1
Dignos vs. Court of Appeals, and Jabil
February 1988
COURT RULING:
FACTS:
The contract between the parties is a contract
In July 1965, herein petitioners Silvestre T. of sale. It has been held that a deed of sale is
Dignos and Isabela Lumungsod de Dignos absolute in nature although dominated as a
(spouses Dignos) sold their parcel of land in “Deed of Conditional Sale” where nowhere in
Opon, Lapu–Lapu to herein private respondent the contract in question is a proviso or
Antonio Jabil for the sum of P28, 000 payable stipulation to the effect that title to the
for two installments, with an assumption of property sold is reserved in the vendor until full
indebtedness with the First Insular Bank of payment of the purchase price, nor is there a
Cebu in the sum of P12, 000 and the next stipulation giving the vendor the right to
installment of P4, 000 to be paid in September unilaterally rescind the contract the moment
1965. In November 1965, the spouses Dignos the vendee fails to pay within a fixed period.
sold the same parcel of land for P35, 000 to
All the elements of a valid contract of sale are
defendants Luciano Cabigas and Jovita L. de
present in the document and that the spouses
Cabigas (spouses Cabigas) who were then US
Dignos had no right to sell the land in question
citizens, and executed in their favor an
because an actual delivery of its possession
Absolute Deed of Sale duly registered in the
has already been made in favor of Jabil as
Office of the Register of Deeds.
early as March 1965.
Upon discovery of the 2nd sale of the subject It was also found that the spouses Dignos
land, Jabil filed the case at bar in the CFI of never notified Jabil by notarial act that they
Cebu which rendered its Decision in August were rescinding the contract, and neither did
1975 declaring the 2nd sale to the spouses they file a suit in court to rescind the sale.
Cabigas null and void ab initio and the 1st sale There is no showing that Jabil properly
to Jabil not rescinded. The CFI of Cebu also authorized a certain Cipriano Amistad to tell
ordered Jabil to pay the remaining P16,000 to petitioners that he was already waiving his
the spouses Dignos and to reimburse the rights to the land in question.
spouses Cabigas a reasonable amount
corresponding the expenses in the construction
of hollow block fences in the said parcel of
land. The spouses Dignos were also ordered to
return the P35, 000 to the spouses Cabigas.
Both Jabil and the spouses Dignos appealed to
the Court of Appeals, which affirmed in July
1981 the CFI of Cebu’s Decision except for the
part of Jabil paying the expenses of the
spouses Cabigas for building a fence. The
spouses Dignos contested that the contract
between them and Jabil was merely a contract
to sell and not a deed of sale.
ISSUE:
Is the contract between the parties a contract
of sale or a contract to sell?
2
Delfin Tan v. Erlinda Benolirao, et. al. petitioner’s complaint is an in personam action
since it asks the court to compel the
G.R. №. 153820 , October 16, 2009
respondent to do something — either to rescind
Facts: or reform the contract — and enforces his
personal rights against the respondent, not
A 689 sq.m. parcel of land in Tagaytay City against the property subject of the deed.
with TCT №. 26432, co-owned by respondent
spouses Lamberto and Erlinda Benolirao and The contract between the parties was merely
spouses Reynaldo and Norma Taningco, was a contract to sell where the vendor retained
the subject of a Deed of Conditional Sale in title and ownership to the property until
favor of petitioner Delfin Tan for P 1,378,000. petitioner has fully paid the purchase price.
Pursuant to the deed, petitioner paid the P Since he had no claim of ownership or title yet,
200,000 downpayment. he had no right to ask for the annotation of a
lis pendens notice on the title of the property.
Then, Lamberto Benolirao died and an
extrajudicial settlement of his estate was Jurisprudence has established that where the
executed which caused the issuance of a new seller promises to execute a deed of absolute
certificate of title over the property (TCT №. sale upon the completion by the buyer of the
27355) with a corresponding annotation in payment of the price, contract is only
accordance with Section 4, Rule 74 of the a contract to sell.
Rules of Court. Despite a second extension,
An annotation is placed on new certificates of
petitioner failed to comply with his obligation to
title issued pursuant to the distribution and
pay the remaining balance due. In response to
partition of a decedent’s real properties to
the demand letter subsequently sent by the
warn third persons on the possible interests of
vendors, petitioner demanded the return of his
excluded heirs or unpaid creditors in these
downpayment, contending that the annotation
properties. The annotation, therefore,
on the title was an encumberance on the
creates a legal encumbrance or lien on
property that would prevent the vendors from
the real property in favor of the excluded
delivering a clear title to him.
heirs or creditors. Where a buyer
When the vendors refused, petitioner filed a purchases the real property despite the
complaint for specific performance and caused annotation, he must be ready for the
the annotation of a notice of lis pendens on the possibility that the title could be subject
title. Respondents filed a motion for to the rights of excluded parties.
cancellation of the notice of lis pendens and
The remedy of rescission under Art. 1191
was granted. The lower court, after due
cannot apply to mere contracts to sell. In a
proceedings, ruled that the forfeiture was
contract to sell, the vendor remains the owner
proper while the Court of Appeals affirmed in
for as long as the vendee has not complied
toto hence, the present petition.
fully with the condition of paying the purchase
Issue: price. If the vendor should eject vendee for
failure to meet the condition precedent, he is
WON an annotation made pursuant to Section enforcing the contract and not rescinding it.
