1357 clearly indicates that contracts covered by Article 1358 are

binding and enforceable by action or suit despite the absence of writing.

ART. 1357. If the law requires a document or other special form, as in the acts and

contracts enumerated in the following article, the contracting parties may compel each other

to observe that form, once the contract has been perfected. This right may be exercised

simultaneously with the action the contract. (Emphasis supplied) .

It thus becomes inevitable to conclude that both the court a quo as well as the private

respondents herein were grossly mistaken in holding that because petitioner Dauden's

contract for services was not in writing the same could not be sued upon, or that her

complaint should be dismissed for failure to state a cause of action because it did not plead

any written agreement.

The basic error in the court's decision lies in overlooking that in our contractual systemit is not enough that the law should require that the contract be in writing, as it does in

Article 1358. The law must further prescribe that without the writing the contract is not

valid or not enforceable by action.

WHEREFORE, the order dismissing the complaint is set aside, and the case is ordered

remanded to the court of origin for further proceedings not at variance with this decision.

Costs to be solidarity paid by private respondents Hollywood Far East Productions,

Inc., and Ramon Valenzuela.

Dizon, Makalintal, Zaldivar, Sanchez, Fernando, Teehankee and Barredo, JJ., concur.

Concepcion, C.J. and Castro, J., are on leave.

Capistrano, J., took no part.

FIRST DIVISION


6/21

[G.R. No. 140487. April 2, 2001]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. LEON SILIM and ILDEFONSAMANGUBAT, respondents.

D E C I S I O N

KAPUNAN, J.:

Before the Court is a petition for review under Rule 45 seeking the reversal of theDecision of the Court of Appeals in CA-G.R. No. 43840, entitled Leon Silim, et al. vs. WilfredoPalma, et al., which declared null and void the donation made by respondents of a parcel ofland in favor of the Bureau of Public Schools, Municipality of Malangas, Zamboanga del Sur.

The antecedents of this case are as follows:

On 17 December 1971, respondents, the Spouses Leon Silim and Ildefonsa Mangubat,donated a 5,600 square meter parcel of land in favor of the Bureau of Public Schools,Municipality of Malangas, Zamboanga del Sur (BPS). In the Deed of Donation, respondentsimposed the condition that the said property should be used exclusively and forever forschool purposes only.[1]This donation was accepted by Gregorio Buendia, the DistrictSupervisor of BPS, through an Affidavit of Acceptance and/or Confirmation of Donation.

Through a fund raising campaign spearheaded by the Parent-Teachers Association ofBarangay Kauswagan, a school building was constructed on the donated land. However, theBagong Lipunan school building that was supposed to be allocated for the donated parcel ofland in Barangay Kauswagan could not be released since the government required that it bebuilt upon a one (1) hectare parcel of land. To remedy this predicament, Assistant SchoolDivision Superintendent of the Province of Zamboanga del Sur, Sabdani Hadjirol, authorizedDistrict Supervisor Buendia to officially transact for the exchange of the one-half (1/2)hectare old school site of Kauswagan Elementary School to a new and suitable location

which would fit the specifications of the government. Pursuant to this, District SupervisorBuendia and Teresita Palma entered into a Deed of Exchange whereby the donated lot wasexchanged with the bigger lot owned by the latter. Consequently, the Bagong Lipunanschool buildings were constructed on the new school site and the school building previouslyerected on the donated lot was dismantled and transferred to the new location.

When respondent Leon Silim saw, to his surprise, that Vice-Mayor Wilfredo Palma wasconstructing a house on the donated land, he asked the latter why he was building a houseon the property he donated to BPS. Vice Mayor Wilfredo Palma replied that he is already theowner of the said property. Respondent Leon Silim endeavored to stop the construction ofthe house on the donated property but Vice-Mayor Wilfredo Palma advised him to just file acase in court.

On February 10, 1982, respondents filed a Complaint for Revocation and Cancellation ofConditional Donation, Annulment of Deed of Exchange and Recovery of Possession andOwnership of Real Property with damages against Vice Mayor Wilfredo Palma, TeresitaPalma, District Supervisor Buendia and the BPS before the Regional Trial Court of PagadianCity, Branch 21. In its Decision dated 20 August 1993, the trial court dismissed thecomplaint for lack of merit.[2]The pertinent portion of the decision reads:

Thus, it is the considered view of this Court that there was no breach or violation of thecondition imposed in the subject Deed of Donation by the donee. The exchange is proper
http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn1


7/21

since it is still for the exclusive use for school purposes and for the expansion andimprovement of the school facilities within the community. The Deed of Exchange is but acontinuity of the desired purpose of the donation made by plaintiff Leon Silim.

In sum, it may be safely stated that the aforesaid transaction of exchange is a (sic)exception to the law invoked by the plaintiffs (Art. 764, Civil Code). The donee, being the

State had the greater reciprocity of interest in the gratuitous and onerous contract ofdonation. It would be illogical and selfish for the donor to technically preclude the doneefrom expanding its school site and improvement of its school facilities, a paramountobjective of the donee in promoting the general welfare and interests of the people ofBarangay Kauswagan. But it is a well-settled rule that if the contract is onerous, such as theDeed of Donation in question, the doubt shall be settled in favor of the greatest reciprocityof interests, which in the instant case, is the donee.

x x x

WHEREFORE, in view of all the foregoing, judgement is hereby rendered:

1. Dismissing the complaint for lack of merit;2. Dismissing the counterclaim for the sake of harmony and reconciliation between

the parties;

3. With costs against plaintiffs.

SO ORDERED.[3]

Not satisfied with the decision of the trial court, respondents elevated the case to theCourt of Appeals. In its Decision dated 22 October 1999, the Court of Appeals reversed thedecision of the trial court and declared the donation null and void on the grounds that thedonation was not properly accepted and the condition imposed on the donation was

violated.

