the final exam

FINAL EXAMINATION IN SALES

Saturday, 8 am

Essay type.Rule on the issues posed by the given facts of the case.

1. Hugo Mararac sold the land in question to Leonardo Mararac and Monica Resuello on March 27, 1971. At that time, the lot now owned by plaintiffs was owned by plaintiff Angel Mararac and Juanito Mararac, who was the husband of plaintiff Carlina Rafanan who died in 1976. Leonardo Mararac and Monica Resuello sold to the defendants the land in question on February 25, 1975. At that time, the lot in eastern side of the land in question was owned by Angel Mararac and his brother, Juanito Mararac. On April 8, 1975, defendants declared the land for tax purposes.At the time of sale of the land in question to the defendants in 1975 there was no offer to exercise right of legal redemption. At the time of the sale of the land in question to Leonardo Mararac and Monica Resuello in 1971, there was no offer of legal redemption. There was no legal redemption offered during the period between the first and second sale. The southern boundary of the lot in question is a barrio road with approximate area of 10 meters wide. The land in question in relation to plaintiffs' lot is not separated by ravine, by brook, trail, road or other servitude for the bene­fit of others. The land in question is fenced and was fenced even before the first sale in March 27, 1971. Defendants own rural lands other than the land in question.From Barangay Balogo, to Basing along the road touching the southern boundary of the land in question are lines of houses on both sides.House of plaintiffs is along the said road. A portion of the land in question on the side farther from the road, is used as a fishwell. Plaintiffs offered to redeem the land in the amount paid by the defendants as well as an amount for the return of investment of the property and interest, and payments of attorney's fees and are able and willing to make the payment.

ISSUE:

Whether or not the land in question maybe considered rural for purposes of legal redemption.

2. Petitioner contracted the services of the respondent, to sew for the petitioner of 20,762 pieces of assorted girls denims to the amount of P76,410.00.

At first, the respondent was told that the sewing of some of the pants was defective. She offered to take delivery of the defective pants. However, she was later told by [petitioner]'s representative that the goods were already good. She was told to just return for her check of P76,410.00. However, the petitioner failed to pay her the aforesaid amount. This prompted her to hire the services of counsel who, on November 12, 1979, wrote a letter to the petitioner demanding payment of the aforesaid amount within ten days from receipt thereof. On February 7, 1990, the petitioner's vice-president-comptroller, wrote a letter to respondent's counsel, averring, inter alia, that the pairs of jeans sewn by her, numbering 6,164 pairs, were defective and that she was liable to the petitioner for the amount of P49,925.51 which was the value of the damaged pairs of denim pants and demanded refund of the aforesaid amount.

ISSUE:

Whether or not it is proper to impose interest at the rate of twelve percent (12%) per annum for an obligation that does not involve a loan or forbearance of money in the absence of stipulation of the parties.

3. Jerry Moles(petitioner) bought from Mariano Diolosa owner of Diolosa Publishing House a linotype printing machine(secondhand machine). Moles promised Diolosa that will pay the full amount after the loan from DBP worth P50,000.00 will be released. Private respondent on return issued a certification wherein he warrated that the machine was in A-1 condition, together with other express warranties. After the release of the of the money from DBP, Petitioner required the Respondent to accomplish some of the requirements. On which the dependant complied the requirements on the same day.

On November 29, 1977, petitioner wrote private respondent that the machine was not functioning properly. The petitioner found out that the said machine was not in good condition as experts advised and it was worth lesser than the purchase price. After several telephone calls regarding the defects in the machine, private respondent sent two technicians to make necessary repairs but they failed to put the machine in running condition and since then the petitioner wan unable to use the machine anymore.

ISSUE/S:

1.     Whether there is an implied warranty of its quality or fitness.

2.    Whether the hidden defects in the machine is sufficient to warrant a rescission of the contract between the parties.

4. Eugenia leased the lot  (LOT NO. 263, located in Iligan City, which has an area of 860 sq.m registered in the name of Eugenia Primero married to Alfredo Primero Sr. )to petitioner Irene Montecalvo for a monthly rental of P500.00.  Eugenia entered into an un-notarized Agreement with Irene, where the former offered to sell the property to the latter for P1,000.00 per square meter.  They agreed that Irene would deposit the amount of P40,000.00 which shall form part of the down payment equivalent to 50% of the purchase price.  They also stipulated that during the term of negotiation of 30 to 45 days from receipt of said deposit, Irene would pay the balance of P410,000.00 on the down payment.  In case Irene defaulted in the payment of the down payment, the deposit would be returned within 10 days from the lapse of said negotiation period and the Agreement deemed terminated. However, if the negotiations pushed through, the balance of the full value of P860,000.00 or the net amount of P410,000.00 would be paid in 10 equal monthly installments from receipt of the down payment, with interest at the prevailing rate.

Irene failed to pay the full down payment and she continued to stay on the disputed property, and still made several payments with an aggregate amount of P293,000.00.  Eugenia did not return the P40,000.00 deposit to Irene, and refused to accept further payments.Thereafter, Irene caused a survey of Lot No. 263 and the segregation of a portion equivalent to 293 square meters in her favor. However, Eugenia opposed her claim and asked her to vacate the property.

On June 18, 1996, Irene and Nonilon retaliated by instituting CM Case No. 11-3588 with the RTC of Lanao del Norte for specific performance, to compel Eugenia to convey the 293-square meter portion of Lot No. 263.

ISSUE:

1. WHETHER AN ORAL CONTRACT OF SALE OF A PORTION OF [A] LOT IS BINDING [UPON] THE SELLER.
2. WHETHER A SELLER IN AN ORAL CONTRACT OF SALE OF A PORTION OF [A] LOT CAN BE COMPELLED TO EXECUTE THE REQUIRED  DEED OF  SALE AFTER THE AGREED CONSIDERATION WAS PAID AND POSSESSION THEREOF DELIVERED TO AND ENJOYED BY THE BUYER.

