UNIVERSITY OF CALOOCAN CITY
COLLEGE OF LAW
LAW ON SALES AND LEASE
Atty. Edward M. Menor, CPA
I. Introduction
A. Definition of Sale
Polytechnic University of the Philippines vs. CA, GR No. 143513, November 14, 2001
Romero vs. CA, GR No. 107207, November 23, 1995
1. Elements of Contract of Sale
Sanchez vs. Mapalad Realty Corp, GR No. 148516, December 27, 2007
Robern Development Corp. vs. People’s Landless Assoc., GR No. 173622, March 11, 2013
2. Stages of Contract of Sale
Jovan Land vs. CA, GR No. 125531. February 12, 1997
3. Obligations Created (Art. 1165) – 2 sets of real obligations
4. Characteristics of Sale
Romero vs. CA, GR No. 107207, November 23, 1995
Balatbat vs. CA, GR No. 109410, August 28, 1996
Gaite vs. Fonacier, GR No. L-11827, July 31, 1961
Aznar vs. Yapdiangco, GR No. L-18536, March 31, 1965
Agro Conglomerates, Inc. vs. CA, GR No. 117660, December 18, 2000
San Lorenzo Development Corporation vs. CA, GR No. 124242, January 21, 2005
B. Sale Distinguished from Other Contracts
1. Donation
Carlos vs. Ramil, GR No. 6736, September 5, 1911
2. Barter
3. Contract for a Piece-of-Work
Celestino & Co. vs. Collector, GR No. L-8506, August 31, 1956
Commissioner of Internal Revenue vs. Engineering Equipment & Supply Co., GR No. L-27044,
June 30, 1975
Engineering & Machinery Corp. vs. CA, GR No. 52267, January 24, 1996
4. Agency to Sell
Quiroga vs. Parsons, GR No. L-11491, August 23, 1918
5. Dacion En Pago
Philippine Lawin Bus Co. vs. CA, GR No. 130972, January 23, 2002
6. Lease
II. Parties to a Contract of Sale
A. Minors, Insane and Demented Persons, Deaf-Mutes
Labagala vs. Santiago, GR No. 132305, December 4, 2001
1. Necessaries
2. Emancipation
B. Sales by and Between Spouses
1. Contracts with Third Parties
Ravina vs. Villa Abrille, GR No. 160708, October 16, 2009
Aggabao vs. Parulan, Jr., GR No. 165803, September 1, 2010
2. Between Spouses
Medina vs Collector, GR No. L-15113, January 28, 1961
3. Applicability to Common-Law Spouses
Calimlim Canullas vs. Fortun, GR No. L-57499, June 22, 1984
4. Is In Pari Delicto Doctrine Applicable to Prohibit Recovery?
C. Scenarios involving Conflict of Interest due to Trust Relationships
1. Status of such Contracts
Rubias vs. Batiller, GR No. L-35702, May 29, 1973
2. Guardians, agents and administrators
Phil. Trust Co. vs. Roldan, GR No. L-8477, May 31, 1956
3. Attorneys
Fabillo vs. IAC, GR No. L-68838, March 11, 1991
Fornilda vs. RTC, GR No. L-72306, January 24, 1989
4. Judges
Macariola vs. Asuncion, AM No. 133-J, May 31, 1982
D. Sales by Administrators/Executors
Lee vs. RTC, GR No. 146006, February 23, 2004
III. Subject Matter of Sale
A. Must be Existing, Future or Contingent
1. The Thing Must be Capable of Existence
Emptio Rei Speratae
Sibal vs. Valdez, GR No. L-26278, August 4, 1927
Emptio Spei
Subject to Resolutory Condition
Quijada vs. CA, GR No. 126444, December 4, 1988
2. Seller’s Obligation to Transfer Ownership at the Time of Delivery
B. Must be Licit
C. Must be Determinate or Determinable
Melliza vs. City of Ilo-ilo, GR No. L-24732, April 30, 1968
Heirs of San Andres vs. Rodriguez, GR No. 135634, May 31, 2000
1. Generic Things as Objects of Sale
Yu Tek & Co. vs. Gonzales, GR No. L-9935, February 1, 1915
2. Undivided Interest
3. Undivided Share is a Mass of Fungible Goods may be Object of Sale