[4]

Hence, the present case where petitioner raises the following issues:

I. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION NULLAND VOID DUE TO AN INVALID ACCEPTANCE BY THE DONEE.

II. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION NULLAND VOID DUE TO AN ALLEGED VIOLATION OF A CONDITION IN THEDONATION.[5]

The Court gives DUE COURSE to the petition.

Petitioner contends that the Court of Appeals erred in declaring the donation null andvoid for the reason that the acceptance was not allegedly done in accordance with Articles

745[6]and 749[7]of the New Civil Code.

We agree.

Donations, according to its purpose or cause, may be categorized as: (1) pure or simple;(2) remuneratory or compensatory; (3) conditional or modal; and (4) onerous. A pure orsimple donation is one where the underlying cause is plain gratuity.[8]This is donation in itstruest form. On the other hand, a remuneratory or compensatory donation is one made forthe purpose of rewarding the donee for past services, which services do not amount to ademandable debt.[9]A conditional or modal donation is one where the donation is made in
http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn3


8/21

consideration of future services or where the donor imposes certain conditions, limitationsor charges upon the donee, the value of which is inferior than that of the donationgiven.[10]Finally, an onerous donation is that which imposes upon the donee a reciprocalobligation or, to be more precise, this is the kind of donation made for a valuableconsideration, the cost of which is equal to or more than the thing donated.[11]

Of all the foregoing classifications, donations of the onerous type are the mostdistinct. This is because, unlike the other forms of donation, the validity of and the rightsand obligations of the parties involved in an onerous donation is completely governed not bythe law on donations but by the law on contracts. In this regard, Article 733 of the New CivilCode provides:

Art. 733. Donations with an onerous cause shall be governed by the rules on contracts, andremuneratory donations by the provisions of the present Title as regards that portion whichexceeds the value of the burden imposed.

The donation involved in the present controversy is one which is onerous since there is aburden imposed upon the donee to build a school on the donated property.[12]

The Court of Appeals held that there was no valid acceptance of the donation because:xxx

Under the law the donation is void if there is no acceptance. The acceptance may either be inthe same document as the deed of donation or in a separate public instrument. If theacceptance is in a separate instrument, "the donor shall be notified thereof in an authenticform, and his step shall be noted in both instruments.

"Title to immovable property does not pass from the donor to the donee by virtue of a deedof donation until and unless it has been accepted in a public instrument and the donor dulynoticed thereof.(Abellera vs. Balanag, 37 Phils. 85; Alejandro vs. Geraldez, 78 SCRA 245). Ifthe acceptance does not appear in the same document, it must be made in another. Solemn

words are not necessary; it is sufficient if it shows the intention to accept, But in this case, itis necessary that formal notice thereof be given to the donor and the fact that due notice hasbeen given it must be noted in both instruments (that containing the offer to donate andthat showing acceptance). Then and only then is the donation perfected. (11 Manresa 155-11, cited in Vol. II, Civil Code of the Philippines by Tolentino.)."

This Court perused carefully the Deed of Donation marked as exhibit "A" and "1" todetermine whether there was acceptance of the donation. This Court found none. We furtherexamined the record if there is another document which embodies the acceptance, we foundone. Although the Court found that in the offer of exhibits of the defendants, a supposedaffidavit of acceptance and/or confirmation of the donation, marked as exhibit "8" appearsto have been offered.

However, there is nothing in the record that the exhibits offered by the defendants havebeen admitted nor such exhibits appear on record.

Assuming that there was such an exhibit, the said supposed acceptance was not noted in theDeed of Donation as required under Art. 749 of the Civil Code. And according to Manresa,supra, a noted civilist, the notation is one of the requirements of perfecting a donation. Inother words, without such a notation, the contract is not perfected contract. Since thedonation is not perfected, the contract is therefore not valid.[13]
http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn10


9/21

xxx

We hold that there was a valid acceptance of the donation.

Sections 745 and 749 of the New Civil Code provide:

ART. 745. The donee must accept the donation personally, or through an authorized person

with a special power for the purpose, or with a general and sufficient power; otherwise thedonation shall be void.

ART. 749. In order that the donation of an immovable may be laid, it must be made in apublic document, specifying therein the property donated and the value of the charge whichthe donee must satisfy.

The acceptance may be made in the same deed of donation or in a separate publicdocument, but it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in anauthentic form, and this step shall be noted in both instruments.

Private respondents, as shown above, admit that in the offer of exhibits by thedefendants in the trial court, an affidavit of acceptance and/or confirmation of the donation,marked as Exhibit "8," was offered in evidence. However, private respondents now questionthis exhibit because, according to them "there is nothing in the record that the exhibitsoffered by the defendants have been admitted nor such exhibit appear on record."

Respondents' stance does not persuade. The written acceptance of the donation havingbeen considered by the trial court in arriving at its decision, there is the presumption thatthis exhibit was properly offered and admitted by the court.

Moreover, this issue was never raised in the Court of Appeals. Nowhere in their brief didrespondents question the validity of the donation on the basis of the alleged defect in the

acceptance thereof. If there was such a defect, why did it take respondents more than ten(10) years from the date of the donation to question its validity? In the very least, they areguilty of estoppel.[14]

Respondents further argue that assuming there was a valid acceptance of the donation,the acceptance was not noted in the Deed of Donation as required in Article 749 of the CivilCode, hence, the donation is void.

