zosa finals digest

CARLOS B. DE GUZMAN  VS. TOYOTA CUBAO, INC.

G.R. NO. 141480, November 29, 2006

FACTS:

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.

ISSUE:

Whether or not there was an implied warranty.

FACTS:

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.

Petitioner contends that the subject motor vehicle comes within the context of Republic Act No. 7394. Thus, petitioner relies on Article 68 (f) (2) in relation to Article 169 of Republic Act No. 7394. Article 4 (q) of the said law defines "consumer products and services" as goods, services and credits, debts or obligations which are primarily for personal, family, household or agricultural purposes, which shall include, but not limited to, food, drugs, cosmetics, and devices. The following provisions of Republic Act No. 7394 state:

Art. 67. Applicable Law on Warranties. — The provisions of the Civil Code on conditions and warranties shall govern all contracts of sale with conditions and warranties.

Art. 68. Additional Provisions on Warranties. — In addition to the Civil Code provisions on sale with warranties, the following provisions shall govern the sale of consumer products with warranty:

e) Duration of warranty. The seller and the consumer may stipulate the period within which the express warranty shall be enforceable. If the implied warranty on merchantability accompanies an express warranty, both will be of equal duration.

Any other implied warranty shall endure not less than sixty (60) days nor more than one (1) year following the sale of new consumer products.

f) Breach of warranties — xxx

x x x

2) In case of breach of implied warranty, the consumer may retain in the goods and recover damages, or reject the goods, cancel the contract and recover from the seller so much of the purchase price as has been paid, including damages. (Emphasis supplied.)

Consequently, even if the complaint is made to fall under the Republic Act No. 7394, the same should still be dismissed since the prescriptive period for implied warranty thereunder, which is one year, had likewise lapsed.

SPOUSES JOSE FABIA AND ANITA FABIA VS. INTERMEDIATE APPELLATE COURT, ANGEL MARARAC AND REMEDIOS ALEJANDRO, EUGENIO, GILDO AND ROMEO, ALL SURNAMED MARARAC, REPRESENTED BY THEIR MOTHER CARLINA RAFANAN

G.R. No. L-66101, November 21, 1984

FACTS:

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.

HELD:

Undeniably, the land adjoining that which is sought to be redeemed is a piece of residential land on which the respondents live. The stipulation of facts of the parties recites: 

"1. Plaintiffs reside on a lot east of the land in question and adjacent to it; (Italics supplied) 

xxx xxx xxx

Again, this is deemed an admission by the respondents of the residential character of their own land thus dis­qualifying them from rightfully redeeming the property in question.
Thus, the circumstances under which legal redemption may be exercised not having been found present in the case at bar, the respondents have no right to enforce against the petitioners.

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

G.R. No. 128721, March 09, 1999

FACTS:

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.

HELD:

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.

JERRY T. MOLES VS. INTERMEDIATE APPELLATE COURT AND MARIANO M. DIOLOSA
G.R. No. 73913, January 31, 1989

FACTS:

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.

FACTS:

1.     It is generally held that in the sale of a designated and specific article sold as secondhand, there is no implied warranty as to its quality or fitness for the purpose intended, at least where it is subject to inspection at the time of the sale.  On the other hand, there is also authority to the effect that in a sale of secondhand articles there may be, under some circumstances, an implied warranty of fitness for the ordinary purpose of the article sold or for the particular purpose of the buyer.

Said general rule, however, is not without exceptions.  Article 1562 of our Civil Code, which was taken from the Uniform Sales Act, provides:

"Art. 1562.  In a sale of goods, there is an implied warranty or condition as to the quality or fitness of the goods, as follows:

(1)     Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are acquired, and it appears that the buyer relies on the seller's skill or judgment (whether he be the grower or manufacturer or not), there is an implied warranty that the goods shall be reasonably fit for such purpose;"

2.    We have to consider the rule on redhibitory defects contemplated in Article 1561 of the Civil Code.  A redhibitory defect must be an imperfection or defect of such nature as to engender a certain degree of importance.  An imperfection or defect of little consequence does not come within the category of being redhibitory.

