Assignment #1 to sell and as such, anchored their contention on the very terms of the contract as mentioned in

a. Articles 1458-1474 - Book of De Leon ¶4, that said spouses have agreed to sell the herein mentioned property to Alilano B. Jabil and
condition in ¶5, in which the spouses agreed to sign a final deed of absolute sale upon payment
b. Cases: of the remaining balance of P4,000.00.

1. DIGNOS VS. CA, 158 SCRA 375 ISSUE:

Is the contract between the parties a contract of sale or a contract to sell?
FACTS:
In 1965, Petitioners executed a deed of sale of a lot to respondent Jabil. The deed indicated HELD:
that the lot is payable on two installments and that the petitioners will only sign an absolute The contract between the parties is a contract of sale. It has been held that a deed of sale is
contract of sale once the installments were paid on time. absolute in nature although dominated as a “Deed of Conditional Sale” where nowhere in the
contract in question is a proviso or stipulation to the effect that title to the property sold is
However, on the said deadline, the respondent Jabil failed to pay the amount. The next month, reserved in the vendor until full payment of the purchase price, nor is there a stipulation giving
Petitioners sold the lot to another person. The respondent now contends that Petitioners cannot the vendor the right to unilaterally rescind the contract the moment the vendee fails to pay
sell the lot to somebody else as there was already an absolute contract of sale and there was within a fixed period. All the elements of a valid contract of sale are present in the document
already delivery. and that Spouses Dignos never notified Jabil by notarial act that they were rescinding the
contract, and neither did they file a suit in court to rescind the sale. There is no showing that
Petitioners, on the other hand, contend that their contract is a conditional contract of sale with Jabil properly authorized a certain Cipriano Amistad to tell petitioners that he was already
the condition of full payment before the absolute sale can be made. Moreover, Petitioners aver waiving his rights to the land in question.
that their act of selling the lot to another person is a sign of rescission.
2. TAN VS. BENORILAO, G.R. No. 153820, October 16, 2009
ISSUES:
1. Whether or not the contract is an absolute contract of sale FACTS:
2. Whether or not there was a valid rescission of said contract A 689 sq.m. parcel of land in Tagaytay City with TCT №. 26432, co-owned by respondent
spouses Lamberto and Erlinda Benolirao and spouses Reynaldo and Norma Taningco, was the
HELD: subject of a Deed of Conditional Sale in favor of petitioner Delfin Tan for P 1,378,000.
1. Yes. The deed of sale does not state anywhere that the title of the lot will remain at the Pursuant to the deed, petitioner paid the P 200,000 downpayment. Then, Lamberto Benolirao
vendor until all the installments are paid. It is well known that an instrument’s intent is much died and an extrajudicial settlement of his estate was executed which caused the issuance of a
stronger than its name. In this case, all the elements of an absolute contract of sale are present. new certificate of title over the property (TCT №. 27355) with a corresponding annotation in
accordance with Section 4, Rule 74 of the Rules of Court. Despite a second extension,
In an absolute sale, the ownership is transferred upon delivery. There is evidence that the petitioner failed to comply with his obligation to pay the remaining balance due. In response to
respondent is already residing on the property and that the petitioner has already left. Thus, the demand letter subsequently sent by the vendors, petitioner demanded the return of his
Respondent Jabil is now the owner of the land. downpayment, contending that the annotation on the title was an encumberance on the
property that would prevent the vendors from delivering a clear title to him. When the vendors
2. No. There was no valid rescission as the facts show that the petitioners sold the lot to refused, petitioner filed a complaint for specific performance and caused the annotation of a
another without even giving a notarial act. Since the contract is an absolute sale, it is governed notice of lis pendens on the title. Respondents filed a motion for cancellation of the notice of
by Art. 1592 of the Civil Code of the Philippines. lis pendens and was granted. The lower court, after due proceedings, ruled that the forfeiture
was proper while the Court of Appeals affirmed in toto hence, the present petition.
Petitioners should have given a notarial act of rescission or filed a suit in court for such
rescission. Thus, there could be no valid rescission. ISSUE:
WON an annotation made pursuant to Section 3, Rule 74 of the ROC on a COT conveying
FACTS: real property considered an encumberance on the property?
Spouses Silvestre Dignos and Isabela Lumungsod de Dignos sold their parcel of land in Opon,
Lapu-Lapu to private respondent Antonio Jabil for the sum of P28,000.00 payable for 2 HELD:
installments, with an assumption of indebtedness with the First Insular Bank of Cebu in the Court ruled in the affirmative. The litigation subject of a notice of lis pendens must directly
sum of P12,000.00 as was acknowledged by vendors in the Deed of Absolute Sale (Exh. C), involve a specific property which is necessarily affected by the judgment. While the deed does
and the next installment to be paid 3 months after. But the same land was also sold by Spouses have real property for its object, petitioner’s complaint is an in personam action since it asks
Dignos (Exh. J) which was registered in the Registry of Deeds. This prompted Jabil to file a the court to compel the respondent to do something — either to rescind or reform the contract
civil suit against Spouses Dignos for the 2nd sale to Spouses Luciano Cabigas and Jovita de — and enforces his personal rights against the respondent, not against the property subject of
Cabigas, who were then US citizens. CFI of Cebu rendered the 2nd sale to Spouses Cabigas the deed.
null and void, directing Spouses Dignos to return the P35,000.00 to Spouses Cabigas and
ordered Jabil to pay the remaining balance. Spouses Dignos contend that Exh. C is a contract
The contract between the parties was merely a contract to sell where the vendor retained title The Zambales spouses were the homestead patentees of a parcel of land. Claiming that the Nin
and ownership to the property until petitioner has fully paid the purchase price. Since he had Bay Mining Corp. had removed silica sand from their land and destroyed the plants and other
no claim of ownership or title yet, he had no right to ask for the annotation of a lis pendens improvements therein, they instituted a case claiming for damages. The Zambales spouses
notice on the title of the property. entered into a Compromise Agreement with the Corporation; by virtue of which, the disputed
property was sold to one Preysley. Ten years after the Trial Court’s decision based on the
Jurisprudence has established that where the seller promises to execute a deed of absolute sale Compromise Agreement and nine years after the sale, the Zambales spouses filed a civil case
upon the completion by the buyer of the payment of the price, contract is only a contract to for annulment of the Deed of Sale with recovery of possession and ownership with damages,
sell. contending that it was their lawyer who prevailed upon them to sign the Compromise
An annotation is placed on new certificates of title issued pursuant to the distribution and Agreement; that they wer unschooled and did not understand the contents thereof.
partition of a decedent’s real properties to warn third persons on the possible interests of
excluded heirs or unpaid creditors in these properties. The annotation, therefore, creates a legal ISSUE:
encumbrance or lien on the real property in favor of the excluded heirs or creditors. Where a WON the Compromise Agreement violates the alienation and encumbrance of a homestead lot
buyer purchases the real property despite the annotation, he must be ready for the possibility within five years from the issuance of the patent.
that the title could be subject to the rights of excluded parties.
RULING:
The remedy of rescission under Art. 1191 cannot apply to mere contracts to sell. In a contract The sale is void. The law does not distinguish between executor and consummated sales. The
to sell, the vendor remains the owner for as long as the vendee has not complied fully with the bilateral promise to buy and sell the homestead lot at a price certain, which was reciprocally
condition of paying the purchase price. If the vendor should eject vendee for failure to meet demandable, was entered into within the five-year prohibitory period and is therefore, illegal
the condition precedent, he is enforcing the contract and not rescinding it. (Termination is the and void. To all interests and purposes, therefore, there was an actual executory sale perfected
proper remedy.) Unless time is of the essence to the contract, slight delay is not a ground for during the period of prohibition except that it was reciprocally demandable thereafter and the
rescission. agency to sell to any third person was deferred until after the expiration of the prohibitory
period, and the agency to sell made effective only after the lapse of the said period, was
3. ARTATES VS. URBI, G.R. No. L-29421. January 30, 1971. merely a devise to circumvent the prohibition.