The purpose of the formal requirement for acceptance of a donation is to ensure thatsuch acceptance is duly communicated to the donor. Thus, in Pajarillo vs. Intermediate

Appellate Court,[15]the Court held:

There is no question that the donation was accepted in a separate public instrument andthat it was duly communicated to the donors. Even the petitioners cannot deny this. Butwhat they do contend is that such acceptance was not "noted in both instruments," meaningthe extrajudicial partition itself and the instrument of acceptance, as required by the CivilCode.

That is perfectly true. There is nothing in either of the two instruments showing that"authentic notice" of the acceptance was made by Salud to Juana and Felipe. And while thefirst instrument contains the statement that "the donee does hereby accept this donationand does hereby express her gratitude for the kindness and liberality of the donor," the only
http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn14http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn14http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn14http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn15http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn15http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn15http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn15http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn14


10/21

signatories thereof were Felipe Balane and Juana Balane de Suterio. That was in fact thereason for the separate instrument of acceptance signed by Salud a month later.

A strict interpretation of Article 633 can lead to no other conclusion that the annulment ofthe donation for being defective in form as urged by the petitioners. This would be inkeeping with the unmistakable language of the above-quoted provision. However, we find

that under the circumstances of the present case, a literal adherence to the requirement ofthe law might result not in justice to the parties but conversely a distortion of theirintentions. It is also a policy of the Court to avoid such as interpretation.

The purpose of the formal requirement is to insure that the acceptance of the donation isduly communicated to the donor. In the case at bar, it is not even suggested that Juana wasunaware of the acceptance for she in fact confirmed it later and requested that the donatedland be not registered during her lifetime by Salud. Given this significant evidence, the Courtcannot in conscience declare the donation ineffective because there is no notation in theextrajudicial settlement of the donee's acceptance. That would be placing too much stresson mere form over substance. It would also disregard the clear reality of the acceptance ofthe donation as manifested in the separate instrument dated June 20, 1946, and as lateracknowledged by Juan.

In the case at bar, a school building was immediately constructed after the donationwas executed. Respondents had knowledge of the existence of the school building put up onthe donated lot through the efforts of the Parents-Teachers Association of BarangayKauswagan. It was when the school building was being dismantled and transferred to thenew site and when Vice-Mayor Wilfredo Palma was constructing a house on the donatedproperty that respondents came to know of the Deed of Exchange. The actual knowledge byrespondents of the construction and existence of the school building fulfilled the legalrequirement that the acceptance of the donation by the donee be communicated to thedonor.

On respondents' claim, which was upheld by the Court of Appeals, that the acceptance

by BPS District Supervisor Gregorio Buendia of the donation was ineffective because of theabsence of a special power of attorney from the Republic of the Philippines, it is undisputedthat the donation was made in favor of the Bureau of Public Schools. Such being the case,his acceptance was authorized under Section 47 of the 1987 Administrative Code whichstates:

SEC. 47. Contracts and Conveyances. - Contracts or conveyances may be executed for and inbehalf of the Government or of any of its branches, subdivisions, agencies, orinstrumentalities, whenever demanded by the exigency or exigencies of the service and aslong as the same are not prohibited by law.

Finally, it is respondents' submission that the donee, in exchanging the donated lot witha bigger lot, violated the condition in the donation that the lot be exclusively used for school

purposes only.

What does the phrase "exclusively used for school purposes" convey? "School" is simplyan institution or place of education.[16]"Purpose" is defined as "that which one sets beforehim to accomplish or attain; an end, intention, or aim, object, plan, project. Term issynonymous with the ends sought, an object to be attained, an intention,etc."[17]"Exclusive" means "excluding or having power to exclude (as by preventing entranceor debarring from possession, participation, or use); limiting or limited to possession, controlor use.[18]
http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn16http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn16http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn16http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn17http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn17http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn18http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn18http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn18http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn18http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn17http://sc.judiciary.gov.ph/jurisprudence/2001/apr2001/140487.htm#_edn16


11/21

Without the slightest doubt, the condition for the donation was not in any way violatedwhen the lot donated was exchanged with another one. The purpose for the donationremains the same, which is for the establishment of a school. The exclusivity of the purposewas not altered or affected. In fact, the exchange of the lot for a much bigger one was infurtherance and enhancement of the purpose of the donation. The acquisition of the biggerlot paved the way for the release of funds for the construction of Bagong Lipunan school

building which could not be accommodated by the limited area of the donated lot.WHEREFORE, the decision of the Court of Appeals is hereby REVERSED and SET ASIDE

and the decision of the Regional Trial Court is REINSTATED.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 174978 July 31, 2013

SALLY YOSHIZAKI, Petitioner,vs.JOY TRAINING CENTER OF AURORA, INC., Respondent.

D E C I S I O N

BRION, J.:

We resolve the petition for review on certiorari1filed by petitioner Sally Yoshizaki tochallenge the February 14, 2006 Decision2and the October 3, 2006 Resolution3of the Courtof Appeals (CA) in CA-G.R. CV No. 83773.