5. Philippine Acetylene Co. purchased from Alexander Lim a motor vehicle described as Chevorlet 1969 model for P55K to be paid in instalments. As security for the payment of said promissory note, the appellant executed a chattel mortgage over the same motor vehicle in favor of said Alexander Lim. Then, Lim assigned to the Filinvest all his rights, title, and interests in the promissory note and chattel mortgage by virtue of a Deed of Assignment.Phil Acetylene defaulted in the payment of nine successive installments. Filinvest sent a demand letter. Replying thereto, Phil Acetylene wrote back of its desire to return the mortgaged property, which return shall be in full satisfaction of its indebtedness. So the vehicle was returned to the Filinvest together with the document “Voluntary Surrender with Special Power of Attorney To Sell.” Filinvest failed to sell the motor vehicle as there were unpaid taxes on the said vehicle. Filinvest requested the appellant to update its account by paying the installments in arrears and accruing interest. Filinvest offered to deliver back the motor vehicle to the appellant but the latter refused to accept it, so appellee instituted an action for collection of a sum of money with damages.Phil Acetylene’s defense: The delivery of the motor vehicle to Filinvest extinguished its money obligation as it amounted to a dation in payment. Assuming arguendo that the return did not extinguish, it was justified in refusing payment since the appellee is not entitled to recover the same due to the breach of warranty committed by the original vendor-assignor Alexander Lim.The issue if there was dation in payment that extinguished Phil Acetylene’s obligation?

6. A certain Jose de los Santos owned a 98,254 square-meter parcel of land designated as Lot No. 785, PLs-32 located at Balo-Andang, San Ramon, San Pascual (now Claveria), Masbate; the property is specifically described in Original Certificate of Title (OCT) No. P-671 issued on 31 May 1956. On 31 October 1961, Jose sold, in a private document, a 2 1/4 hectare portion thereof to the private respondents. On 26 November 1963, however, he executed another deed of sale which he acknowledged before a notary public. Private respondents took possession of the portion sold to them immediately after the 1961 sale and declared the same for taxation purposes in the name of private respondent Ciriaco Flores; private respondents likewise paid the taxes thereon.

On 3 January 1963, Jose de los Santos sold one-half of Lot No. 785 to petitioner Lorenzo Berico. Thereafter, or on 30 March 1963, Jose's minor children sold to the same petitioner the remaining half. Jose de los Santos represented his children in this transaction.

Petitioner Berico was aware of the 1961 sale of a portion of the lot to the private respondents and of the latter's possession thereof.

Despite such knowledge and recognition of the sale in favor of and the possession of the property by the private respondents, petitioner Berico registered on 5 June 1968 the two deeds of sale in his favor and caused the cancellation of OCT No. P-671; the latter also secured the issuance in his name of Transfer Certificate of Title (TCT) No. T-1346. He paid the appropriate taxes thereon only from 1973 to 1986. It appears, however, that he declared the property for taxation purposes in his wife's name in 1968.

On the other hand, it was only on 8 November 1978 that the private respondents registered the deed of sale in their favor after discovering the cancellation of OCT No. P-671 and issuance in favor of petitioner Berico of TCT No. T-1346.

On 14 December 1978, private respondents filed against the petitioners a complaint for "Annulment of Title" with the then Court of First Instance (now Regional Trial Court) of Masbate.

Issue:

In the double sale of an immovable property under Article 1544 of the Civil Code, does prescription bar an action by the first vendees, who are in possession of the said property, against the second vendee for the annulment of a transfer certificate of title over the property procured by the latter who has knowledge of the first sale and who recognizes the first vendees' possession?

7. Hanopol claims ownership over the land by virtue of a series of purchases by means of private documents from the Siapos. Pilapil asserts his right on the strength of a duly notarized deed executed by the owners executed in his favour and registered under Act. No. 3344.

Issue:

WHETHER the registration of the second sale in favor of Pilapil affects Hanopol’s rights as the first vendee.

8. Atkins Kroll & Co. sent a letter to B. Cu HianTek on September 13, 1951, offering  cartons of Luneta brand Sardines subject to reply by September 23, 1951. HianTek unconditionally accepted the said offer through a letter delivered on September 21, 1951, but Atkins failed to deliver the commodities due to the shortage of catch of sardines by the packers in California.

HianTek, therefore, filed an action for damages in the CFI of Manila which granted the same in his favor.

Atkins herein contends that there was no such contract of sale but only an option to buy, which was not enforceable for lack of consideration because it is provided under the 2nd paragraph of Article 1479 of the New Civil Code that "an accepted unilatateral promise to buy or to sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price.” Atkins also insisted that the offer was a mere offer of option, because the "firm offer" was a continuing offer to sell until September 23.

ISSUE:Whether  a contract of sale was constituted between the parties or only a unilateral promise to buy.

9. Nicolas Sanchez and SeverinaRigos executed an instrument entitled "Option to Purchase," whereby Mrs. Rigos agreed, promised and committed  to sell to Sanchez a parcel of land within two (2) years from said date with the understanding that said option shall be deemed terminated and elapsed if Sanchez shall fail to exercise his right to buy the property within the stipulated period. Inasmuch as several tenders of payment made by Sanchez within said period, were rejected by Mrs. Rigos, on March 12, 1963, the former deposited said amount with the Court of First Instance of Nueva Ecija and commenced against the latter the present action, for specific performance and damages.

Rigos contended that the contract between them was only  aunilateral promise to sell, and the same being unsupported by any valuable consideration, by force of the New Civil Code, is null and void.

Sanchez alleged in his compliant that, by virtue of the option under consideration, "defendant agreed and committed to sell" and "the plaintiff agreed and committed to buy" the land described in the option.

The lower court rendered judgment in favor of Sanchez and ordered Rigos to accept the sum Sanchez judicially consigned, and to execute in his favor the requisite deed of conveyance.

ISSUE:Whether there was a contract to buy and sell between the parties or only a unilateral promise to sell.

10. In the second week of December 1988, Filemon Flores, respondent, purchased from Supercars Management and Development Corporation, petitioner, an Isuzu Carter Crew Cab.  Upon delivery of the vehicle on December 27, 1988, respondent paid petitioner the 30% down payment, plus premium for the vehicle’s comprehensive insurance policy amounting to P7,374.80. The RCBC financed the balance of the purchase price. Its payment was secured by a chattel mortgage of the same vehicle.
A day after the vehicle was delivered, respondent used it for his family’s trip to Bauang, La Union. While traversing the national highway in Tarlac, Tarlac, the fan belt of the vehicle snapped. Then its brakes hardened after several stops and did not function properly; the heater plug did not also function; the engine could not start; and the fuel consumption increased. Upon their return to Manila in the first week of January 1989, respondent complained to petitioner about the defects of the vehicle. Marquez then had the vehicle repaired and returned it to respondent that same day, assuring the latter that it was already in good condition.  But after driving the vehicle for a few days, the same defects resurfaced, prompting respondent to send petitioner a letter dated January 30, 1989 rescinding the contract of sale and returning the vehicle due to breach of warranty against hidden defects. A copy of the letter was furnished to RCBC.
On March 1, 1989, respondent sent petitioner a letter demanding the refund of his down payment, plus the premium he paid for the vehicle’s insurance.Petitioner failed to comply with petitioner’s demand. Consequently, respondent stopped paying the monthly amortization for the vehicle.On March 21, 1989, RCBC sent respondent a letter demanding that he settle his past overdue accounts for February 15 and March 15, 1989. In reply, respondent, through a letter dated March 31, 1989, informed RCBC that he had rescinded the contract of sale and had returned the vehicle to petitioner. This prompted RCBC to file with the Office of the Clerk of Court and Ex-Officio Sheriff, Regional Trial Court, Quezon City, a Petition for Extra-judicial Foreclosure of Chattel Mortgage.

