Sales under Atty Carlo Busmente

1) Spouses Dignos vs. Court of Appeals

G.R. No. L-59266 February 29, 1988

Facts:
The spouses Silvestre and Isabela Dignos were owners of a parcel of land known
as Lot No. 3453. The spouses sold the same parcel of land to respondent Atilano Jabil
for P28,000.00, payable in two installments. A deed of sale was executed in favor of
Jabil.
Months later, spouses Dignos sold the same parcel of land in favor of spouses
Luciano and Jovita Cabigas, who were then U.S. citizens, for P35,000.00. A deed of
absolute sale was also executed in favor of the spouses Cabigas and registered in the
Office of the Register of Deeds.
When spouses Dignos refused to accept payment for the second installment from
Jabil and when the latter discovered the second sale made, Jabil filed suit.
The CFI rendered the second sale null and void ab initio and ordered Jabil to
reimburse the spouses Cabigas for the costs of the hollow block fence constructed on
the property. Both parties appealed to the CA. The CA affirmed the decision with
modification, removing the order to reimburse the expenses incurred by spouses
Cabihas for the fence. Hence the present petition for review on certiorari.

Issue:
WON: 1) the contract made with Jabil is a deed of absolute sale or a contract to
sell; 2) there was a valid rescission of sale between Jabil and spouses Dignos.

Held:
1) It was a Deed of Absolute Sale/Contract of Sale.
Spouses Dignos contend that the subject contract is a contract to sell by reason of
its 5th paragraph stipulating that the parties agree to sign a final deed of absolute sale
upon payment of the remaining balance. It is their position that title or ownership over
the property is expressly reserved in the vendor until the suspensive condition of full
payment of the balance of the purchase price is made.
The court rendered their contention untenable.
 The court ruled that there is no such stipulation reserving the title over the
property on the vendors (Spouses Dignos), nor does it give them the right to
unilaterally rescind the contract upon non-payment of the balance thereof within a
fixed period. Also, all the elements of a valid contract of sale under Article 1458 are
present. Moreover, it was found that there was actual delivery of the land to Jabil, as
he constructed beach resorts on the subject land. This fact was admitted by the
spouses Dignos.
2) Applying Article 1592, there was no valid rescission.
Spouses Dignos never notified Jabil by notarial act that they were rescinding the
contract nor did they file suit to rescind the sale. The spouses anchor their contention
on a letter by one claiming to be Jabils emissary informing them not to go to the
house as Jabil had no money and advising them to sell the land to another party.
However, there was no showing that the emissary was properly authorized to make
such extra-judicial rescission for Jabil.

Notes:
1) A deed of sale is absolute in nature although denominated as a Deed of
Conditional Sale, where nowhere in the contract is a stipulation that title to the
property sold is reserved in the vendor until full payment of the purchase price, nor is
there a stipulation giving the vendor the right to unilaterally rescind the contract the
moment the vendee fails to pay within a fixed period.
2) Elements of a valid contract of sale under Article 1458 of the Civil Code: (a)
consent or meeting of the minds; (b) determinate subject matter; and (c) price certain
in money or its equivalent.
3) Article 1477 - Ownership of the thing sold shall transfer to the vendee upon
actual or constructive delivery. Froilan vs. Pan Oriental Shipping Co. - in the
absence of stipulation to the contrary, the ownership of the thing sold passes to the
vendee upon actual or constructive delivery.
4) Article 1358 - acts and contracts which have for their object the
extinguishment of real rights over immovable property must appear in a public
document.

2) Lino Artates vs. Daniel Urbi

G.R. No. L-29421 January 30, 1971
Facts:
In a civil case filed by Daniel Urbi against Lino Artates for physical injuries
inflicted by the latter, the Justice of the Peace Court rendered judgment in favor of
Urbi and ordered Artates to pay the judgment. As a result, a public sale was
conducted by the Provincial Sheriff on the property of Artates to satisfy the judgment
amount, which was sold to Urbi. The spouses Lino and Manuela Artates thus filed suit
in the CFI seeking annulment of the execution of a homestead issued to them.
Spouses Artates allege that the sale of the homestead property to satisfy the
judgment amount was violative of the Public Land Law exempting said property from
execution for any debt contracted within 5 years from the date of issuance of its
patent. Also, that Urbi executed a deed of sale over the same parcel of land to one
Crisanto Soliven, a minor, in order to defraud the spouses and deprive them of
possession and the fruits of the land. The CFI held the execution sale was valid but
found that the sale by Urbi to Soliven was simulated and declared it to be null and
void. Urbi was thus ordered to reconvey the subject property to the spouses upon the
latter’s payment to him. Hence the present action.