As already narrated, an expert witness for the petitioner categorically established that the machine required major repairs before it could be used.  This, plus the fact that petitioner never made appropriate use of the machine from the time of purchase until an action was filed, attest to the major defects in said machine, by reason of which the rescission of the contract of sale is sought.  The factual finding, therefore, of the trial court that the machine is not reasonably fit for the particular purpose for which it was intended must be upheld, there being ample evidence to sustain the same.

At a belated stage of this appeal, private respondent came up for the first time with the contention that the action for rescission is barred by prescription.  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.  The present case involves one with an express warranty.  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.  This is aside from the doctrinal rule that the defense of prescription is waived and cannot be considered on appeal if not raised in the trial court, and this case does not have the features for an exception to said rule.

MYRNA RAMOS VS. SUSANA S. SARAO AND JONAS RAMOS
G.R. NO. 149756, February 11, 2005

FACTS:

On February 21, 1991, Spouses Jonas Ramos and Myrna Ramos executed a contract over their conjugal house and lot in favor of Susana S. Sarao for and in consideration of P1,310,430. Entitled “DEED OF SALE UNDER PACTO DE RETRO,” the contract, inter alia, granted the Ramos spouses the option to repurchase the property within six months from February 21, 1991, for P1,310,430 plus an interest of 4.5 percent a month. It was further agreed that should the spouses fail to pay the monthly interest or to exercise the right to repurchase within the stipulated period, the conveyance would be deemed an absolute sale.

On July 30, 1991, Myrna Ramos tendered to Sarao the amount of P1,633,034.20 in the form of two manager’s checks, which the latter refused to accept for being allegedly insufficient.

ISSUE:

Whether or not the subject Deed of Sale under Pacto de Retro was, and is in reality and under the law an equitable mortgage.

HELD:

The pivotal issue in the instant case is whether the parties intended the contract to be a bona fide pacto de retro sale or an equitable mortgage.

In a pacto de retro, ownership of the property sold is immediately transferred to the vendee a retro, subject only to the repurchase by the vendor a retro within the stipulated period. The vendor a retro’s failure to exercise the right of repurchase within the agreed time vests upon the vendee a retro, by operation of law, absolute title to the property. Such title is not impaired even if the vendee a retro fails to consolidate title under Article 1607 of the Civil Code.

On the other hand, an equitable mortgage is a contract that --although lacking the formality, the form or words, or other requisites demanded by a statute -- nevertheless reveals the intention of the parties to burden a piece or pieces of real property as security for a debt.The essential requisites of such a contract are as follows: (1) the parties enter into what appears to be a contract of sale, but (2) their intention is to secure an existing debt by way of a mortgage. The nonpayment of the debt when due gives the mortgagee the right to foreclose the mortgage, sell the property, and apply the proceeds of the sale to the satisfaction of the loan obligation.

There is no single conclusive test to determine whether a deed absolute on its face is really a simple loan accommodation secured by a mortgage.^[32] However, the law enumerates several instances that show when a contract is presumed to be an equitable mortgage, as follows:

Article 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.^[

Jurisprudence has consistently declared that the presence of even just one of the circumstances set forth in the forgoing Civil Code provision suffices to convert a contract to an equitable mortgage. Article 1602 specifically states that the equitable presumption applies to any of the cases therein enumerated.

SPS. AMADO & MILAGROS TINIO AND ROLANDO TINIO VS. NELLIE MANZANO
G.R. No. 132102, May 19, 1999

FACTS:

Private respondent Nelie Manzano is a co-owner of a parcel of land which her brother and sister’s sold the lot to spouses Amado and Milagros Tinio(spouse). While the private respondent was abroad, her brother and sisters sold the aforesaid property to petitioner Rolando Tinio, the son of the other petitioners, spouses Amado and Milagros Tinio with a forged “Affidavit of Waiver of Rights, Claims and Interest” the respondent was made to appear as having waived her rights. The disputed lot was succesfully registered in the name of Rolando Tinio.

ISSUE:

Whether or not the plaintiff can exercise her right of legal redemption of the properties of her co-owners.