Issue:Whether Marquez and Catley committed any breach of warranty against hidden defects, claiming that the vehicle had only “minor and inconsequential defects” which “were promptly and satisfactorily repaired by petitioner Supercars pursuant to its warranty as the seller.” For in the part of RCBC, is it's claim that it has no liability whatsoever against respondent correct because it merely enforced its right under the chattel mortgage law.

END OF THE EXAMINATION

sweet manogura

BAUTISTA V. UNANGST (2008)

THIRD DIVISION

[ G.R. No. 173002, July 04, 2008 ]

BENJAMIN BAUTISTA, PETITIONER, VS. SHIRLEY G. UNANGST AND OTHER UNKNOWN PERSONS, RESPONDENTS.

D E C I S I O N

FACTS:

In 1996, Hamilton Salak rented a car from Benjamin BAUTISTA who failed to return the car after three (3) days prompting the latter to file a complaint against him demanding the sum of P232,372.00 as payment for car rental fees, fees incurred in locating the car, attorney's fees and other incidental expenses. Salak and his common-law wife, Shirley UNANGST, expressed willingness to pay but since they were then short on cash, they sold to BAUTISTA a house and lot with right to repurchase, specifying, among others, that: (1) UNANGST, as vendor, shall pay capital gains tax, current real estate taxes and utility bills pertaining to the property; (2) if UNANGST fails to repurchase the property within 30 days from the date of the deed, she and her assigns shall immediately vacate the premises and deliver its possession to petitioner without need of a judicial order; and (3) UNANGST refusal to do so will entitle petitioner to take immediate possession of the property.

UNANGST failed to repurchase the property within the stipulated period. As a result, BAUTISTA filed a complaint for specific performance or recovery of possession, for sum of money, for consolidation of ownership and damages against UNANGST.

UNANGST argued that her consent to the deed of sale with right to repurchase was procured under duress and that even assuming that her consent was freely given, the contract partakes of the nature of an equitable mortgage.

BAUTISTA alleged taht the deed should not be construed as an equitable mortgage as it does not fall under any of the instances mentioned in Article 1602 of the Civil Code where the agreement can be construed as an equitable mortgage. He added that the "language and terms of the Deed of Sale with Right to Repurchase executed by UNANGST in favor of him are clear and unequivocal. Said contract must be construed with its literal sense."

ISSUE:

Should the deed of sale with right to repurchase executed by the parties be construed as an equitable mortgage?

HELD:

The Deed of Sale with Right of Repurchase executed by the parties was an equitable mortgage.

First, before executing the deed, respondent and Salak were under police custody due to the complaint lodged against them by petitioner. They were sorely pressed for money, as they would not be released from custody unless they paid petitioner. It was at this point that respondent was constrained to execute a deed of sale with right to repurchase. It is established that respondent signed the deed only because of the urgent necessity of obtaining funds.

Second, petitioner allowed respondent and Salak to retain the possession of the property despite the execution of the deed. In fact, respondent and Salak were not bound to deliver the possession of the property to petitioner if they would pay him the amount he demanded.

In a contract of sale with pacto de retro, the legal title to the property is immediately transferred to the vendee, subject to the vendor's right to redeem. Retention, therefore, by the vendor of the possession of the property is inconsistent with the vendee's acquisition of the right of ownership under a true sale.

Third, the purchase price stated in the deed was the amount of the indebtedness of both respondent and Salak to petitioner.

The above-mentioned circumstances show that the true intention of the parties is to secure the payment of said debts. The decisive factor in determining the true nature of the transaction between the parties is the intent of the parties, as shown not necessarily by the terminology used in the contract but by all the surrounding circumstances having a tendency to fix and determine the real nature of their design and understanding.Verily, an equitable mortgage under paragraphs 2 and 6 of Article 1602 exists here. The presumption enunciated by Article 1602, the existence of one circumstance is enough to construe a contract of sale to be one of equitable mortgage.

CARDENTE V. RUBIN (1987)

SECOND DIVISION

[ G.R. No. 73651, November 27, 1987 ]

IGNACIO CARDENTE AND ANASTACIA T. CARDENTE, PETITIONERS, VS. THE INTERMEDIATE APPELLATE COURT AND SPOUSES RUPERTO RUBIN AND PRIMITIVA C. RUBIN, RESPONDENTS.

FACTS:

Sometime in 1956, CARDENTE purchased from Isidro Palanay one hectare of land. The sale was by public document. Immediately after the purchase, the Cardentes took possession of the land and planted various crops and trees thereon.  They have been in continuous possession ever since, adverse to the whole world. Four years later, Isidro Palanay sold the entire property to the private respondents, RUPERTO RUBIN who was informed by the former of the first sale of the one-hectare portion to CARDENTE.  The deed of sale was registered and a new title was issued.

ISSUE:

Who has the better right over the property?

Whether or not the private respondents acted in good faith when they registered the deed of sale.

HELD:

1) CARDENTES. Because of the notorious and continuous possession and full enjoyment by petitioners of the disputed one-hectare property long before the private respondents purchased the same from Palanay.

2) RUBIN's failure to inquire and to investigate the basis of CARDENTE's actual occupation of the land forming a substantial part of what they were buying militates against their posited lack of knowledge of the first sale.

ART. 1544.  If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

It is undisputed that the private respondents registered the sale in their favor whereas the petitioners did not.  But mere registration of the sale is not enough.  Good faith must concur with the registration.  Bad faith renders the registration nothing but an exercise in futility.

GO V. BACARON (2005)

THIRD DIVISION

[ G.R. NO. 159048, October 11, 2005 ]

BENNY GO, PETITIONER, VS. ELIODORO BACARON, RESPONDENT.

FACTS:

Eliodoro BACARON conveyed a 15.3955-hectare parcel of land  in favor of Benny GO for P20,000.00. He however averred that prior to extending said loan to him, GO required him to execute a document purporting to be a Transfer of Rights but was told that the same would only be a formality as he could redeem the unregistered land the moment he pays the loan. BACARON remains in possession of the property even after the conclusion of the transaction and continued paying  the real property taxes subsequent to the alleged sale. About a year thereafter, BACARON, seeking to recover his property, went to GO to pay his alleged "loan" but the latter refused to receive the same and to return his property saying that the transaction between them was a sale and not a mortgage.