D. Whether Quantity of Object is Essential for Perfection
National Grains Authority vs. IAC, GR No. 74470, March 8, 1989
Johannes Schuback & Sons Phil. Trading Corp. vs. Court of Appeals, GR No. 105387, November
11, 1993
E. Legality of Subject Matter
1. Special Laws
2. Absolutely Simulated Sale
IV. Price
A. Meaning of Price
Torres vs. CA, GR No. 134559, December 9, 1999
B. Requisites for Valid Price
1. The Price Must be Real
Mapalo vs. Mapalo, GR No. L-21489 and L-21628, May 19, 1966
Bagnas vs. CA, GR No. L-38498, August 10, 1989
a. Simulated Price
Suntay vs. CA, GR No. 114950, December 19, 1995
b. False Consideration
c. Non-payment of Price
Macasaet vs. R. Transport Corp., GR No. 172446, October 10, 2007
2. The Price Must be in Money or Its Equivalent
Republic vs. Phil. Resources Development, GR No. L-10141, January 31, 1958
3. The Price Must be Certain or Ascertainable at the Time of Perfection
C. Manner of Payment of Price Must be Agreed Upon
Velasco vs. CA, GR No. L-31018, June 29, 1973
Sps. Luis Cruz and Aida Cruz vs. Sps. Alejandro Fernando, Sr. and Rita Fernando, GR No. 145470,
December 9, 2005
D. How Price Determined
1. By Third Person
2. By the Courts
3. By Reference to a Definite Day, Particular Exchange, or Market
4. By Reference to Another Thing Certain
5. But Never by One Party to the Contract
6. Effect of Unascertainability
E. Gross Inadequacy of Price
Spouses Buenaventura vs. CA, GR No. 126376, November 20, 2003
F. Judicial Sale
G. Rescissible Contracts of Sale
H. Sales with Right to Repurchase
V. Formation of a Contract of Sale
A. Preparatory
1. Policitacion
2. Option Contract
Cavite Development Bank vs. Lim, GR No. 131679, February 1, 2000
Nicolas Sanchez vs. Severina Rigos, GR No. L-25494 dated June 14, 1972
3. Distinguishing Option from Right of First Refusal
Tuazon vs. del Rosario-Suarez, GR No. 168325, December 2, 2010
Paranaque Kings Enterprises, Inc. vs. CA, GR No. 111538, February 26, 1997
B. Perfection
Fule vs. CA, GR No. 112212, March 2, 1998
1. Perfection: Acceptance must be absolute
Zayco vs. Serra, GR No. L-18335, January 10, 1923
2. When Deviation Allowed
Villonco vs. Bormachero, 65 SCRA 352
3. Sale by Auction
Leoquinco vs. Postal Savings Bank, GR No. L-23630, August 25, 1925
4. Earnest Money
Serrano vs. Caguiat, GR No. 139173, February 28, 2007
5. Place of Perfection
C. Form of Sales
1. Really No Form
Dalion vs. CA, GR No. 78903, February 28, 1990
Claudel vs. CA, GR No. 85240, July 12, 1991
2. Exceptions: When Form Important
Shoemaker vs. La Tondena, GR No. L-45667, May 9, 1939
Limketkai vs. CA, GR No. 118509, December 1, 1995
Ortega vs. Leonardo, GR No. L-11311, May 28, 1958
Claudel vs. CA, GR No. 85240, July 12, 1991
Alfredo vs. Boras, GR No. 144225, June 17, 2003
VI. Consummation and Performance of Contract
A. Obligation of the Seller
1. Preserve Subject Matter
2. Deliver with Fruits and Accessories
3. Types of Delivery
Cebu Winland Development Corp. vs. Ong Siao Hua, GR No. 173215, May 21, 2009
Norkis Distributors, Inc. vs. CA, GR No. 91029 dated February 7, 1991
Chua vs. CA, GR No. 119255, April 9, 2003
Ammigo vs. Teves, GR No. L-6389, November 29, 1954
Heirs of Pedro Escanlar vs. CA, GR No. 119777, October 23, 1997
Board of Liquidators vs. Floro, GR No. L-15155, December 29, 1960
Power Commercial and Industrial Corp. vs. CA, GR No. 119745, June 20, 1997