HELD:

"It is clear that the plaintiff was not apprised of the consummated sale. In fact, she did not even know the actual vendee until after she filed the complaint. Concededly, the plaintiff was aware of the negotiations for the sale of the properties by her co-owners for which reason she asked the prospective vendees to wait for her arrival in order that they could talk about the sale. But her awareness of the intention to sell by her co-owners cannot take the place of actual knowledge because it was not shown that she had anything to do with the negotiations and the consummation of the sale. On the contrary what was shown is that the defendants tried to conceal the sale and even attempted to deprive the plaintiff of her share in the property by causing the preparation of a falsified affidavit of assignment of rights and then obtain a sales patent and a certificate of title over the land to the exclusion of the plaintiff even though they knew very well that she did not sell her share of the property to them. It was not only the right of the plaintiff to redeem which the defendants suppressed but even her very right to the property."

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

G.R. NO. 153033, June 23, 2005

FACTS:

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 within 60 calendar days from signing of the agreement.

To source its supply of concrete blocks to be installed on the pavement of the DMPI warehouse, MEGA-WAFF, as CONTRACTOR represented by Garcia, entered into a “Supply Agreement” with Dynablock Enterprises, represented by herein respondent Aragones, as SUPPLIER.

After the installation of the pavement in the warehouse, Aragones later on demand from MEGA-WAFF the full payment of the concrete blocks, on which he failed to collect.

Aragones later failed to collect from MEGA-WAFF the full payment of the concrete blocks.  He thus sent DMPI a letter dated March 10, 1989, received by the latter on March 13, 1989, 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 “[l]est Garcia collects and fails to pay [him].”

         

ISSUE:

Whether it was one of sale or for a piece of work.

HELD:

Under Art. 1467 then of the Civil Code which provides:

ART. 1467.  A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or procures for the general market, whether the same is on hand at the time or not, is a contract of sale, but if the goods are to be manufactured specially for the customer and upon his special order, and not for the general market, it is a contract for a piece of work.

the “Supply Agreement” was decidedly a contract for a piece of work.

Following Art. 1729 of the Civil Code which provides:

ART. 1729.  Those who put their labor upon or furnish materials for a piece of work undertaken by the contractor have an action against the owner up to the amount owing from the latter to the contractor at the time the claim is made. 

ISAIAS F. FABRIGAS AND MARCELINA R. FABRIGAS VS. SAN FRANCISCO DEL MONTE, INC.

G.R. No. 152346, November 25, 2005

FACTS:

Spouses Fabrigas(petitioner) 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 land. The said lot was worth P109,200.00 and it was registered in the name of respondent Del Monte. The agreement stipulated that Spouses Fabrigas shall pay P30,000.00 as downpayment and the balance within ten years in monthly successive installments of P1,285.69.

After paying P30,000.00, Spouses Fabrigas took possession of the property but failed to make any installment payments on the balance of the purchase price. Despite the demand letter made by Del Monte and the grace period given still the said Spouses did not comply with their obligations.

On January 21, 1985, petitioner Marcelina and Del Monte entered into another agreement denominated as Contract to Sell No. 2941-V, covering the same property but under restructed 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 downpayment and the balance to be paid in monthly installments of P2,984.60 each.

After the said deal, the petitioner made some delinquent installments paying less than the stated amount, to which Del Monte made a demand letter to the petitioners. And this time they ordered the cancellation of the Contract to Sell No. 2941-V

ISSUE:

Whether or not the Contract to Sell No. 2941-V was valid.

HELD:

The Court quotes with approval the following factual observations of the trial court, which cannot be disturbed in this case, to wit:

The Court notes that defendant, Marcelina Fabrigas, although she had to sign contract No. 2491-V, to avoid forfeiture of her downpayment, 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. . . .

In sum, Contract to Sell No. 2491-V is valid and binding. 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 VS. ANGELES CATHERINE ENRIQUEZ
G.R. No. 168646, January 21, 2011

DELTA DEVELOPMENT AND MANAGEMENT SERVICES, INC. VS. ANGELES CATHERINE ENRIQUEZ AND LUZON DEVELOPMENT BANK

G.R. NO. 168666

FACTS:

Petitioner DELTA(which is owned by Ricardo de Leon) is a domestic corporation engaged in the business of developing and selling real estate properties loaned from Luzon Development 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,including Lot 4(which is the disputed lot). Sometime in 1997, DELTA executed a Contract to Sell 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.  The Deed of Assignment in Payment of Debt was executed on September 30, 1998 and stated that DELTA "assigns, transfers, and conveys and sets over to the assignee that real estate with the building and improvements existing thereon x x x in payment of the total obligation owing to the Bank x x x."  Unknown to Enriquez, among the properties assigned to the BANK was the house and lot of Lot 4, which is the subject of her Contract to Sell with DELTA.  The records do not bear out and the parties are silent on whether the BANK was able to transfer title to its name.  It appears, however, that the dacion en pago was not annotated on the TCT of Lot 4.