ISSUE:

Whether the agreement entered into by the parties was one for equitable mortgage or for absolute sale.

HELD:

The instances in which a contract of sale is presumed to be an equitable mortgage are enumerated in Article 1602 of the Civil Code as follows:

Art. 1602. The contract shall be presumed to be an equitable mortgage, in any of the following cases:

(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee as rent or otherwise shall be considered as interest which shall be subject to the usury laws.

Furthermore, Article 1604 of the Civil Code provides that the provisions of Article 1602 shall also apply to a contract purporting to be an absolute sale.

The present Contract, which purports to be an absolute deed of sale, should be deemed an equitable mortgage for the following reasons: (1) the consideration has been proven to be unusually inadequate; (2) the supposed vendor has remained in possession of the property even after the execution of the instrument; and (3) the alleged seller has continued to pay the real estate taxes on the property.

LUMAYAG V. NEMEñO (2007)

FIRST DIVISION

[ G.R. NO. 162112, July 03, 2007 ]

DOMINGO R. LUMAYAG AND FELIPA N. LUMAYAG, PETITIONERS, VS. HEIRS OF JACINTO NEMEÑO AND DALMACIA DAYANGCO-NEMEÑO, REPRESENTED BY MELITON NEMEÑO, RESPONDENTS.

D E C I S I O N

FACTS:

On 1985, JACINTO NEMENO, conveyed to LUMAYAG the two parcels of coconut land. The instrument of conveyance is denominated as Deed of Sale with Pacto De Retro. It was stipulated that the consideration for the alleged sale was P20,000.00 and that the vendors a retro have the right to repurchase the same lots within five years from the date of the execution of the instrument. It was likewise agreed thereunder that in the event no purchase is effected within the said stipulated period of five years "conveyance shall become absolute and irrevocable without the necessity of drawing up a new absolute deed of sale, subject to the requirements of law regarding consolidation of ownership of real property."

The NEMENOs filed against the LUMAYAGs on December 1996 a complaint for Declaration of Contract as Equitable Mortgage, Accounting and Redemption with Damages. LUMAYAG denied that the contract in question was an equitable mortgage and claimed that the amount of P20,000.00 received by the plaintiff heirs was the consideration for the sale of the two lots and not a loan and asserted that the action was already barred by laches and prescription and the complaint itself states no cause of action.

ISSUE:

Whether or not the deed of sale executed by the parties with pacto de retro is actually an equitable mortgage.

Were the titles to the subject parcels of land had already been consolidated to petitioners by operation of law because the five (5)-year prescriptive period for the respondents to repurchase expired in 1990?

Was the action to redeem the property already time-barred?

HELD:

1) The transaction was one of an equitable mortgage. First, the supposed price for the sale with pacto de retro in the amount of P20,000.00 is unusually inadequate for the two (2) parcels of land, the total area of which is almost 5.5 hectares. Seocnd, REPONDENTs remained in possession of the subject properties even after the execution of the subject instrument. Third, they also paid for the realty taxes of the same. Fourth, the attendance of a pactum commissorium renders the stipulation contrary to the nature of a true pacto de retro sale.

An equitable mortgage has been defined "as one which although lacking in some formality, or form or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as security for a debt, and contains nothing impossible or contrary to law."

Article 1602 of the Civil Code enumerates the instances when a contract, regardless of its nomenclature, may be presumed to be an equitable mortgage, to wit:

(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another instrument extending the period of redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation.

The presence of even one of the circumstances in Article 1602 is sufficient basis to declare a contract as one of equitable mortgage.

2) Evidently, the failure of the respondent heirs to redeem the properties within the stipulated period indubitably vested the absolute title to and ownership thereof to the petitioners. But such consequence would only be true if the contract that was executed between the parties was indeed a pacto de retro sale and not an equitable mortgage. Having ruled that the instrument executed by the parties is one of an equitable mortgage, RESPONDENTS can now redeem the mortgaged properties from PETITIONER within thirty (30) days from finality of this decision. Otherwise, the latter would be given the option to foreclose the mortgaged properties, for as a rule, in a real estate mortgage, when the principal obligation is not paid when due, the mortgagee has the right to foreclose the mortgage and to have the property seized and sold with the view of applying the proceeds to the payment of the obligation.

ROCKVILLE V. CULLA (2009)

SECOND DIVISION

[ G.R. No. 155716, October 02, 2009 ]

ROCKVILLE EXCEL INTERNATIONAL EXIM CORPORATION, PETITIONER, VS. SPOUSES OLIGARIO CULLA AND BERNARDITA MIRANDA, RESPONDENTS.

D E C I S I O N

FACTS:

The spouses Culla are the registered owners of a parcel of land.They mortgaged this property to PS Bank to secure a loan of P1,400,000.00. To prevent the foreclosure, HUSBAND approached ROCKVILLE for financial assistance. Rockville extended him total loan amount of P2,000,000.00. When HUSBAND failed to pay the loan after repeated demands and promises to pay, he agreed to pay their indebtedness by selling to ROCKVILLE another property the spouses owned. The parties agreed to fix the purchase price at P3,500,000.00 since a survey revealed that the property is worth more than the P2,000,000.00 loan.

ROCKVILLE and HUSBAND executed a Deed of Absolute Sale over the property with an agreement that the former would pay the additional P1,500,000.00 after WIFE affixes her signature to the Deed of Absolute Sale since the land is a conjugal property. ROCKVILLE filed a complaint for Specific Performance and Damages when WIFE continued to refuse to sign,  insisting that the transaction was an absolute sale by way of dacion en pago.

ISSUE:

Whether the transaction entered by the parties is therefore an absolute sale or an equitable mortgage.

RULING:

The transaction between the parties was in reality an equitable mortgage, not an absolute sale. First, the SPOUSES retained possession of the property. Second, ROCKVILLE kept a part of the purchase price. Third, ROCKVILLE continued to give the SPOUSES extensions on the period to repay their loan even after the parties allegedly agreed to a dacion en pago. Fourth, unequivocal testimonies of H & W that the purpose of the Deed of Absolute Sale was merely to guarantee their loan.

In determining the nature of a contract, courts are not bound by the title or name given by the parties. The decisive factor in evaluating an agreement is the intention of the parties, as shown, not necessarily by the terminology used in the contract but, by their conduct, words, actions and deeds prior to, during and immediately after executing the agreement. After all an equitable mortgage has been defined as one which although lacking in some formality, or form or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as security for a debt, there being no impossibility nor anything contrary to law in this intent.