FACTS: The bilateral promise to buy and sell and the agency to sell entered into within five years from
Spouses Artates and Pojas sought the annulment of the execution of a homestead issued and the date of the homestead patent was in violation of the Public Land Law, although the
duly registered in their names. A public sale was made to satisfy a judgment against Artates, executed sale was deferred until after the expiration of the five-year prohibitory period.
which amount was awarded to Urbi for physical injuries. Plaintiff spouses alleged that said
sale violated the provision of the Public Land Law exempting said property from execution 5. QUIROGA VS. PARSONS, 38 PHIL. 501
from any debt contracted within the five-year period from the date of the issuance of the
patent. FACTS:
A contract was entered into by and between Quiroga and Parsons for the exclusive sale of
ISSUE: Quiroga beds in the Visayan Islands. The tenor of said contract provides that Quiroga shall
WON the execution sale is valid. furnish beds of his manufacture to Parsons for the latter’s establishment in Iloilo, and shall
invoice them at the same price he fixed for sales in Manila, and in the invoices, shall make an
RULING: allowance of a discount as commission on the sales; and Parsons shall order the beds by the
The execution sale is null and void. As thus prescribed by law, for a period of five years from dozen, whether of the same or different styles. Parsons further binds himself to pay Quiroga
the date of the government grant, lands acquired by free or homestead patent shall not only be for the beds received within 60 days from the date of their shipment, and binds himself not to
incapable of being encumbered or alienated in favour of the government itself or any of its sell any other kind except Quiroga beds.
institutions or of duly constituted banking corporations, but also, they shall not be liable to the
satisfaction of any debt contracted within the said period, whether or not the indebtedness Quiroga contends that Parsons violated the following obligations: not to sell beds at higher
shall mature during or after the prohibited time. This provision is mandatory and a sale made prices than those of the invoices, to have an open establishment in Iloilo; to conduct the
in violation thereof is null and void and produces no effect. agency, to keep the beds on public exhibition, and to pay for the advertisement expenses for
the same, and to order the beds by the dozen and in no other manner. He further alleged that
Though it may be a limitation on the right of ownership of the grantee, the salutary purpose of Parsons was his agent for the sale in Iloilo, and said obligations are implied in a contract of
the provision is to preserve and keep for the homesteader or his family the land given to him commercial agency.
gratuitously by the State, so that being a property owner, he may become and remain a
contented and useful member of the society. ISSUE:
WON Parsons, by reason of the contract, was a purchaser or an agent of Quiroga.
4. HEIRS OF ENRIQUE ZAMBALES VS. CA, 120 SCRA 897 RULING:
The contract entered into by the parties is one of a purchase and sale. In the contract in
FACTS: question, what was essential, as constituting the cause and subject matter, is that Quiroga was
to furnish Parsons with beds which the latter might order, at the price stipulated, and that RULING:
Parsons was to pay the price in the manner stipulated. These features exclude the legal There was no perfected contract of sale of Lot 4. It was conditionally or contingently awarded
conception of an Agency or Order to Sell, whereby the mandatory or agent received the thing to the Mendozas subject to the approval by the city council of the proposed consolidation
to sell it, and does not pay its price, but delivers to the principal the price he obtains from the subdivision plan and the approval of the award by the valuation committee and higher
sale of the thing to a third person, and if he does not succeed in selling it, he returns it. authorities. When the plan with the area of Lot 4 reduced to 2,608.7 square meters was
approved, the Mendozas should have manifested in writing their acceptance of the award for
6. CONCRETE AGGREGATES INC. VS. CTA, 185 SCRA 461 the purchase of Lot 4 just to show that they were still interested in its purchase although the
area was reduced and to obviate ally doubt on the matter. They did not do so. The PHHC
FACTS: board of directors acted within its rights in withdrawing the tentative award. We cannot say
Concrete Aggregates Inc. is a domestic corporation which processes rock aggregates mined by there was a meeting of minds on the purchase of Lot 4
it from private lands and produce ready-mixed concrete and plant-mixed hot asphalt. Upon the
investigation conducted by the CTA, the peitioner is liable to pay taxes which the latter 8. TOYOTA SHAW, INC. VS CA, 244 SCRA 320
disputes. Petitioner contends that it is a contractor subject only to the 3% contractor's tax under
Section 191 of the 1968 National Internal Revenue Code and not a manufacturer subject to the Facts:
7% sales tax under Section 186 of the same Code. Sosa wanted to purchase a Toyota Lite Ace. upon contacting Toyota Shaw, Inc., he was told
that there was an available unit. Sosa and his son, Gilbert, went to the Toyota and met
ISSUE: Bernardo, a sales representative of Toyota. The parties agreed that the car shall be delivered
WON the petitioner is a contractor or a manufacturer. on June 17, 1989 and that the balance of the purchase price would be paid by credit financing
through B.A. Finance. They accomplished a printed Vehicle Sales Proposal (VSP) which
RULING: shows that the customer's name, home address , the model series of the vehicle, the installment
Concrete Aggregates Inc. is a manufacturer. Petitioner's raw materials are processed under a mode of payment with the initial cash outlay down. On the date of the delivery, the vehicle
prescribed formula and thereby changed by means of machinery into a finished product, was not delivered. Toyota alleged that no sale was entered into between it and Sosa.
altering their quality, transforming them into marketable state or preparing them for any of the
specific uses of industry. ISSUE:
A contract to make is a contract of sale if the article is already substantially in existence at the WON the stnadard VSP woulfd represent a contract of sale between the parties.
time of the order and merely requires some alteration, modification or adaptation to the buyer's
wishes or purposes. A contract for the sale of an article which the vendor in the ordinary RULING:
course of his business manufactures or procures for the general market, whether the same is on Neither logic nor recourse to one's imagination can lead to the conclusion that VSP is a
hand at the time or not is a contract for the sale of goods. perfected contract of sale. It is not a contract of sale, thus no obligation on the part of Toyota
to transfer ownership of a determinate thing to Sosa and no correlative obligation on the part
CONTRACTOR of the latter to pay therefor a price certain appears therein.
→ one who undertakes to do a specific job or piece of work for other persons, using his own
means and methods A definite agreement on the manner of payment of the price is an essential element in the
formation of a binding and enforceable contract of sale. This is so because the agreement as to
→TRUE TEST: renders service in the form of independent occupation, representing the will the manner of payment goes into the price such that a disagreement on the manner of payment
of his employer only as to the result of his work is tantamount to a failure to agree on the price. Definiteness as to the price is an essential
element of a binding agreement to sell personal property. The VSP was a mere proposal which
7. PEOPLE’S HOMESITE & HOUSING CORP. VS. CA, 133 SCRA 777 was aborted in lieu of subsequent