David vs. Misamis Occidental II Electric Cooperative, Inc., GR No. 194785, July 11, 2012
B. Completeness of Delivery
1. In case of Immovables
Sta. Ana vs. Hernandez, GR No. L-16394, December 17, 1966
Cebu Winland Development Corp. vs. Ong Siao Hua, GR No. 173215, May 21, 2009
2. In case of Movables
Lagon vs. Hooven Comalco Industries, Inc., GR No. 135657, January 17, 2001
Gaite vs Fonacier, GR No. L-11827, July 31, 1961
Engel vs. Mariano Velasco & Co., GR Nos. 21651-25153, December 29, 1924
Pacific Commercial Co. vs. Ermita Market & Cold Storage, Inc., GR No. L-34727, March 9,
1932
3. Effects of Delivery
Froilan vs. Pan Oriental Shipping Co., GR No. L-11897, October 31, 1964
C. Time and Place of Delivery
Behn Meyer & Co. vs. Yancgo, GR No. 13203, September 18, 1918
D. Expenses of Execution and Registration
E. Double Sales
1. Main Rule: Prior Tempore, Prior Jure
Carbonell vs. CA, GR No. L-29972, January 26, 1976
2. Requisites of Double Sale
Consolidated Rural Bank (Cagayan Valley), Inc. vs. CA, GR No. 132161, January 17, 2005
San Lorenzo Dev. Corp. vs. CA, GR No. 124242, January 21, 2005
3. Registration as First Priority
Tanedo vs. CA, GR No. 104482, January 22, 1996
4. No Registration
De Leon vs. Ong, GR No. 170405, February 2, 2010
5. Who is Purchaser in Good Faith?
Agricultural and Home Extension Dev, vs. CA, GR No. 92310, September 3, 1992
6. Possession in Double Sale Refers to Material and Symbolic
Navera vs. CA, GR No. L-56838, April 26, 1990
7. When Unregistered Land
Naawan Community Rual Bank, Inc. vs. CA, GR No. 128573, January 13, 2003
Carumba vs. CA, GR No. L-27587, February 18, 1970
F. Obligation of the Buyer
VII. Documents of Title
A. Nature
B. Types
C. Effects of Unauthorized or Lack of Negotiation
D. Warranties on Negotiation
E. Rules on Levy/Garnishment of Goods
[Link] by Non-owner or by One having Voidable Title
A. Effect of Sale where Seller Not Owner at the Time of Delivery
Paulmitan vs. CA, GR No. 61584, November 25, 1992
1. Sale of Co-owners
Estoque vs. Pajimula, GR No. L-24419, July 15, 1968
Vda. De Figuracion vs. Giguracion-Gerilla, GR No. 151334, February 13, 2013
B. Exceptions: A Non-Owner is Able to Transfer Ownership
1. Estoppel on True Owner
Bucton vs. Gabar, GR No. L-36359, January 31, 1974
2. Recording Laws: Torrens System
3. Sale in Merchants Stores, Fairs or Markets
City of Manila vs. Bugsuk, GR No. L-8255, July 11, 1957
a. Anti-Fencing Law (PD 1612)
C. Sale by One Having Voidable Title
EDCA Publishing vs. Santos, GR No. 80298, April 26, 1990
Tagatac vs. Jimenez, OG 3792 (1957)
IX. Loss, Deterioration, Fruits and Other Benefits
A. No Application When Subject Matter is Determinable
B. Effect of Loss/Deterioration of Things Sold
1. Before Perfection
Roman vs. Grimalt, GR No. L-2412, April 11, 1906
2. At the Time of Perfection
3. After Perfection But Before Delivery
Gaisano Cagayan, Inc. vs. Insurance Company of North America, GR No 147839, June 8, 2006
Lawyers Cooperative Publishing Company vs. Tabora, GR No. L-21263, April 30, 1965
4. After Delivery
Song Fo & Co. vs. Ona, GR No. L-10056, December 24, 1915
Lawyer’s Coop vs. Tabora, GR No. L-21263, April 30, 1965
X. Remedies for Breach of Contract of Sale
A. Seller’s Remedies in Sale of Movables and Goods
1. Ordinary Remedies
2. Movables, In General