 TORIO V. ROSARIO (1953)

[ G. R. No. L-5536, September 25, 1953 ]

LAUREANA TORIO, PLAINTIFF AND APPELLANT, VS. NICANOR ROSARIO, DEFENDANT AND APPELLEE.

FACTS:

Laureana Torio and Julian Raymundo were co-owhers pro indiviso of a parcel of land of small area.  Raymundo sold his share to Nicanor Rosario.  The transfer was recorded in the office of the register of deeds.  The period for legal redemption is nine days (Article 1524, old Civil Code).  Without making any previous offer to repurchase the property, Laureana Torio brought the present action to exercise her right of legal redemption before the expiration of said period. 

The lower court held that plaintiff has lost her right to redeem the property because of her failure to offer to repurchase the property before she instituted the present action which is a sine qua non requirement before she could exercise the right of legal redemption and as a consequence it dismissed the complaint with costs. 

Plaintiff has appealed from this decision.

ISSUE:

Is there any need of making a previous tender of the redemption money before the right of redemption can be exercised?

HELD:

The tender of redemption price is not essential or a condition precedent to the co-owner's right to redeem a parcel of land. The important thing is to assert it in time and in proper form. It appeared that the deed of sale of the property in question was recorded in the office of the register of deeds, which step has the effect of an offer or tender to redeem contemplated by the law.  Plaintiff's right to redeem must be upheld. 

Wherefore, the decision appealed from is reversed.  Judgment is hereby rendered ordering defendant to execute a deed of reconveyance in favor of plaintiff.

VALDEZ V. VIERNES (1991)

FIRST DIVISION

[ G.R. No. 85082, February 25, 1991 ]

SPOUSES PASTOR VALDEZ AND VIRGINIA VALDEZ, PETITIONERS, VS. HONORABLE COURT OF APPEALS AND FELICIDAD VIERNES, FRANCISCO ANTE, AND ANTONIO ANTE, RESPONDENTS.

D E C I S I O N

FACTS:

Spouses Ante were the registered owners of a parcel of land. Antonio Ante, there son, as attorney in fact, executed a deed of sale in favor of spouses VALDEZ who started fencing the whole lot in the presence of the VIERNESes. Since the owner’s duplicate certificate of title was not delivered in due time despite ANTE's promise to deliver the same in a few days, petitioners registered their notice of adverse claim over the said property on September 6, 1982 with the Register of Deeds. Thereupon, they learned that ANTE had delivered the owner’s duplicate certificate of title as a collateral Dr. Garma who then turned over to the Valdez spouses the said title after spouses paid for the obligation of ANTE.

The spouses then proceeded to register the deeds of sale in 1981 with the Register of Deeds and was informed that the title had been declared null and void because the ANTE spouses had filed a petition earlier for the issuance of a new owner’s duplicate certificate of title on the ground that the owner’s duplicate copy had been lost. Said owner’s duplicate copy was delivered by ANTE to  Felicidad  VIERNES who thereafter together with the Deed of Assignment of the same property  presented the same to the Register of Deeds for registration in 1982.

ISSUES:

1) Who has the better right over the property?

2) Can VIERNES claim good faith on her part?

3) Whether or not the subsequent owner's duplicate title be declaared null and void and the previous one be reinstated?

HELD:

1) The VALDEZes acquired subject lot in good faith and for valuable consideration from the ANTEs and as such owners petitioners fenced the property taking possession thereof.  Thus, when petitioners annotated their adverse claim in the Register of Deeds they thereby established a superior right to the property in question as against respondent Viernes.

"Art. 1544.  If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership, shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title provided there is good faith."

The sale of the subject lot to VALDEZes was made long before the execution of the Deed of Assignment of said lot to VIERNES and that petitioners annotated their adverse claim as vendees of the property as early as September 6, 1982 with the Register of Deeds.On the other hand the deed of Assignment in favor of Viernes of the said lot was registered with the Register of Deeds of Quezon City only on November 11, 1982 whereby a new title was issued in the name of Viernes.

2) VIERNES cannot claim good faith in the purchase of the subject lot and the subsequent registration of the Deed of Assignment in her favor.  After VALDEZes purchased the lot they immediately fenced the same with the knowledge and without objection of respondent Viernes and her husband and they were informed by the petitioners about their purchase of the same.  Moreover, when petitioners annotated their adverse claim as vendees of the property with the Register of Deeds of Quezon City, it was effectively a notice to the whole world including respondent Viernes.

3) ANTE, as well as VIERNES, knew that the owner’s duplicate copy of certificate of title was never lost, consequently the filing of the petition in court for the issuance of a new one was attended with fraud and gross misrepresentation and thus null and void.


WHEREFORE, the judgment in favor of the the VALDEZes. 

alpuerto

CRISMINA GARMENTS, INC., PETITIONER, VS. COURT OF APPEAL AND NORMA SIAPNO, RESPONDENTS. 

Facts: 
"During the period from February 1979 to April 1979, the herein petitioner, which was engaged in the export of girls' denim pants, contracted the services of the [respondent], the sole proprietress of the D'Wilmar Garments, for the sewing of 20,762 pieces of assorted girls’ denims supplied by the petitioner under Purchase Orders Nos. 1404, dated February 15, 1979, 0430 dated February 1, 1979, 1453 dated April 30, 1979. The petitioner was obliged to pay the respondent, for her services, in the total amount of P76,410.00. At first, the respondent was told that the sewing of some of the pants was defective. She offered to take delivery of the defective pants. However, she was later told by petitioner's representative that the goods were already good. She was told to just return for her check of P76,410.00. However, the petitioner failed to pay her the aforesaid amount. This prompted her to hire the services of counsel whowrote a letter to the petitioner demanding payment of the aforesaid amount within ten (10) days from receipt thereof. On February 7, 1990, the [petitioner]'s vice-[p]resident-comptroller, wrote a letter to [respondent]'s counsel, averring, inter alia, that the pairs of jeans sewn by her, numbering 6,164 pairs, were defective and that she was liable to the [petitioner] for the amount of P49,925.51 which was the value of the damaged pairs of denim pants and demanded refund of the aforesaid amount. "On January 8, 1981, the [respondent] filed her complaint against the [petitioner] with the [trial court] for the collection of the principal amount of P76,410.00. x xx Issue: Whether or not it is proper to impose interest at the rate of twelve percent (12%) per annum for an obligation that does not involve a loan or forbearance of money in the absence of stipulation of the parties. Ruling: Because the amount due in this case arose from a contract for a piece of work, not from a loan or forbearance of money, the legal interest of six percent (6%) per annum should be applied. Furthermore, since the amount of the demand could be established with certainty when the Complaint was filed, the six percent (6%) interest should be computed from the filing of the said Complaint. But after the judgment becomes final and executory until the obligation is satisfied, the interest should be reckoned at twelve percent (12%) per year. The rate of interest shall be six percent (6%) per annum, computed from the time of the filing of the Complaint in the trial court until the finality of the judgment. If the adjudged principal and the interest (or any part thereof) remain unpaid thereafter, the interest rate shall be twelve percent (12%) per annum computed from the time the judgment becomes final and executory until it is fully satisfied. No pronouncement as to costs.