Issue:
WON 1) the execution sale is valid; and 2) Urbi has acquired absolute ownership
over the property.

Held:
1) No, the execution sale was held null and void.
Lands acquired by free or homestead patent shall not be incapable of being
encumbered or alienated and shall not be liable to the satisfaction of any debt
contracted within the period provided, save certain exceptions. In the case at bar, the
homestead patent covering the subject property was auctioned to satisfy the civil
liability of Artates. The court ruled that this judgment debt cannot be enforced against
the sale of the homestead lot acquired by appelants less than 5 years before the
obligation accrued. This, regardless of whether the sale was voluntary, as in the case
of sale, or involuntary, as in the case of levy of property, as both instances would
violate the spirit of the law.
2) No. Urbi did not acquire absolute ownership.
 In the case at bar, what was issued to Urbi was only the sheriff’s provisional
certificate, under which he derived no definite title or right until the period for
redemption has expired and no redemption was made, or the issuance of a final deed
or certificate of sale. Thus, title to the property remains with the spouses Artates, with
the obligation to pay the judgment debt. Also, a deed of reconveyance need not be
executed in order to return possession of the land to the spouses.

Notes:
1) Section 118 of the Public Land Law - Except in favor of the Government or
any of its branches, units, or institutions, or legally constituted banking corporations,
lands acquired under free patent or homestead provisions shall not be subject to
encumbrance or alienation from the date of the approval of the application and for a
term of five years from and after the date of issuance of the patent or grant, nor shall
they become liable to the satisfaction of any debt contracted prior to the expiration of
said period, BUT the improvements or crops on the land may be mortgaged or
pledged to qualified persons, associations or corporations.
2) Reasons why non-liability of the homestead grant should be extended to extra-
contractual obligations - a) it is in consonance with the policy of the law, which is to
preserve and keep in the family of the homesteader that portion of public land given
to him by the State; and b) a levy and sale of the homestead land on account of extra-
contractual liability would uproot the homesteader and his family and turn them into
homeless waifs.

3) Heirs of Enrique Zambales vs. Court of Appeals

G. R. No. L-54070 February 28, 1983

Facts:
On September 6, 1955, spouses Enrique and Joaquina Zambales were granted a
homestead patent over a parcel of land in Palawan and covered by an OCT registered
in the Registry of Deeds. Spouses Zambales filed suit with CFI against the Nin Bay
Mining Corporation (NBMC) for allegedly removing silica sand from their land that
resulted in the destruction of plants and other improvements thereon. As a result, a
compromise agreement was entered into between the parties on October 29, 1959,
wherein the spouses bound themselves to sell the subject land in favor of the
corporation and the latter would pay the spouses for the damages caused and the
purchase price of the land. Also, that the spouses irrevocably assign the corporation as
their attorney-in-fact with full authority to sell and convey the land on September 10,
1960 or onward. The court rendered judgment based on the agreement and annotated
the same on the OCT covering the property.
On September 10, 1960, the corporation, as attorney-in-fact, sold the subject land
in favor of one Joaquin Preysler. The sale was approved by the then Secretary of
Agriculture and Natural Resources. 9 years after the sale, the spouses Zambales filed
suit with the CFI for the annulment of the deed of sale with recovery of possession
and ownership. They claim that they did not understand the contents of the
compromise agreement and that the corporation employed fraud, deceit and
manipulation in order to be appointed as the spouses’ attorney-in-fact with full
authority to sell the subject land.
The CFI ruled that the sale between the corporation and Presyler was null and
void and ordered Preysler to reconvey the subject land to the spouses Zambales. On
appeal, the CA reversed the trial court ruling, finding that the alleged fraud was not
substantiated by evidence. Hence the present petition.