The Factual Antecedents

Respondent Joy Training Center of Aurora, Inc. (Joy Training) is a non-stock, non-profitreligious educational institution. It was the registered owner of a parcel of land and thebuilding thereon (real properties) located in San Luis Extension Purok No. 1, BarangayBuhangin, Baler, Aurora. The parcel of land was designated as Lot No. 125-L and wascovered by Transfer Certificate of Title (TCT) No. T-25334.4
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt1http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt1http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt1http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt2http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt2http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt3http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt3http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt4http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt4http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt4http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt4http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt3http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt2http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt1


12/21

On November 10, 1998, the spouses Richard and Linda Johnson sold the real properties, aWrangler jeep, and other personal properties in favor of the spouses Sally and Yoshio

Yoshizaki. On the same date, a Deed of Absolute Sale5and a Deed of Sale of MotorVehicle6were executed in favor of the spouses Yoshizaki. The spouses Johnson weremembers of Joy Trainings board of trustees at the time of sale. On December 7, 1998, TCTNo. T-25334 was cancelled and TCT No. T-260527was issued in the name of the spouses

Yoshizaki.

On December 8, 1998, Joy Training, represented by its Acting Chairperson Reuben V. Rubio,filed an action for the Cancellation of Sales and Damages with prayer for the issuance of aTemporary Restraining Order and/or Writ of Preliminary Injunction against the spouses

Yoshizaki and the spouses Johnson before the Regional Trial Court of Baler, Aurora(RTC).8On January 4, 1999, Joy Training filed a Motion to Amend Complaint with theattached Amended Complaint. The amended complaint impleaded Cecilia A. Abordo, officer-in-charge of the Register of Deeds of Baler, Aurora, as additional defendant. The RTCgranted the motion on the same date.9

In the complaint, Joy Training alleged that the spouses Johnson sold its properties withoutthe requisite authority from the board of directors.10It assailed the validity of a boardresolution dated September 1, 199811which purportedly granted the spouses Johnson theauthority to sell its real properties. It averred that only a minority of the board, composed ofthe spouses Johnson and Alexander Abadayan, authorized the sale through the resolution. Ithighlighted that the Articles of Incorporation provides that the board of trustees consists ofseven members, namely: the spouses Johnson, Reuben, Carmencita Isip, Dominador Isip,Miraflor Bolante, and Abelardo Aquino.12

Cecilia and the spouses Johnson were declared in default for their failure to file an Answerwithin the reglementary period.13On the other hand, the spouses Yoshizaki filed their

Answer with Compulsory Counterclaims on June 23, 1999. They claimed that Joy Trainingauthorized the spouses Johnson to sell the parcel of land. They asserted that a majority ofthe board of trustees approved the resolution. They maintained that the actual members of

the board of trustees consist of five members, namely: the spouses Johnson, Reuben,Alexander, and Abelardo. Moreover, Connie Dayot, the corporate secretary, issued acertification dated February 20, 199814authorizing the spouses Johnson to act on JoyTrainings behalf. Furthermore, they highlightedthat the Wrangler jeep and other personalproperties were registered in the name of the spouses Johnson.15Lastly, they assailed theRTCs jurisdiction over the case. They posited that the case is an intra-corporate disputecognizable by the Securities and Exchange Commission (SEC).16

After the presentation of their testimonial evidence, the spouses Yoshizaki formally offeredin evidence photocopies of the resolution and certification, among others.17Joy Trainingobjected to the formal offer of the photocopied resolution and certification on the groundthat they were not the best evidence of their contents.18In an Order19dated May 18, 2004,the RTC denied the admission of the offered copies.

The RTC Ruling

The RTC ruled in favor of the spouses Yoshizaki. It found that Joy Training owned the realproperties. However, it held that the sale was valid because Joy Training authorized thespouses Johnson to sell the real properties. It recognized that there were only five actualmembers of the board of trustees; consequently, a majority of the board of trustees validly
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt5http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt5http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt6http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt6http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt7http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt7http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt8http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt8http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt8http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt9http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt9http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt9http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt10http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt10http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt10http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt11http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt11http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt12http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt12http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt12http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt13http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt13http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt13http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt14http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt14http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt15http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt15http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt15http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt16http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt16http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt16http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt17http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt17http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt17http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt18http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt18http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt18http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt19http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt19http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt19http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt19http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt18http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt17http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt16http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt15http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt14http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt13http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt12http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt11http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt10http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt9http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt8http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt7http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt6http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt5


13/21

authorized the sale. It also ruled that the sale of personal properties was valid because theywere registered in the spouses Johnsons name.20

Joy Training appealed the RTC decision to the CA.

The CA Ruling

The CA upheld the RTCs jurisdiction over the case but reversed its ruling with respect to thesale of real properties. It maintained that the present action is cognizable by the RTCbecause it involves recovery of ownership from third parties.

It also ruled that the resolution is void because it was not approved by a majority of theboard of trustees. It stated that under Section 25 of the Corporation Code, the basis fordetermining the composition of the board of trustees is the list fixed in the articles ofincorporation. Furthermore, Section 23 of the Corporation Code provides that the board oftrustees shall hold office for one year and until their successors are elected and qualified.Seven trustees constitute the board since Joy Training did not hold an election after itsincorporation.

The CA did not also give any probative value to the certification. It stated that thecertification failed to indicate the date and the names of the trustees present in the meeting.Moreover, the spouses Yoshizaki did not present the minutes that would prove that thecertification had been issued pursuant to a board resolution.21The CA also denied22thespouses Yoshizakis motion for reconsideration, prompting Sally23to file the present petition.

The Petition

Sally avers that the RTC has no jurisdiction over the case. She points out that the complaintwas principally for the nullification of a corporate act. The transfer of the SECs original andexclusive jurisdiction to the RTC24does not have any retroactive application because

jurisdiction is a substantive matter.