DEL MONTE PHILIPPINES, INC., PETITIONER, VS. NAPOLEON N. ARAGONES, RESPONDENT.

 Facts: On September 18, 1988, herein petitioner Del Monte Philippines Inc. (DMPI) entered into an “Agreement” with MEGA-WAFF, represented by “Managing Principal” Edilberto Garcia (Garcia), whereby the latter undertook “the supply and installation of modular pavement” at DMPI’s condiments warehouse at Cagayan de Oro City within 60 calendar days from signing of the agreement. Aragones later failed to collect from MEGA-WAFF the full payment of the concrete blocks. He thus sent DMPI a] advising it of MEGA-WAFF’s unpaid obligation and requesting it to earmark and withhold the amount of P188,652.65 “from MEGA-WAFF’s billing” to be paid directly to him “lest Garcia collects and fails to pay him.” Aragones was thus prompted to file on May 25, 1989 a complaint for sum of money (P188,652.65) with damages against Garcia and/or MEGA-WAFF and DMPI before the Regional Trial Court (RTC) of Lanao del Norte which was raffled to Branch 5 thereof. Aragones impleaded DMPI on the strength of Articles 1729 and 1467 of the Civil Code, he contending that it was liable to him who put labor upon or furnished materials for a piece of work. Issue: Assuming that defendant DMPI is liable to plaintiff, whether or not cross defendant Garcia/MEGA-WAFF shall be liable to DMPI for reimbursement. Held: Of course, while defendant DMPI is indeed directly liable to pay plaintiff the cost of the construction material (modular paving blocks) sought to be collected, this defendant has also a right of recourse against cross defendant Garcia/MEGA-WAFF for reimbursement of whatever amount it will be required here to pay plaintiff, otherwise it would result in making defendant Garcia/MEGA-WAFF enrich itself at the expense of defendant DMPI. Additionally since the evidence on record shows that plaintiff was compelled to litigate this matter if only to collect a just and demandable obligation, the refusal of these defendants to pay their obligation upon demand could not be justified in law, thus both defendants should be condemned to pay exemplary damages in the amount of P20,000.00 each and attorney’s fees in the amount of P10,000.00 each, including the cost of this suit.

ISAIAS  AND MARCELINA R. FABRIGAS

 vs.

SAN FRANCISCO DEL MONTE, INC., RESPONDENT. 

 Facts: On April 23, 1983, herein petitioner spouses Isaias and Marcelina(Spouses Fabrigas) and respondent San Francisco Del Monte, Inc. ("Del Monte") entered into an agreement, denominated as Contract to Sell No. 2482-V, whereby the latter agreed to sell to Spouses Fabrigas a parcel of residential The agreement stipulated that Spouses Fabrigas shall pay P30,000.00 as down payment and the balance within ten (10) years in monthly successive installments of P1,285.69. On January 21, 1985, petitioner Marcelina and Del Monte entered into another agreement denominated as Contract to Sell No. 2491-V, covering the same property but under restructured terms of payment. Under the second contract, the parties agreed on a new purchase price of P131,642.58, the amount of P26,328.52 as down payment and the balance to be paid in monthly installments of P2,984.60 each. No other payments were made by petitioners except the amount of P10,000.00 which petitioners tendered sometime in October 1987 but which Del Monte refused to accept. For failure to pay, Del Monte notified petitioners on March 30, 1989 that Contract to Sell No. 2482-V had been cancelled and demanded that petitioners vacate the property. On September 28, 1990, Del Monte instituted an action for Recovery of Possession with Damages against Spouses Fabrigas before the RTC, Branch 63 of Makati City. The complaint alleged that Spouses Fabrigas owed Del Monte the principal amount of P206,223.80 plus interest of 24% per annum. In their answer, Spouses Fabrigas claimed, among others, that Del Monte unilaterally cancelled the first contract and forced petitioner Marcelina to execute the second contract, which materially and unjustly altered the terms and conditions of the original contract. After trial on the merits, the trial court rendered a decision, upholding the validity of Contract to Sell No. 2491-V and ordering Spouses Fabrigas either to complete payments thereunder or to vacate the property. Issues: Whether or not Contract to Sell No. 2491-V is valid and binding. Held: The Court notes that defendant, Marcelina Fabrigas, although she had to sign contract No. 2491-V, to avoid forfeiture of her down payment, and her other monthly amortizations, was entirely free to refuse to accept the new contract. There was no clear case of intimidation or threat on the part of plaintiff in offering the new contract to her. At most, since she was of sufficient intelligence to discern the agreement she is entering into, her signing of Contract No. 2491-V is taken to be valid and binding. The fact that she has paid monthly amortizations subsequent to the execution of Contract to Sell No. 2491-V, is an indication that she had recognized the validity of such contract. There is nothing to prevent respondent Del Monte from enforcing its contractual stipulations and pursuing the proper court action to hold petitioners liable for their breach thereof. 

 LUZON DEVELOPMENT BANK, PETITIONER, VS. ANGELES CATHERINE ENRIQUEZ, RESPONDENT.