Issue: WON: 1) the Compromise Agreement violated the Public Land Act

Held: 1) Yes.
The Public Land Act prohibits the alienation and encumbrance of of a homestead
lot within 5 years from the issuance of the patent. Any sale violative of such is
rendered illegal and void. The law does not distinguish between executory and
consummated sales. In the case at bar, the bilateral promise to buy and sell the
homestead lot was entered into during the five-year prohibitory period and is therefore
illegal and void. Also, the agency to sell the homestead lot was irrevocable. Thus, the
court held that there was already an actual executory sale perfected during the period
of prohibition.

Notes: 1) As the contract was void from the beginning for being expressly prohibited
by law, the action for declaration of its inexistence does not prescribe Also, the
approval of the sale by the Secretary of Agriculture and Natural Resources after the
lapse of five years from the date of the patent would neither legalize the sale.
4) Andres Quiroga vs. Parsons Hardware Co.,
G.R. No. L-11491 August 23, 1918

Facts:
Andres Quiroga entered into a contract with J. Parsons whereby the former
granted the latter the exclusive right to sell his manufactured beds in the Visayan
Islands. The contract entered into by them stipulates, among others, that the Quiroga
would furnish the beds and Parsons would invoice them at the same price fixed for
sales; that Parsons would order the beds by the dozen regardless of the style and
make; and that Parsons would pay Quiroga for the beds received within 60 days from
the date of their shipment.
For alleged violations of the contract entered into by them, Quiroga filed suit
against Parsons. Quiroga contends that the contract entered into by them is one of
agency to sell. The court ruled in favor of Parsons. Hence the present appeal.

Issue:
WON the contract was one for purchase and sale or of commercial agency.

Held:
The contract is one of purchase and sale.
In the case at bar, the contract provides that Quiroga would furnish Parsons with
the beds that the latter might order, at the price stipulated and paid in the manner
stipulated. The price agreed upon is determined by Quiroga with a discount ranging
from 20 to 25 percent depending on the class, with further discounts depending on
prompt payment. There was indeed an obligation on the part of Quiroga to supply the
beds and on the part of Parsons to pay for their price.
The court ruled that the above-mentioned features of the contract exclude agency
as Parsons, on receiving the bed, was obliged to pay their price within the term
provided, regardless of whether or not the beds were sold.

Notes:
5) Concrete Aggregates Inc. vs. Court of Tax Appeals
G.R. No. 55793 May 18, 1990

Facts:
Petitioner Concrete Aggregates Inc. is a domestic corporation engaged in the
business of processing rock aggregates mined from private lands and produces ready-
mixed concrete and plant-mixed hot asphalt.. In 1968, agents of the respondent
Commissioner of Internal Revenue assessed and demanded payment from the
petitioner on sales and ad valorem taxes for the first semester of that year. Petitioner
wrote to respondent disputing the assessment with respect to the sales tax. However,
in reply, the respondent demanded payment of the assessed amount otherwise the
same would be effected through summary remedies. Petitioner appealed to the
respondent Court of Tax Appeals.
The respondent court judged in favor of the respondent commissioner, ruling that
the petitioner is a manufacturer and is subject to the 7% sales tax under the NIRC.
Hence the present petition for review on certiorari.

Issue:
WON: 1) petitioner is a contractor or a manufacturer?; and 2) petitioner is subject
to the 3% contractors tax or the 7% sales tax;

Held:
1) Petitioner is a manufacturer.
Petitioner contends that it is a contractor as it was a license holder from the
Contractors Licensing Law and was classified as such thereunder. It posits that the
mixing of asphalt and cement is not a simple matter and requires the use of one’s own
means and methods without having to submit itself to control by the customer. Also,
petitioner further contends that it would only produce asphalt or concrete mix only
upon previous job orders otherwise, it would not do so. Lastly, that it is a specialty
contractor that is not covered by Section 191 of the Tax Code.
The court ruled otherwise. A contractor is one who, in the pursuit of independent
business, undertakes to do a specific job or piece of work for other persons, using his
own means and methods without submitting himself to control as to the petty details.
He represents the will of his employer only as to the result of his work but not as to
the means by which it is accomplished. Also, a contract to make is a contract of sale if
the article is already substantially in existence at the time of the order and merely
requires some alteration, modification or adaptation to the buyers wishes or purposes.
As to the contention of producing only upon previous job orders, the court stated that
the reason for this is due to the highly perishable nature of asphalt and concrete mix.
Such fact is argued by the petitioner itself.
Petitioner, as a manufacturer, not only manufactures the finished articles but also
sells or distributes them to others. In marketing its products, the company has
marketing personnel who visit regular and prospective clients that specify the
requirements according to his needs.
2) As the petitioner is held to be a manufacturer, it is thus subject to the 7% sales
tax.