FACTS: 9. Sampaguita Pictures vs. Jalwindor Manufacturers, Inc., 93 SCRA 420

The PHHC board of directors passed Resolution No. 513 awarding to Spouses Mendoza the
Consolidation Subdivision Plan on Lot 4 subject to the approval of the Quezon City Council. FACTS:
The city council disapproved the said proposed plan. However approval was made by the said Sampaguita leased to Capitol “300” Inc. the roof deck of its building with the agreement that
council upon submission of a revised plan reducing the land area. Later on, PHHC board of all permanent improvements Capitol will make on said property shall belong to Sampaguita
directors passed another resolution withdrawing the tentative award to the Mendoza -spouses without any part on the latter to reimburse Capitol for the expenses of said improvements.
who never paid the price of the lot nor made the 20% initial deposit. The spouses contend that Shortly, Capitol purchased on credit from Jalwindor glass and wooden jalousies, which the
there was a perfected sale of Lot 4 thus they can enforce against the PHHC an action for latter itself delivered and installed in the leased premises, replacing the existing windows.
specific performance.
Jalwindor filed with the CFI of Rizal, Quezon City an action for collection of a sum of money
ISSUE: with a petition for preliminary attachment against Capitol for its failure to pay its purchases.
WON there was a perfected contract of sale. Later, Jalwindor and Capitol submitted to the trial court a Compromised Agreement wherein
Capitol acknowledged its indebtedness and that all the materials that Capitol purchased will be
considered as security for such undertaking. Meanwhile, Sampaguita filed a complaint for
ejectment and for collection of a sum of money against Capitol for the latter’s failure to pay
rentals and the City Court of Quezon City ordered Capitol to vacate the premises and to pay
Sampaguita.

On the other hand, Capitol likewise failed to comply with the terms of the Compromise
Agreement, and a levy was made on the glass and wooden jalousies. Sampaguita filed a third-
party claim alleging that it is the owner of said materials and not Capitol, but Jalwindor filed
an idemnity bond in favor of the Sheriff and the items were sold at public auction, with
Jalwindor as the highest bidder . Sampaguita filed with the CFI of Rizal, Quezon City an
action to nullify the Sheriff's sale and for an injunction to prevent Jalwindor from detaching
the glass and wooden jalousies.

ISSUE:
WON there was a delivery made and, therefore, a transfer of ownership of the thing sold?

RULING:
YES. When the glass and wooden jealousies were delivered and installed in the lease
premises, Capitol became the owner thereof. Ownership is not transferred by perfection of the
contract but by delivery, either actual or constructive.

Capitol entered into a lease contract with Sampaguita, and the latter became the owner of the
items mentioned by virtue of the contract agreement. When levy was made on the items,
Capitol ( the judgment debtor) was no longer the owner thereof.