She argues that the spouses Johnson were authorized to sell the parcel of land and that shewas a buyer in good faith because she merely relied on TCT No. T-25334. The title states thatthe spouses Johnson are Joy Trainings representatives.

She also argues that it is a basic principle that a party dealing with a registered land neednot go beyond the certificate of title to determine the condition of the property. In fact, theresolution and the certification are mere reiterations of the spouses Johnsons authority inthe title to sell the real properties. She further claims that the resolution and thecertification are not even necessary to clothe the spouses Johnson with the authority to sellthe disputed properties. Furthermore, the contract of agency was subsisting at the time ofsale because Section 108 of Presidential Decree No. (PD) 1529 requires that the revocation

of authority must be approved by a court of competent jurisdiction and no revocation wasreflected in the certificate of title.25

The Case for the Respondent

In its Comment26and Memorandum,27Joy Training takes the opposite view that the RTC hasjurisdiction over the case. It posits that the action is essentially for recovery of property and
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt20http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt20http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt20http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt21http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt21http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt21http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt22http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt22http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt23http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt23http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt24http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt24http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt25http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt25http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt25http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt26http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt26http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt26http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt27http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt27http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt27http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt27http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt26http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt25http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt24http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt23http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt22http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt21http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt20


14/21

is therefore a case cognizable by the RTC. Furthermore, Sally is estopped from questioningthe RTCs jurisdiction because she seeks to reinstate the RTC ruling in the present case.

Joy Training maintains that it did not authorize the spouses Johnson to sell its realproperties. TCT No. T-25334 does not specifically grant the authority to sell the parcel ofland to the spouses Johnson. It further asserts that the resolution and the certification

should not be given any probative value because they were not admitted in evidence by theRTC. It argues that the resolution is void for failure to comply with the voting requirementsunder Section 40 of the Corporation Code. It also posits that the certification is void becauseit lacks material particulars.

The Issues

The case comes to us with the following issues:

1) Whether or not the RTC has jurisdiction over the present case; and

2) Whether or not there was a contract of agency to sell the real properties between

Joy Training and the spouses Johnson.

3) As a consequence of the second issue, whether or not there was a valid contract ofsale of the real properties between Joy Training and the spouses Yoshizaki.

Our Ruling

We find the petition unmeritorious.

The RTC has jurisdiction over disputes concerning the application of the Civil Code

Jurisdiction over the subject matter is the power to hear and determine cases of the general

class to which the proceedings before a court belong.28It is conferred by law. Theallegations in the complaint and the status or relationship of the parties determine whichcourt has jurisdiction over the nature of an action.29The same test applies in ascertainingwhether a case involves an intra-corporate controversy.30

The CA correctly ruled that the RTC has jurisdiction over the present case. Joy Training seeksto nullify the sale of the real properties on the ground that there was no contract of agencybetween Joy Training and the spouses Johnson. This was beyond the ambit of the SECsoriginal and exclusive jurisdiction prior to the enactment of Republic Act No. 8799 whichonly took effect on August 3, 2000. The determination of the existence of a contract ofagency and the validity of a contract of sale requires the application of the relevantprovisions of the Civil Code. It is a well-settled rule that "disputes concerning the application

of the Civil Code are properly cognizable by courts of general jurisdiction."

31

Indeed, nospecial skill requiring the SECs technical expertise is necessary for the disposition of thisissue and of this case.

The Supreme Court may review questions of fact in a petition for review on certiorari whenthe findings of fact by the lower courts are conflicting

We are aware that the issues at hand require us to review the pieces of evidence presentedby the parties before the lower courts. As a general rule, a petition for review on certiorari
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt28http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt28http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt28http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt29http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt29http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt29http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt30http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt30http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt30http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt31http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt31http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt31http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt31http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt30http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt29http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt28


15/21

precludes this Court from entertaining factual issues; we are not duty-bound to analyzeagain and weigh the evidence introduced in and considered by the lower courts. However,the present case falls under the recognized exception that a review of the facts is warrantedwhen the findings of the lower courts are conflicting.32Accordingly, we will examine therelevant pieces of evidence presented to the lower court.

There is no contract of agency between Joy Training and the spouses Johnson to sell theparcel of land with its improvements

Article 1868 of the Civil Code defines a contract of agency as a contract whereby a person"binds himself to render some service or to do something in representation or on behalf ofanother, with the consent or authority of the latter." It may be express, or implied from theacts of the principal, from his silence or lack of action, or his failure to repudiate the agency,knowing that another person is acting on his behalf without authority.

As a general rule, a contract of agency may be oral. However, it must be written when thelaw requires a specific form.33Specifically, Article 1874 of the Civil Code provides that thecontract of agency must be written for the validity of the sale of a piece of land or any

interest therein. Otherwise, the sale shall be void. A related provision, Article 1878 of theCivil Code, states that special powers of attorney are necessary to convey real rights overimmovable properties.