Notes: 1) “Contractor” - CIR vs. Court of Tax Appeals - a person who, in the
pursuit of the independent business, undertakes to do a specific job or piece of work
for other persons, using his own means and methods without submitting himself to
control as to the petty details. The true test of a contractor as was held in the cases of
Luzon Stevedoring Co. Vs. Trinidad, and La Carlota Sugar Central vs. Trinidad,
would seem to be that he renders service in the course of an independent occupation,
representing the will of his employer only as to the result of his work, and not as to
the means by which it is accomplished.
2) Selling or distribution is an essential ingredient of manufacturing. The sale of a
manufactured product is properly incident to manufacture. The power to sell is an
indispensable adjunct to a manufacturing business
3) It is still good law that a contract to make is a contract of sale if the article is
already substantially in existence at the time of the order and merely requires some
alteration, modification or adaptation to the buyers wishes or purposes. A contract for
the sale 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 for the sale of goods.
4) Specialty contractor - Section 191 of the Tax Code - is one whose
operations pertain to construction work requiring special skill and involves the use of
specialized building trades or crafts.
6) People’s Homesite & Housing Corporation vs. Court of Appeals
G.R. No. L-61623 December 26, 1984

Facts:
Petitioner People’s Homesite & Housing Corporation (PHHC) passed a resolution
granting the tentative award to private respondents, Spouses Mendoza, of Lot No. 4
subject to the approval by both the Quezon City Council of the Revised Consolidation
Subdivision Plan and the OEC PHHC Valuation Committee and higher authorities.
The city council disapproved the proposed consolidation subdivision plan, of
which the spouses were advised. Another subdivision plan was submitted to the city
council for approval, which included Lot No. 4 with a reduced area, and was
approved by the city council. The PHHC Board of Directors passed a resolution
withdrawing their earlier award to the private respondents and re-awarded the same to
5 individuals. Ultimately, the corresponding deed of sales were executed in their
favor.
Private respondent spouses filed the instant action for specific performance and
damages. The trial court, however, sustained the withdrawal of the award. On appeal
to the C.A., the appellate court reversed the decision and declared the re-award void.
Hence the present appeal.

Issue:
WON there was a perfected sale of Lot No. 4

Held:
No. It was conditionally or contingently awarded to the private respondents
subject to the approval by the city council of the proposed subdivision plan and
approval of the award by the valuation committee and higher authorities.
When the second subdivision plan was submitted and approved, the private
respondents should have manifested their acceptance of the award for the purchase of
Lot No. 4 just to show they were still interested in its purchase. They did not do so.

Notes:
 1) The contract of sale is perfected at the moment there is a meeting of minds
upon the thing which is the object of the contract and upon the price. From that
moment, the parties may reciprocally demand performance, subject to the law
governing the form of contracts. (Article 1475)
2) In conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the happening of
the event which constitutes the condition. (Article 1181)

7) Toyota Shaw Inc. vs. Court of Appeals

G.R. No. L-116650 May 23, 1995

Facts:
Respondent Sosa wanted to purchase a Toyota Lite Ace. Sosa contacted
petitioner Toyota Shaw Inc, went there and met with its sales representative Popong
Bernardo.
Exhibit A reads in part: “Agreements Between Mr. sosa & Popong Bernardo of
Toyota Shaw Inc.” with the stipulations “1. All necessary documents will be
submitted to Toyota Shaw Inc. a week after, upon arrival of Mr. Sosa from the
Province of Marinduque where the unit will be used on the 19 th of June. 2. the down
payment of P100,000.00 will be paid by Mr. Sosa on June 15, 1989. 3. the Toyota
Shaw. 3. the Toyota Shaw Inc. Lite Ace Yellow, will be pick-up and released by the
Toyota Shaw Inc. on the 17th of June at 10 a.m.”
After payment of the down payment, a Vehicle Sales Proposal (VSP) was issued.
This document showed Mr. Sosa’s home address, that payment is by “installment”, to
be financed by B.A. Finance Corporation; and the balance to be financed.