3, Rule 74 of the ROC on a COT conveying real (Termination is the proper remedy.)
property considered an encumberance on the
property? Unless time is of the essence to the contract,
slight delay is not a ground for rescission.
Held: Court ruled in the affirmative. The
litigation subject of a notice of lis pendens
must directly involve a specific property which
is necessarily affected by the judgment. While
the deed does have real property for its object,
3
ARTATES vs. URBI Section 118 of the Public Land law
(Commonwealth Act 141) provides as follows:
FACTS:
A homestead patent was issued to plaintiffs
Lino Artates and Manuela Pojas on September SEC. 118.
23, 1952. A public sale of the said homestead
Except in favor of the Government or any of its
was conducted by the Provincial Sheriff of
branches, units, or institution, or legally
Cagayan on 2 June 1962. It was made to
constituted banking corporations, lands
satisfy a judgment against Lino Artates in the
acquired under free patent or homestead
amount of P1,476.35, and awarded to Daniel
provisions shall not be subject to encumbrance
Urbi by the Justice of the Peace Court of
or alienation from the date of the approval of
Camilaniugan, Cagayan.
the application and for a term of five years
Defendant Urbi previously filed a civil case of from and after the date of issuance of the
physical injuries against plaintiff Artates, dated patent or grant, nor shall they become liable to
October 21, 1955. In the execution sale, the the satisfaction of any debt contracted prior to
property was sold to the judgment creditor, the the expiration of said period, but the
only bidder, for P1,476.35. improvements or crops on the land may be
mortgaged or pledged to qualified persons,
In their complaint, the plaintiffs alleged that
associations or corporations.
the sale of the homestead is a violation of the
provision of the Public Land law exempting said
property from execution for any debt
contracted within five years from the date of
the issuance of thepatent; that defendant Urbi,
with the intention of defrauding the plaintiffs,
executed on 26 June 1961 a deed for the sale
of thesame parcel of land to defendant
Crisanto Soliven, a minor, supposedly for the
sum of P2,676.35; that as a result of the
aforementioned transactions, defendants Urbi
and Soliven entered into the possession of the
land and deprived plaintiffs of the owners'
share in the rice crops harvested during the
agricultural year 1961-1962.
ISSUE:
Whether the decision of the Court of First
Instance of Cagayan involving the public sale
of a homestead to satisfya civil judgment
against the grantee is vaild
HELD:
The execution sale conducted was considered
NULL and VOID. The judgment rendered was
in violation of Section 118of the Public Land
law (Commonwealth Act 141).
4
Heirs of Enrique Zambales vs. Court of Appeals substantiated by evidence.
FACTS:
ISSUE:
The spouses Enrique Zambales and Joaquina Are the compromise agreement and the
Zambales (the Zambaleses), who are illiterate, subsequent deed of sale valid and legal?
were the homestead patentees of a parcel of
land in the Municipality of Del Pilar, Roxas, COURT RULING:
Palawan, pursuant to Homestead Patent No. V-
59502 dated September 6, 1955. The Supreme Court sustained the finding of
the appellate court that fraud and
They claimed in November 1956 that misrepresentation did not vitiate petitioners'
respondent Nin Bay Mining Corporation consent to the Agreement because the latter
(Corporation) had removed silica sand from were not as ignorant as they themselves tried
their land and destroyed the plants and other to show.
improvements thereon, to which said
Corporation denied to have done so. The Zambaleses were political leaders who
speak in the platform during political rallies,
On October 29, 1959, the Zambaleses, duly and the lawyers they have hired belong to
assisted by their counsel, Atty. Perfecto de los well-established law firms in Manila, which
Reyes, and the Corporation, entered into a show that although they were illiterate, they
Compromise Agreement which state, among are still well-informed.
others, that the Zambaleses are giving the
Corporation full power and authority to sell,
transfer and convey on September 10, 1960 or However, while the Compromise Agreement
at any time thereafter the whole or any part of was held to be in violation of the Public Land
herein subject property. Act, which prohibits alienation and
encumbrance of a homestead lot within five
On September 10, 1960, the Corporation sold years from the issuance of the patent.
the disputed property to Joaquin B. Preysler for
Although the issue was not raised in the Courts
the sum of P8,923.70 fixed in the Compromise
below, the Supreme Court has the authority to
Agreement.
review matters even if they are not assigned as
On December 6, 1969, or ten (10) years after errors in the appeal, if it is found that their
the Trial Court's Decision based on the consideration is necessary in arriving at a just
Compromise Agreement, and nine (9) years decision of the case.
after the sale to Preysler, the Zambaleses filed
The bilateral promise to sell between the
a civil action in the CFI of Palawan for
Zambaleses and the Corporation, and the
"Annulment of a Deed of Sale with Recovery of
subsequent deed of sale between Preysler and
Possession and Ownership with Damages”,
the latter were declared null and void.
alleging that Atty. de los Reyes and the
Corporation induced them through fraud,
deceit and manipulation to sign the
Compromise Agreement.