ISSUE/S:

1. Whether the Contract to Sell conveys ownership;
2. Whether the dacion en pago extinguished the loan obligation, such that DELTA has no more obligations to the BANK;

HELD:

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.

The BANK then posits that, if title to Lot 4 is ordered delivered to Enriquez, DELTA has the obligation to pay the BANK the corresponding value of Lot 4.  According to the BANK, the dation in payment extinguished the loan only to the extent of the value of the thing delivered.  Since Lot 4 would have no value to the BANK if it will be delivered to Enriquez, DELTA would remain indebted to that extent.

NATALIA CARPENA OPULENCIA VS. COURT OF APPEALS, ALADIN SIMUNDAC AND MIGUEL OLIVAN

G.R. No. 125835, July 30, 1998

FACTS:

Natalie Carpena Opulencia(petitioner) executed a contract to sell in favor of the respondents namely Aladin Simundac and Miguel Oliven a lot. Said respondents had already paid petitioner a downpayment worth P300,000.00. And said respondents brought an action for specific perfrormance to the petitioner. 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; 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.

ISSUE:

Whether or not the Contract to Sell executed by the petitioner and private respondents without the requisite probate court approval is valid.

FACTS:

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. Under the old Civil Code “Article 440 of the Civil Code provides that ‘the possession of hereditary property is deemed to be transmitted to the heir without interruption from the instant of the death of the decedent, in case the inheritance be accepted.’ And Manresa with reason states that upon the death of a person, each of his heirs ‘becomes the undivided owner of the whole estate left with respect to the part or portion which might be adjudicated to him, a community of ownership being thus formed among the coowners of the estate while it remains undivided.’ xxx And according to article 399 of the Civil Code, every part owner may assign or mortgage his part in the common property, and the effect of such assignment or mortgage shall be limited to the portion which may be allotted him in the partition upon the dissolution of the community. Hence, where some of the heirs, without the concurrence of the others, sold a property left by their deceased father, this Court, speaking thru its then Chief Justice Cayetano Arellano, said that the sale was valid, but that the effect thereof was limited to the share which may be allotted to the vendors upon the partition of the estate.”

RIZALINO, SUBSTITUTED BY HIS HEIRS, JOSEFINA, ROLANDO AND FERNANDO, ERNESTO, LEONORA, BIBIANO, JR., LIBRADO AND ENRIQUETA, ALL SURNAMED OESMER VS. PARAISO DEVELOPMENT CORPORATION

[ G.R. NO. 157493, February 05, 2007 ]

FACTS:

Petitioners (Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado, and Enriquita, all surnamed Oesmer, together with Adolfo Oesmer and Jesus Oesmer, are brothers and sisters, and the co-owners of undivided shares of two parcel of land. Respondent Paraiso Development Corporation bought from petitioners their respective share of the lot except the Adolfo and Jesus share. After the said meeting, a Contract to Sell was created between the parties, on which the petitioners affirming their signatures in the said contract.

Then the petitioner’s withdrew from the said contract and ask for the rescission to which they allege that they never sign the contract, the agent has no authority from the petitioners, that said petitioner was illiterate to sign the contract, etc.

ISSUE:

Whether or not there was a perfected contract between petitioners and respondents.

HELD:

It is well-settled that contracts are perfected by mere consent, upon the acceptance by the offeree of the offer made by the offeror. From that moment, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. To produce a contract, the acceptance must not qualify the terms of the offer. However, the acceptance may be express or implied. For a contract to arise, the acceptance must be made known to the offeror. Accordingly, the acceptance can be withdrawn or revoked before it is made known to the offeror.

In the case at bar, the Contract to Sell was perfected when the petitioners consented to the sale to the respondent of their shares in the subject parcels of land by affixing their signatures on the said contract. Such signatures show their acceptance of what has been stipulated in the Contract to Sell and such acceptance was made known to respondent corporation when the duplicate copy of the Contract to Sell was returned to the latter bearing petitioners' signatures.