Issue:
WON Exhibit A is a perfected contract of sale.
Held:
No, it is not a contract of sale. No obligation on the part of Toyota to transfer the
ownership of a determinate thing to Sosa and no correlative obligation on the part of
the latter to pay therefor a price certain appears therein. The provision on the down
payment of P100,000.00 made no specific reference to a sale of a vehicle. Also,
nothing was mentioned about the full purchase price and manner the installments
were to be paid.
Exhibit A also shows the absence of a meeting of minds between Toyota and
Sosa. Sosa did not even sign it. Also, Sosa was well aware that he was not dealing
with Toyota but with Popong Bernardo and that the latter did not misrepresent that he
had the authority to sell any Toyota vehicle. He knew that Bernardo was only a sales
representative of Toyota, hence a mere agent of the latter.
Exhibit A is considered as part of the initial phase of the generation or negotiation
stage of a contract of sale.
Notes:
1) 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
because the agreement as to the manner of payment goes into the price such that a
disagreement on the manner of payment is tantamount to a failure to agree on the
price.
2) Definiteness as to the price is an essential element of a binding agreement to
sell personal property.
3) Three stages in the contract of sale: (a) preparation, conception, or generation,
which is the period of negotiation and bargaining, ending at the moment of agreement
of the parties; (b) perfection or birth of the contract, which is the moment when the
parties come to agree on the terms of the contract; and (c) consummation or death,
which the fulfillment or performance of the terms agreed upon in the contract.

8) A.A. Addison vs. Marciana Felix

G.R. No. L-12342 August 3, 1918

Facts:
Appellant-plaintiff sold to Appellee-defendant 4 parcels of land. The latter agreed
to pay P3,000 at the time of the execution of the deed, and bound herself to pay the
remainder in installments – the first P2,000 and the second P5,000 thirty days after the
issuance of a certificate of title under the Land Registration Act, and further, within
10 years from the date of such title P10 for each coconut tree in bearing and P5 for
each such tree not in bearing that might grow thereon, with the condition that the total
price should not exceed P85,000. It was further agreed that the purchaser was to
deliver to the vendor 25% of the value of the products that she might obtain from the
moment she takes possession of them until the issuance of a Torrens certificate of
title.
It was stipulated that within one year from the date of the certificate of title in
favor of appellee, the latter may rescind the contract of purchase and sale with the
obligation to return to the vendor the net value of all the products of the 4 parcels of
land. The vendor, in this case, is also obliged to return to the purchaser all the sums
that she may have paid together with interest.
Plaintiff filed suit to compel the defendant to pay the first installment
demandable. The defendant raised the defense that the plaintiff failed to deliver the
lands that were subject of the sale. It was shown that only 2 of the 4 parcels were
designated, as more than two-thirds of these were found to be in the possession of one
Juan Villafuerte, who claims to be the owner of said parts occupied by him. The trial
court held that the contract of sale be rescinded and ordered the return of the P3000
paid on account of the price. Plaintiff appealed.

Issue:
WON there is a perfected contract of sale.

Held:
No.
The record shows that the plaintiff did not deliver the thing sold with respect to
the two parcels of land. He was not even able to show the first two parcels of land.
The Code imposes upon the vendor the obligation to deliver the thing sold. The
thing is considered to be delivered when it is placed “in the hands and possession of
the vendee.”
In the case at bar, the mere execution of the instrument was not a fulfillment of
the vendors’ obligation to deliver the thing sold, and that from such non-fulfillment
arises the purchaser’s right to demand the rescission of the sale and the return of the
price.