 Facts: The BANK is a domestic financial corporation that extends loans to subdivision developers/owners. Petitioner DELTA is a domestic corporation engaged in the business of developing and selling real estate properties, which is owned by Ricardo De Leon. De Leon and his spouse obtained a P4 million loan from the BANK for the express purpose of developing Delta Homes I. To secure the loan, the spouses De Leon executed in favor of the BANK a real estate mortgage (REM) on several of their properties. Subsequently, this REM was amended] by increasing the amount of the secured loan from P4 million to P8 million.Both the REM and the amendment were annotated on TCT No. T-637183] Sometime in 1997, DELTA executed a Contract to Sell under certain conditions with respondent Angeles Catherine Enriquez (Enriquez) over the house and lot in Lot 4 for the purchase price of P614,950.00. Enriquez made a downpayment of P114,950.00. When DELTA defaulted on its loan obligation, the BANK, instead of foreclosing the REM, agreed to a dation in payment or a dacion en pago. It appears, however, that the dacion en pago was not annotated on the TCT of Lot 4. Enriquez filed a complaint against DELTA and the BANK alleging that DELTA violated the terms of its License to Sell. Enriquez sought a full refund of the P301,063.42 that she had already paid to DELTA, award of damages, and the imposition of administrative fines on DELTA and the BANK. Issues: Whether the Contract to Sell conveys ownership; Whether the dacion en pago extinguished the loan obligation, such that DELTA has no more obligations to the BANK; Whether the BANK is entitled to damages and attorney's fees for being compelled to litigate; and What is the effect of Enriquez's failure to appeal the OP's Decision regarding her obligation to pay the balance on the purchase price. Ruling: Contract to sell does not transfer ownership A contract to sell is one where the prospective seller reserves the transfer of title to the prospective buyer until the happening of an event, such as full payment of the purchase price. What the seller obliges himself to do is to sell the subject property only when the entire amount of the purchase price has already been delivered to him. "In other words, the full payment of the purchase price partakes of a suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and thus, ownership is retained by the prospective seller without further remedies by the prospective buyer. It does not, by itself, transfer ownership to the buyer. Dacion en pago extinguished the loan obligation Without any reservation or condition, the Dacion stated that the assigned properties served as full payment of DELTA's "total obligation" to the BANK. The BANK accepted said properties as equivalent of the loaned amount and as full satisfaction of DELTA's debt. The BANK cannot complain if, as it turned out, some of those assigned properties (such as Lot 4) are covered by existing contracts to sell. There is nothing on record that warrants the award of exemplary damages as well as attorney's fees in favor of the BANK. The Court will not review Enriquez's initial claims about the supposed violation of the price ceiling in BP 220, since this issue was no longer pursued by the parties, not even by Enriquez, who chose not to file the required pleadingsbefore the Court. The parties were informed in the Court's September 5, 2007 Resolution that issues that are not included in their memoranda shall be deemed waived or abandoned. Since Enriquez did not file a memorandum in either petition, she is deemed to have waived the said issue.  

RIZALINO V. LEONORA (2007) 

  Facts: Petitioners Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado, and Enriqueta, all surnamed Oesmer, together with Adolfo Oesmer (Adolfo) and Jesus Oesmer (Jesus), are brothers and sisters, and the co-owners of undivided shares of two parcels of agricultural and tenanted land. Sometime in March 1989, Rogelio Paular, a resident and former Municipal Secretary of Carmona, Cavite, brought along petitioner Ernesto to meet with a certain Sotero Lee, President of respondent Paraiso Development Corporation, at Otani Hotel in Manila Pursuant to the said meeting, a Contract to Sell was drafted by the Executive Assistant of Sotero Lee, InocenciaAlmo. On 1 April 1989, petitioners Ernesto and Enriqueta signed the aforesaid Contract to Sell. A check in the amount of P100,000.00, payable to Ernesto, was given as option money. Sometime thereafter, Rizalino, Leonora, Bibiano, Jr., and Librado also signed the said Contract to Sell. However, two of the brothers, Adolfo and Jesus, did not sign the document. In a letter, petitioners informed the former of their intention to rescind the Contract to Sell and to return the amount of P100,000.00 given by respondent as option money. Respondent did not respond to the aforesaid letter. Herein petitioners, together with Adolfo and Jesus, filed a Complaint for Declaration of Nullity or for Annulment of Option Agreement or Contract to Sell with Damages before the Regional Trial Court (RTC) of Bacoor, Cavite. The said case was docketed as Civil Case No. BCV-91-49. Issue: Is the Contract to Sell entered into by the parties is one with a unilateral promise to sell? Held: No, the Contract to Sell entered into by the parties is not a unilateral promise to sell merely because it used the word option money when it referred to the amount of P100,000.00, which also form part of the purchase price.Although the same was denominated as "option money," it is actually in the nature of earnest money or down payment when considered with the other terms of the contract. Doubtless, the agreement is not a mere unilateral promise to sell, but, indeed, it is a Contract to Sell. 

 OPULENCIA V. SIMUNDAC (1998) Facts: In a complaint for specific performance filed with the court a quo [herein private respondents] AladinSimundac and Miguel Oliven alleged that [herein petitioner] Natalia CarpenaOpulencia executed in their favor a “CONTRACT TO SELL” Lot 2125 of the Sta. Rosa Estate, consisting of 23,766 square meters located in Sta. Rosa, Laguna at P150.00 per square meter; that plaintiffs paid a downpayment of P300,000.00 but defendant, despite demands, failed to comply with her obligations under the contract. [Private respondents] therefore prayed that [petitioner] be ordered to perform her contractual obligations and to further pay damages, attorney’s fee and litigation expenses. In her traverse, [petitioner] admitted the execution of the contract in favor of plaintiffs and receipt of P300,000.00 as downpayment. However, she put forward the following affirmative defenses: that the property subject of the contract formed part of the Estate of Demetrio Carpena (petitioner’s father), in respect of which a petition for probate was filed with the Regional Trial Court, Branch 24, Biñan, Laguna; that at the time the contract was executed, the parties were aware of the pendency of the probate proceeding; that the contract to sell was not approved by the probate court; that realizing the nullity of the contract [petitioner] had offered to return the downpayment received from [private respondents], but the latter refused to accept it; that [private respondents] further failed to provide funds for the tenant who demanded P150,00.00 in payment of his tenancy rights on the land; that [petitioner] had chosen to rescind the contract. Issue: Whether or not the Contract toSell executed by the petitioner and private respondents without the requisite probate court approval is valid.” Held: The Contract to Sell is valid. As correctly ruled by the Court of Appeals, Section 7 of Rule 89 of the Rules of Court is not applicable, because petitioner entered into the Contract to Sell in her capacity as an heiress, not as an executrix or administratrix of the estate. In the contract, she represented herself as the “lawful owner” and seller of the subject parcel of land. She also explained the reason for the sale to be “difficulties in her living” conditions and consequent “need of cash.”[13] These representations clearly evince that she was not acting on behalf of the estate under probate when she entered into the Contract to Sell. Accordingly, the jurisprudence cited by petitioner has no application to the instant case. The Court emphasize that hereditary rights are vested in the heir or heirs from the moment of the decedent’s death. Petitioner, therefore, became the owner of her hereditary share the moment her father died. Thus, the lack of judicial approval does not invalidate the Contract to Sell, because the petitioner has the substantive right to sell the whole or a part of her share in the estate of her late father.