The special power of attorney mandated by law must be one that expressly mentions a saleor that includes a sale as a necessary ingredient of the authorized act. We unequivocablydeclared in Cosmic Lumber Corporation v. Court of Appeals34that a special power ofattorneymust express the powers of the agent in clear and unmistakable language for theprincipal to confer the right upon an agent to sell real estate. When there is any reasonabledoubt that the language so used conveys such power, no such construction shall be giventhe document. The purpose of the law in requiring a special power of attorney in thedisposition of immovable property is to protect the interest of an unsuspecting owner frombeing prejudiced by the unwarranted act of another and to caution the buyer to assure

himself of the specific authorization of the putative agent.35

In the present case, Sally presents three pieces of evidence which allegedly prove that JoyTraining specially authorized the spouses Johnson to sell the real properties: (1) TCT No. T-25334, (2) the resolution, (3) and the certification. We quote the pertinent portions of thesedocuments for a thorough examination of Sallys claim. TCT No. T-25334, entered in theRegistry of Deeds on March 5, 1998, states:

A parcel of land x x x is registered in accordance with the provisions of the PropertyRegistration Decree in the name of JOY TRAINING CENTER OF AURORA, INC., Rep. by Sps.RICHARD A. JOHNSON and LINDA S. JOHNSON, both of legal age, U.S. Citizen, and residentsof P.O. Box 3246, Shawnee, Ks 66203, U.S.A.36(emphasis ours)

On the other hand, the fifth paragraph of the certification provides:

Further, Richard A. and Linda J. Johnson were given FULL AUTHORITY for ALL SIGNATORYpurposes for the corporation on ANY and all matters and decisions regarding the propertyand ministry here. They will follow guidelines set forth according to their appointment andministerial and missionary training and in that, they will formulate and come up with by-laws which will address and serve as governing papers over the center and corporation. They
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt32http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt32http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt32http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt33http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt33http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt33http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt34http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt34http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt34http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt35http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt35http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt35http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt36http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt36http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt36http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt36http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt35http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt34http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt33http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt32


16/21

are to issue monthly and quarterly statements to all members of thecorporation.37(emphasis ours)

The resolution states:

We, the undersigned Board of Trustees (in majority) have authorized the sale of land and

building owned by spouses Richard A. and Linda J. Johnson (as described in the title SN No.5102156 filed with the Province of Aurora last 5th day of March, 1998. These proceeds aregoing to pay outstanding loans against the project and the dissolution of the corporationshall follow the sale. This is a religious, non-profit corporation and no profits or stocks areissued.38(emphasis ours)

The above documents do not convince us of the existence of the contract of agency to sellthe real properties. TCT No. T-25334 merely states that Joy Training is represented by thespouses Johnson. The title does not explicitly confer to the spouses Johnson the authority tosell the parcel of land and the building thereon. Moreover, the phrase "Rep. by Sps.RICHARD A. JOHNSON and LINDA S. JOHNSON"39only means that the spouses Johnsonrepresented Joy Training in land registration.

The lower courts should not have relied on the resolution and the certification in resolvingthe case.1wphi1The spouses Yoshizaki did not produce the original documents during trial.They also failed to show that the production of pieces of secondary evidence falls under theexceptions enumerated in Section 3, Rule 130 of the Rules of Court.40Thus, the general rule

that no evidence shall be admissible other than the original document itself when thesubject of inquiry is the contents of a documentapplies.41

Nonetheless, if only to erase doubts on the issues surrounding this case, we declare thateven if we consider the photocopied resolution and certification, this Court will still arrive atthe same conclusion.

The resolution which purportedly grants the spouses Johnson a special power of attorney isnegated by the phrase "land and building owned by spouses Richard A. and Linda J.Johnson."42Even if we disregard such phrase, the resolution must be given scantconsideration. We adhere to the CAs position that the basis for determining the board oftrustees composition is the trustees as fixed in the articles of incorporation and not theactual members of the board. The second paragraph of Section 2543of the Corporation Codeexpressly provides that a majority of the number of trustees as fixed in the articles ofincorporation shall constitute a quorum for the transaction of corporate business.

Moreover, the certification is a mere general power of attorney which comprises all of JoyTrainings business.44Article 1877 of the Civil Code clearly states that "an agency couched ingeneral terms comprises only acts of administration, even if the principal should state thathe withholds no power or that the agent may execute such acts as he may consider

appropriate, or even though the agency should authorize a general and unlimitedmanagement."45

The contract of sale is unenforceable

Necessarily, the absence of a contract of agency renders the contract of saleunenforceable;46Joy Training effectively did not enter into a valid contract of sale with thespouses Yoshizaki. Sally cannot also claim that she was a buyer in good faith. Shemisapprehended the rule that persons dealing with a registered land have the legal right to
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt37http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt37http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt37http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt38http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt38http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt38http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt39http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt39http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt39http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt40http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt40http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt40http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt41http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt41http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt41http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt42http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt42http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt42http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt43http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt43http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt44http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt44http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt45http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt45http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt45http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt46http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt46http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt46http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt46http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt45http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt44http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt43http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt42http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt41http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt40http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt39http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt38http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt37


17/21

rely on the face of the title and to dispense with the need to inquire further, except when theparty concerned has actual knowledge of facts and circumstances that would impel areasonably cautious man to make such inquiry.47This rule applies when the ownership of aparcel of land is disputed and not when the fact of agency is contested.

At this point, we reiterate the established principle that persons dealing with an agent must

ascertain not only the fact of agency, but also the nature and extent of the agentsauthority.48A third person with whom the agent wishes to contract on behalf of the principalmay require the presentation of the power of attorney, or the instructions as regards theagency.49The basis for agency is representation and a person dealing with an agent is putupon inquiry and must discover on his own peril the authority of the agent.50Thus, Sallybought the real properties at her own risk; she bears the risk of injury occasioned by hertransaction with the spouses Johnson.

WHEREFORE, premises considered, the assailed Decision dated February 14, 2006 andResolution dated October 3, 2006 of the Court of Appeals are hereby AFFIRMED and thepetition is hereby DENIED for lack of merit.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 78903 February 28, 1990

SPS. SEGUNDO DALION AND EPIFANIA SABESAJE-DALION, petitioners,vs.THE HONORABLE COURT OF APPEALS AND RUPERTO SABESAJE, JR., respondents.