The trial court declared null and void the deed
of sale executed between Preysler and the
Corporation, but the Court of Appeals reversed
the said decision after finding that the alleged
fraud or misrepresentation in the execution of
the Compromise Agreement had not been
5
Quiroga v. Parsons These features exclude the legal conception of
an agency or order to sell whereby the
FACTS:
mandatory or agent received the thing to sell
A contract was entered into between Andres it, and does not pay its price, but delivers to
Quiroga and J. Parsons, who were both the principal the price he obtains from the sale
merchants, which granted the exclusive right of the thing to a third person, and if he does
to sell his beds in the Visayan Islands to not succeed in selling it, he returns it.
Parsons under the following conditions:
By virtue of the contract between the plaintiff
1) There be a discount of 2.5% as commission and the defendant, the latter, on receiving the
for the sale; beds, was necessarily obliged to pay their price
within the term fixed, without any other
2) Parsons shall order the beds by the dozen, consideration and regardless as to whether he
whether of the same or of different styles; had or had not sold the beds.
3) Expenses for transportation and shipment There was mutual tolerance in the performance
shall be borne by Quiroga; of the contract in disregard of its terms; and it
gives no right to have the contract considered,
4) Parsons is bound to pay Quiroga for the
not as the parties stipulated it, but as they
beds received within 60 days from the date of
performed it.
their shipment;
Only the acts of the contracting parties,
5) If Quiroga should request payment before
subsequent to, and in connection with, the
the invoice falls due, it shall be considered as
execution of the contract, must be considered
prompt payment with 2% deduction;
for the purpose of interpreting the contract,
6) 15-day notice must at least be given by when such interpretation is necessary.
Quiroga before any alteration in price of beds;
and
7) Parsons binds himself to only sell Quiroga
beds. Quiroga alleged that Parsons breached
its contract by selling the beds at a higher
price, not having an open establishment in
Iloilo, not maintaining a public exhibition, and
for not ordering the beds by the dozen.
Only the last imputation was provided for by
the contract, the others were not stipulated.
Quiroga argued that since there was a contract
of agency between them, such obligations
were necessarily implied.
ISSUE:
Is the contract between them one of agency,
not of sale?
HELD:
No. The agreement between Quiroga and
Parsons was that of a simple purchase and sale
— not an agency. Quiroga supplied the beds,
while Parsons had the obligation to pay their
purchase price.
6
Concrete Aggregates vs. CTA and CIR COURT RULING:
The Supreme Court affirmed respondent CTA’s
FACTS:
decision and declared that petitioner is a
manufacturer as defined by Section 194(x),
Petitioner, a domestic corporation duly existing
now Section 187(x), of the Tax Code.
under the laws of the Philippines, has an
aggregate plant at Montalban, Rizal which It reiterated the respondent CTA’s finding that
processes rock aggregates mined by it from petitioner was formed and organized primarily
private lands, and maintains and operates a as a manufacturer; that it has an aggregate
plant at Longos, Quezon City for the production plant at Montalban, Rizal, which processes rock
of ready-mixed concrete and plant-mixed hot aggregates mined by it from private lands; it
asphalt. operates a concrete batching plant at Longos,
Quezon City where the specified aggregates
Sometime in 1968, the agents of respondent
from its plant at Montalban are mixed with
Commission on Internal Revenue (CIR)
sand and cement, after which water is added
conducted an investigation of petitioner's tax
and the concrete mixture is sold and delivered
liabilities, and assessed and demanded
to customers; and at its plant site at Longos,
payment from petitioner the amount of
Quezon City, petitioner has also an asphalt
P244,002.76 as sales and ad valorem taxes for
mixing machinery where bituminous asphalt
the first semester of 1968, inclusive of
mix is manufactured.
surcharges.
Instead of paying, the petitioner appealed to
respondent CTA. The said Court concluded that
petitioner is a manufacturer subject to the 7%
sales tax under the Section Section 186 of the
1968 National Internal Revenue Code, and
ordered it to pay what the respondent CIR
demands, plus interest at the rate of 14% per
centum from January 1, 1973 up to the date of
full payment thereof pursuant to Section 183
(now 193) of the same Code.
Petitioner contends, however, that it is a
contractor within the meaning of Section 191
under the same Code, that its business falls
under "other construction work contractors" or
"other independent contractors", and that it
produced asphalt and concrete mix only upon
previous orders.
ISSUE:
Is the petitioner a contractor subject to the 3%
contractor's tax under Section 191 or a
manufacturer subject to the 7% sales tax
under Section 186?