3. Goods
4. Special Remedies of Unpaid Seller
5. Remedies in Sale of Movables in Installments
Levy vs. Gervasio, GR No. 46306, October 27, 1939
Tajanglangit vs. Southern Motors, GR No. L-10789, May 28, 1957
Delta Motor Sales Corp. vs. Niu Kim Duan, GR No. 61043, September 2, 1992
Ridad vs. Filipinas Investment, GR No. L-39806, January 27, 1983
Zayas vs. Luneta Motors, GR No. L-30583, October 23, 1982
Sps. Rosario vs. PCI Leasing and Finance, Inc., GR No. 139233 dated November 11, 2005
B. Buyer’s Remedies in Sale of Movables and Goods
C. Seller’s Remedies in Sale of Real Property
1. Ordinary Remedies
2. Remedy in a Contract of Sale Due to a Special Ground
3. Maceda Law: Sales of Residential Realty on Installments (RA 6552) and PD 957
Active Realty & Dev. Corp. vs. Daraya, GR No. 141205, May 9, 2002
Fabrigas vs. San Francisco del Monte, GR No. 152346, November 25, 2005
Casa Filipina Realty Corp. vs. Office of the President, GR No. 99346, February 7, 1995
Moldex Realty, Inc. vs. Saberon, GR No.176289, April 8, 2013
Bernardo vs. Tan, GR No. 185491, July 11, 2012
D. Buyer’s Remedies in Sale of Immovables
XI. Remedy of Rescission in Sales Contracts covering Immovables
A. Nature of Remedy of Rescission (Resolution)
1. Distinguishing from Other Remedy of Rescission
Universal Food Corp. vs. CA, GR No. L-29155, May 13, 1970
B. Distinctions Between Contract of Sale and Contract to Sell
1. Contract of Sale versus Contract to Sell
Sps. Valenzuela vs. Kalayaan Development Corporation, GR No. 163244, June 22, 2009
Montecalvo vs. Heirs of Eugenia Primero, GR No. 165168, July 9, 2010
Sps. Vicente and Lourdes Pingol vs. CA, GR No. 102909, September 6, 1993
Raceles vs. Spouses Javier, GR No. 189609, January 29, 2018
2. Minimum Requirements of Rescission
University of the Philippines vs. de los Angeles, GR No. L-28602, September 29, 1970
XII. Conditions and Warranties
A. Conditions
B. Warranties
Pilipinas Makro, Inc. vs. Coco Charcoal Philippines, Inc., GR No. 196419, October 4, 2017
Philippine Steel Coating Corp. vs. Quinones, GR No. 194533, April 9, 2017
Goodyear Philippines, Inc. vs. Sy, GR No. 154554, November 9, 2005
XIII. Extinguishment of Sale
A. Conventional Redemption
1. Definition
Villarica vs. CA, GR No. L-19196, November 29, 1968
De Bayquen vs. Balaoro, GR No. L-28161, August 13, 1986
2. Equitable Mortgage
Santos vs. CA, GR No. 83664, November 13, 1989
Myrna Ramos vs. Susana Sarao & Jonas Ramos, GR No. 149756, February 11, 2005
3. Situation Prior to Redemption
Reyes vs. Hamada, GR No. L-19967, May 31, 1965
4. Who can Redeem
5. How Redemption Effected
Vda. De Zuleta vs. Octaviano, GR No. L-55350, March 28, 1983
6. Fruits
Almeda vs. Daluro, GR No. L-28070, October 5, 1977
B. Legal Redemption
1. Definition
2. When Period of Legal Redemption Begins
Francisco vs. Boiser, GR No. 137677, May 31, 2000
Calma vs. Santos, GR No. 161027, June 22, 2009
3. Instances of Legal Redemption
De Guzman vs. CA, GR No. L-47378, February 27, 1987
Verdad vs. CA, GR No. 109972, April 29, 1996
[Link]
A. Definition and Nature of Assignment
Licaros vs. Gatmaitan, GR No. 142838, August 9, 2001
Lo vs. KJS Eco-Formwork System Phil., Inc., GR No. 149420, October 8, 2003
B. Perfection by Mere Consent
C. Warranties of Assignor
Nyco Sales Corp. vs. BA Finance, GR No. 71694, August 16, 1991