 DE GUZMAN V. TOYOTA (2006) Facts: This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul the Order, dated September 9, 1999, of the Regional Trial Court of Quezon City (the RTC), Branch 105, which dismissed the complaint for damages filed by petitioner Carlos B. De Guzman against respondent Toyota Cubao, Inc. On November 27, 1997, petitioner purchased from respondent a brand new white Toyota Hi-Lux 2.4 SS double cab motor vehicle, 1996 model, in the amount of P508,000. Petitioner made a down payment of P152,400, leaving a balance of P355,600 which was payable in 36 months with 54% interest. The vehicle was delivered to petitioner two days later. On October 18, 1998, petitioner demanded the replacement of the engine of the vehicle because it developed a crack after traversing Marcos Highway during a heavy rain. Petitioner asserted that respondent should replace the engine with a new one based on an implied warranty. Respondent countered that the alleged damage on the engine was not covered by a warranty. On April 20, 1999, petitioner filed a complaint for damages against respondent with the RTC. Respondent moved to dismiss the case on the ground that under Article 1571 of the Civil Code, the petitioner's cause of action had prescribed as the case was filed more than six months from the date the vehicle was sold and/or delivered. Issue: Has the right of the plaintiff to file an action for damages against the respondent already prescribe? Held: Yes. Under Article 1599 of the Civil Code, once an express warranty is breached, the buyer can accept or keep the goods and maintain an action against the seller for damages. In the absence of an existing express warranty on the part of the respondent, as in this case, the allegations in petitioner's complaint for damages were clearly anchored on the enforcement of an implied warranty against hidden defects, i.e., that the engine of the vehicle which respondent had sold to him was not defective. By filing this case, petitioner wants to hold respondent responsible for breach of implied warranty for having sold a vehicle with defective engine. Such being the case, petitioner should have exercised this right within six months from the delivery of the thing sold.[7] Since petitioner filed the complaint on April 20, 1999, or more than nineteen months counted from November 29, 1997 (the date of the delivery of the motor vehicle), his cause of action had become time-barred.

  MOLES V. DIOLOSA (1989) Facts: In 1977, petitioner needed a linotype printing machine for his printing business, the LM Press at Bacolod City, and applied for an industrial loan with the Development Bank of the Philippines (hereinafter, DBP) for the purchase thereof. An agent of Smith, Bell and Co. introduced the latter to private respondent, owner of the Diolosa Publishing House in Iloilo City, who had two available machines. Thereafter, petitioner went to Iloilo City to inspect the two machines offered for sale and was informed that the same were secondhand but functional. The petitioner together with Rogelio Yusay, a letterpress machine operator, decided to buy the linotype machine. The transaction was basically verbal in nature but to facilitate the loan application with the DBP, a pro forma invoice, dated April 23, 1977 and reflecting the amount of P50,000.00 as the consideration of the sale, was signed by petitioner with an addendum that payment had to not yet been made but that he promised pay the full amount upon the release of his loan from the aforementioned bank on or before the end of the month. The machine was delivered to petitioner's publishing house. Another employee of the Diolosa Publishing House, Tomas Plondaya, stayed at petitioner's house for almost a month to train the latter's cousin in operating the machine. After that, private respondent issued a certification wherein he warranted that the machine sold was in "A-1 condition", together with other express warranties. On November 29, 1977, petitioner wrote private respondent that the machine was not functioning properly as it needed a new distributor bar. Private respondent made no reply to said letter. After several telephone calls regarding the defects in the machine, private respondent sent two technicians to make thenecessary repairs but they failed to put the machine in running condition. In fact, since then petitioner was never able to use the machine. Issue: Can the plaintiff’s actionfor rescission of contractfiled against the private respondent prosper? Why? Held: Yes, on the basis of the foregoing circumstances, the inescapable conclusion is that private respondent is indeed bound by the express warranty he executed in favor of herein petitioner and while it is true that Article 1571 of the Civil Code provides for a prescriptive period of six months for a redhibitory action, a cursory reading of the ten preceding articles to which it refers will reveal that said rule may be applied only in case of implied warranties. Consequently, the general rule on rescission of contract, which is four years, shall apply. Considering that the original case for rescission was filed only one year after the delivery of the subject machine, the same is well within the prescriptive period.  

TINIO V. MANZANO (1999) Facts: Private respondent Nellie A. Manzano is a co-owner, together with her brothers and sisters Ernesto Manzano, Roland Manzano, Pamela Manzano and Edna Manzano of Lot No. 113, CCs-167, situated in Victory Norte, Santiago, Isabela. On or about April 12, 1988, while private respondent was abroad, her brothers and sisters sold the aforesaid property to petitioner Rolando Tinio, the son of the other petitioners, spouses Amado and Milagros Tinio, for the price of P100,000.00. In a forged "Affidavit of Waiver of Rights, Claim and Interest", private respondent was made to appear as having waived her rights over Lot No. 113 in favor of Rolando Tinio. Subsequently, on April 19, 1991, Rolando Tinio obtained a Miscellaneous Sales Patent over a portion of Lot No. 113, denominated as Lot No. 113-B, with an area of 105 square meters, from the Bureau of Lands. The patent was registered in the Registry of Deeds for the Province of Isabela, which issued Original Certificate of Title No. P-55907 in the name of Rolando Tinio. Upon private respondent's return to the Philippines in 1994, the plaintiff-appellee offered to redeem the shares of her co-owners pursuant to Articles 1620 and 1621 of the New Civil Code. Receiving no reply, private respondent filed an action for legal redemption before the trial court. Issue: Whether or not plaintiff has the right of legal redemption of the properties of her co-owners under Articles 1619 and 1620 of the New Civil Code. Held: As for the question of jurisdiction, we agree with the appellate court that what is involved in this case is not jurisdiction to dispose public lands which is exclusively vested with the Director of the Bureau of Lands, but the right of legal redemption given to a co-owner of a parcel of land. Jurisdiction is determinable on the basis of the allegations in the complaint. The character of the land as being part of the public domain could not be impliedly included nor could it be inferred, as contended by petitioners, on the first issue of "whether plaintiff can exercise her right of legal redemption of the properties of her co-owners under Articles 1619 and 1620 of the New Civil Code." Neither could statements and/or references in the pleadings and subsequently in the judgments of the lower courts that "Rolando Tinio obtained a Miscellaneous Sales Patent" over the subject property be sufficient to consider the issue as having been raised, or that such fact was already within the knowledge of the courts which should have been adjudicated upon. Verily, herein petitioners as defendants in the court a quo stipulated on the co-ownership by the Manzano siblings and the acquisition by sale of the subject property from the said co-owners. Now that petitioner Rolando Tinio had acquired a certificate of title of the subject property in his name, the same has become private property beyond the control or jurisdiction of the Bureau of Lands.