Notes:
1) It is true that the same article declares that the execution of public instruments
is equivalent to the delivery of the thing which is the object of the contract. But, in
order that this symbolic delivery may produce the effect of tradition, it is necessary
that the vendor shall have had such control over the thing sold that, at the moment of
the sale, its material delivery could have been made. It is not enough to confer upon
the purchaser the ownership and the right of possession. The thing sold must be
placed in his control. When there is no impediment whatever to prevent the thing sold
passing into the tenancy of the purchaser by the sole will of the vendor, symbolic
delivery through the execution of a public instrument is sufficient. But if,
notwithstanding the execution of the instrument, the purchaser cannot have the
enjoyment and material tenancy of the thing and make use of it himself or through
another in his name, because such tenancy and enjoyment are opposed by the
interposition of another will, then delivery has not been effected.

9) Sampaguita Pictures vs. Jalwindor Manufacturers Inc

G.R. No. L-43059 October 11, 1979

Facts:
Plaintiff-appellant leased the roof-deck of its building to Capitol 300 Inc. with the
stipulation, among others, that all permanent improvements made by the lessee on the
leased premises shall belong to the lessor without any obligation on the part of the
lessor to reimburse the lessee for the sum spent for said improvements and that any
such improvements shall be at the expense of the lessee, again, belonging to the
lessor.
Capitol 300 purchased on credit glass and wooden jalousies from defendant-
appellee, which were delivered and installed in the leased premises. Defendant-
appellee filed suit for the collection of a sum of money against Capitol 300 for failure
to pay its purchases. A compromise agreement was entered into by them.
In the meantime, Capitol 300 failed to pay its rentals to plaintiff-appellant. The
latter filed a complaint against the former. The trial court in said case ordered Capitol
300 to vacate the premises and to pay the plaintiff-appellant.
Capitol 300 failed to pay according to the terms of the compromise agreement.
The court thus made a levy on the glass and wooden jalousies. Plaintiff-appellant filed
a third-party claim alleging that it is the owner of said materials and not Capitol.

Issue:
 WON Sampaguita Pictures was the owner of the glass and wooden jalousies

Held:
Yes.
When the glass and wooden jalousies were delivered and installed in the
premises, Capitol 300 became the owner thereof. Ownership is not transferred by
perfection of the contract but by delivery, either actual or constructive. This is true
even if the purchase has been made on credit, as it is in the case at bar.
Plaintiff-appellant became the owner of the items in question by virtue of the
agreement in said contract. When levy on said items were made, Capitol, the
judgment debtor, was no longer the owner thereof. Thus, the items were illegally
levied upon since they do not belong to the judgment debtor. The fact that Capitol
failed to pay defendant-appellee the purchase price did not prevent the transfer of
ownership to Capitol. Since the items already belong to the plaintiff-appellant, the
levy and auction sale are null and void.

Notes:
1) Ownership is not transferred by perfection of the contract but by delivery,
either actual or constructive.
2) Payment of the purchase price is not essential to the transfer of ownership as
long as the property sold has been delivered. Ownership is acquired from the moment
the thing sold is delivered to the vendee, as when it was placed in his control and
possession.

10) Ten Forty Realty and Development Corporation vs. Marina Cruz
G.R. No. 151212 September 10, 2003

Facts:

Issue:

Held:

Notes:
11) Limson vs. C.A.
page 119

12) Atkins, Kroll & Co. vs. Cua Hian Tek

Page 123

13) Ang Yu Asuncion vs. C.A.

Page 103

14) Bible Baptist Church vs. C.A.

G.R. No. 126454 November 26, 2004

Facts:
Petitioner agreed to advance the large amount needed for the rescue of the
property, but in exchange, it asked the respondent spouses to grant it a long-term lease
and an option to buy the property.
Respondent Spouses Villanueva then leased to petitioner Bible Baptists Church
their property. The contract stipulated, among others, that the petitioner has the option
to buy the leased premises during the 15-year term of the lease. Should the petitioner
decide to purchase the same, it shall be for the amount of P1,800,000, payable by
down-payment to be agreed upon by both parties and the remainder by installments of
P120,000 per year.
In its petition, the church stated that they did not pay a separate and specific sum
of money to cover the option alone. But that its payment of the loan to rescue the
property should be deemed the consideration.
Issue:
WON the option to buy is founded upon a consideration.