Francisco A. Puray, Sr. for petitioners.

Gabriel N. Duazo for private respondent.

MEDIALDEA,J.:

This is a petition to annul and set aside the decision of the Court of Appeals rendered on May26, 1987, upholding the validity of the sale of a parcel of land by petitioner Segundo Dalion(hereafter, "Dalion") in favor of private respondent Ruperto Sabesaje, Jr. (hereafter,"Sabesaje"), described thus:

A parcel of land located at Panyawan, Sogod, Southern Leyte, declared in thename of Segundo Dalion, under Tax Declaration No. 11148, with an area of
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt47http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt47http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt47http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt48http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt48http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt48http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt49http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt49http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt49http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt50http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt50http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt50http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt50http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt49http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt48http://www.lawphil.net/judjuris/juri2013/jul2013/gr_174978_2013.html#fnt47


18/21

8947 hectares, assessed at P 180.00, and bounded on the North, by SergioDestriza and Titon Veloso, East, by Feliciano Destriza, by Barbara Bonesa (sic);and West, by Catalino Espina. (pp. 36-37, Rollo)

The decision affirms in totothe ruling of the trial court 1issued on January 17, 1984, thedispositive portion of which provides as follows:

WHEREFORE, IN VIEW OF THE FOREGOING, the Court hereby rendersjudgment.

(a) Ordering the defendants to deliver to the plaintiff the parcel of landsubject of this case, declared in the name of Segundo Dalion previously underTax Declaration No. 11148 and lately under Tax Declaration No. 2297 (1974)and to execute the corresponding formal deed of conveyance in a publicdocument in favor of the plaintiff of the said property subject of this case,otherwise, should defendants for any reason fail to do so, the deed shall beexecuted in their behalf by the Provincial Sheriff or his Deputy;

(b) Ordering the defendants to pay plaintiff the amount of P2,000.00 asattorney's fees and P 500.00 as litigation expenses, and to pay the costs; and

(c) Dismissing the counter-claim. (p. 38, Rollo)

The facts of the case are as follows:

On May 28, 1973, Sabesaje sued to recover ownership of a parcel of land, based on a privatedocument of absolute sale, dated July 1, 1965 (Exhibit "A"), allegedly executed by Dalion,who, however denied the fact of sale, contending that the document sued upon is fictitious,his signature thereon, a forgery, and that subject land is conjugal property, which he and hiswife acquired in 1960 from Saturnina Sabesaje as evidenced by the "Escritura de Venta

Absoluta" (Exhibit "B"). The spouses denied claims of Sabesaje that after executing a deedof sale over the parcel of land, they had pleaded with Sabesaje, their relative, to be allowedto administer the land because Dalion did not have any means of livelihood. They admitted,however, administering since 1958, five (5) parcels of land in Sogod, Southern Leyte, whichbelonged to Leonardo Sabesaje, grandfather of Sabesaje, who died in 1956. They neverreceived their agreed 10% and 15% commission on the sales of copra and abaca,respectively. Sabesaje's suit, they countered, was intended merely to harass, preempt andforestall Dalion's threat to sue for these unpaid commissions.

From the adverse decision of the trial court, Dalion appealed, assigning errors some ofwhich, however, were disregarded by the appellate court, not having been raised in thecourt below. While the Court of Appeals duly recognizes Our authority to review matterseven if not assigned as errors in the appeal, We are not inclined to do so since a review of

the case at bar reveals that the lower court has judicially decided the case on its merits.

As to the controversy regarding the identity of the land, We have no reason to dispute theCourt of Appeals' findings as follows:

To be sure, the parcel of land described in Exhibit "A" is the same propertydeeded out in Exhibit "B". The boundaries delineating it from adjacent lots areidentical. Both documents detail out the following boundaries, to wit:


19/21

On the North-property of Sergio Destriza and Titon Veloso;

On the East-property of Feliciano Destriza;

On the South-property of Barbara Boniza and

On the West-Catalino Espina.

(pp. 41-42, Rollo)

The issues in this case may thus be limited to: a) the validity of the contract of sale of aparcel of land and b) the necessity of a public document for transfer of ownership thereto.

The appellate court upheld the validity of the sale on the basis of Secs. 21 and 23 of Rule 132of the Revised Rules of Court.

SEC. 21. Private writing, its execution and authenticity, how proved.-Beforeany private writing may be received in evidence, its due execution and

authenticity must be proved either:

(a) By anyone who saw the writing executed;

(b) By evidence of the genuineness of the handwriting of the maker; or

(c) By a subscribing witness

xxx xxx xxx

SEC. 23. Handwriting, how proved. The handwriting of a person may beproved by any witness who believes it to be the handwriting of such person,and has seen the person write, or has seen writing purporting to be his uponwhich the witness has acted or been charged, and has thus acquiredknowledge of the handwriting of such person. Evidence respecting thehandwriting may also be given by a comparison, made by the witness or thecourt, with writings admitted or treated as genuine by the party against whomthe evidence is offered, or proved to be genuine to the satisfaction of the

judge. (Rule 132, Revised Rules of Court)

And on the basis of the findings of fact of the trial court as follows:

Here, people who witnessed the execution of subject deed positively testifiedon the authenticity thereof. They categorically stated that it had been

executed and signed by the signatories thereto. In fact, one of such witnesses,Gerardo M. Ogsoc, declared on the witness stand that he was the one whoprepared said deed of sale and had copied parts thereof from the "Escritura De