Held:
No.
Applying Article 1479 of the New Civil Code, for an option contract to be valid
and enforceable against the promisor, there must be a separate and distinct
consideration that supports it.
 In the case at bar, petitioner argues that the consideration supporting the option
was their agreement to pay off respondent’s loan with the bank. However, the rule is
that an option contract needs to be supported by a separate consideration. The
consideration need not be monetary but could consist of other things or undertakings.
However, if the consideration is not monetary, these must be things or undertakings of
value, in view of the onerous nature of the contract of option. Furthermore, it must be
clearly specified as such in the option contract or clause.
Notes:

15) Osmena III vs. Power Sector Assets and Liabilities Management Corp.
16) Ridad vs. Filipinas Investments
17) Borbon II vs. Servicewide Specialist Inc.

18) Norkis Distributors vs. C.A.

G.R. No. 91029 February 7, 1991

Facts:
Petitioner Norkis sold to private respondent Alberto Nepales a brand-new
motorcycle, payable by means of a Letter of Guaranty from the Development Bank of
the Philippines. Credit was extended to Nepales for such purchase. A Sales Invoice
was issued, and the motorcycle was registered with the Land Transportation
Commission in his name.
Thereafter, the motorcycle was delivered to a certain Julian Nepales, allegedly an
agent of the private respondent. The vehicle met an accident thereafter. After
investigation by DBP, it was found that, at the time of the accident, the vehicle was
being driven by one Zacarias Payba.
The vehicle was stored in Norkis’ warehouse. After DBP released payment to
Norkis and private respondent’s payment of the difference, private respondent
demanded delivery from Norkis. For the latter’s failure to comply, private respondent
filed suit for specific performance.

Issue:
 WON there had already been a valid transfer of ownership over to the private
respondent at the time it was destroyed.

Held:
No. There was no constructive delivery upon the issuance of the Sales Invoice in
the name of the private respondent, and upon the registration of the vehicle in the
name of the private respondent.
In all forms of delivery, it is necessary that the act of delivery, whether actual or
constructive, be coupled with the intention of delivering the thing. The act, without
the intention, is insufficient.
When the motorcycle was registered in the name of private respondent, Norkis
did not intend yet to transfer the title or ownership over to Nepales, but only to
facilitate the execution of a chattel mortgage in favor of the DBP for the release of the
buyer’s motorcycle loan.

Notes:
1) The critical factor in the different modes of effecting delivery, which gives the
legal effect to the act, is the actual intention of the vendor to deliver, and its
acceptance by the vendee. Without that intention, there is no tradition. (Abuan vs.
Garcia)

19) Ayala Land Inc. vs. ASB Realty Corporation

G.R. No. 210043 September 26, 2018
Facts:
Issue:
Held:
A contract is void if one of the essential requisites of a contract under Article
1318 of the New Civil Code is lacking. Consent being one of these requisites, is vital
to the existence of a contract and “where it is wanting, the contract is non-existent.
For juridical entities, consent is given through its board of directors. Acts done by the
corporate officers beyond the scope of their authority cannot bind the corporation
unless it has ratified such acts expressly or is estopped from denying them.” There
was no authority to sell from the BOD; hence, no consent.
20) Fullido vs. Grilli
G.R. No. 215014 February 29, 2016
Facts:
Issue:
Held:
If an alien is given not only a lease of, but also an option to buy, a piece of land
by virtue of which the Filipino owner cannot sell or otherwise dispose of his property,
this, to last for 50 years, then it becomes clear that the arrangement is a virtual transfer
of ownership whereby the owner divests himself in stages not only of the right to
enjoy the land but also of the right to dispose of it – rights which constitute
ownership. Lease contract and the MOA in the present case are null and void for
virtually transferring the reigns of the land to a foreigner.

21) Melencio Domingo vs. Spouses Molina

G.R. 200274 April 20, 2016
Facts:
Issue:
Held:
The liquidation of the conjugal partnership upon death of a spouse and prohibits
any disposition or encumbrance of the conjugal property prior to the conjugal
partnership liquidation. Subsequent sale of spouse is valid as to his/her share.
Conjugal partnerships is considered dissolved upon the death of the spouse.