Venta Absoluta" (Exhibit B) by which one Saturnina Sabesaje sold the sameparcel of land to appellant Segundo Dalion. Ogsoc copied the bounderiesthereof and the name of appellant Segundo Dalion's wife, erroneously writtenas "Esmenia" in Exhibit "A" and "Esmenia" in Exhibit "B". (p. 41, Rollo)

xxx xxx xxx


20/21

Against defendant's mere denial that he signed the document, the positivetestimonies of the instrumental Witnesses Ogsoc and Espina, aside from thetestimony of the plaintiff, must prevail. Defendant has affirmatively allegedforgery, but he never presented any witness or evidence to prove his claim offorgery. Each party must prove his own affirmative allegations (Section 1,Rule 131, Rules of Court). Furthermore, it is presumed that a person is

innocent of a crime or wrong (Section 5 (a),Idem), and defense should havecome forward with clear and convincing evidence to show that plaintiffcommitted forgery or caused said forgery to be committed, to overcome thepresumption of innocence. Mere denial of having signed, does not suffice toshow forgery.

In addition, a comparison of the questioned signatories or specimens (Exhs. A-2 and A-3) with the admitted signatures or specimens (Exhs. X and Y or 3-C)convinces the court that Exhs. A-2 or Z and A-3 were written by defendantSegundo Dalion who admitted that Exhs. X and Y or 3-C are his signatures.The questioned signatures and the specimens are very similar to each otherand appear to be written by one person.

Further comparison of the questioned signatures and the specimens with thesignatures Segundo D. Dalion appeared at the back of the summons (p. 9,Record); on the return card (p. 25, Ibid.); back of the Court Orders datedDecember 17, 1973 and July 30, 1974 and for October 7, 1974 (p. 54 & p. 56,respectively, Ibid.), and on the open court notice of April 13, 1983 (p.235, Ibid.) readily reveal that the questioned signatures are the signatures ofdefendant Segundo Dalion.

It may be noted that two signatures of Segundo D. Dalion appear on the faceof the questioned document (Exh. A), one at the right corner bottom of thedocument (Exh. A-2) and the other at the left hand margin thereof (Exh. A-3).The second signature is already a surplusage. A forger would not attempt to

forge another signature, an unnecessary one, for fear he may commit arevealing error or an erroneous stroke. (Decision, p. 10) (pp. 42-43, Rollo)

We see no reason for deviating from the appellate court's ruling (p. 44, Rollo) as wereiterate that

Appellate courts have consistently subscribed to the principle that conclusionsand findings of fact by the trial courts are entitled to great weight on appealand should not be disturbed unless for strong and cogent reasons, since it isundeniable that the trial court is in a more advantageous position to examinereal evidence, as well as to observe the demeanor of the witnesses whiletestifying in the case (Chase v. Buencamino, Sr., G.R. No. L-20395, May 13,

1985, 136 SCRA 365; Pring v. Court of Appeals, G.R. No. L-41605, August 19,1985, 138 SCRA 185)

Assuming authenticity of his signature and the genuineness of the document, Dalionnonetheless still impugns the validity of the sale on the ground that the same is embodied ina private document, and did not thus convey title or right to the lot in question since "actsand contracts which have for their object the creation, transmission, modification orextinction of real rights over immovable property must appear in a public instrument" (Art.1358, par 1, NCC).


21/21

This argument is misplaced. The provision of Art. 1358 on the necessity of a public documentis only for convenience, not for validity or enforceability. It is not a requirement for thevalidity of a contract of sale of a parcel of land that this be embodied in a public instrument.

A contract of sale is a consensual contract, which means that the sale is perfected by mereconsent. No particular form is required for its validity. Upon perfection of the contract, the

parties may reciprocally demand performance (Art. 1475, NCC), i.e., the vendee may compeltransfer of ownership of the object of the sale, and the vendor may require the vendee topay the thing sold (Art. 1458, NCC).

The trial court thus rightly and legally ordered Dalion to deliver to Sabesaje the parcel ofland and to execute corresponding formal deed of conveyance in a public document. Under

Art. 1498, NCC, when the sale is made through a public instrument, the execution thereof isequivalent to the delivery of the thing. Delivery may either be actual (real) or constructive.Thus delivery of a parcel of land may be done by placing the vendee in control andpossession of the land (real) or by embodying the sale in a public instrument (constructive).

As regards petitioners' contention that the proper action should have been one for specific

performance, We believe that the suit for recovery of ownership is proper. As earlier stated,Art. 1475 of the Civil Code gives the parties to a perfected contract of sale the right toreciprocally demand performance, and to observe a particular form, if warranted, (Art.1357). The trial court, aptly observed that Sabesaje's complaint sufficiently alleged a causeof action to compel Dalion to execute a formal deed of sale, and the suit for recovery ofownership, which is premised on the binding effect and validity inter partes of the contractof sale, merely seeks consummation of said contract.

... . A sale of a real property may be in a private instrument but that contract isvalid and binding between the parties upon its perfection. And a party maycompel the other party to execute a public instrument embodying theircontract affecting real rights once the contract appearing in a privateinstrument hag been perfected (See Art. 1357).

... . (p. 12, Decision, p. 272, Records)

ACCORDINGLY, the petition is DENIED and the decision of the Court of Appeals upholdingthe ruling of the trial court is hereby AFFIRMED. No costs.

SO ORDERED.

Obligation and Contracts - Forms

Documents

Transcript of Obligation and Contracts - Forms