DIGEST FOR SALES PART VI A & B .pdf

7/30/2019 DIGEST FOR SALES PART VI A & B .pdf

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CEBU WINLAND DEV. CORP v. ONG SIAO HUAFACTS:Cebu Winland Dev. Corp owns and are developers of a condominium called Cebu Winland Tower Condominium in Cebu. Ong Siao Hua bought two condo units and 4 parking slots from petitioner.While Cebu tower Condo was under construction, pet offered to sell to respondent condo units inpromotional prices ( pet offered 3% discount provided 30% of purchase price is paid as downpayment

and balance paid in 24 monthly installments. Respondent accepted offer and bought the two condounits and 4 parking lots.

Area per condo unit as indicated in petitioners price list is 155 sam and price per square isP22,378.95. Parking lot price is 240,000 each. Respondent paid P2,298,655 as downpayment andissued 24 postdated check in 223,430 per check for balance of the P5M purchase price. Netpurchase price is P7M. parties did not execute any written document in the transaction. Possessionwas then turned over to respondent. After purchase price was fully paid with last check, respondentrequested pet for certificate of title to evidence ownership. Pet sent to respondent documents for respondents signature for the Deed of Absolute Sale for the two condos.

Upon examination of the deed of absolute sale , respondent was distressed to find that state floor arewas only 127 sam contrary to the 155 sam written in price list. Respondent verified and discovered

that the actual area is only 110 sqm per unit. Respondent then demanded from petitioner refund of P2M for excess payments for difference in the area. Petitioner refused.

ISSUE: WON there was actual delivery of the subject matter to respondent?HELD: No. Petitioner argues that it delivered possession of the subject properties to respondent onOctober 10, 1996, hence, respondent’s action filed on August 7, 1998 has already prescribed.

Respondent, on the one hand, contends that his action has not prescribed because theprescriptive period has not begun to run as the same must be reckoned from the execution of thedeeds of sale which has not yet been done. Under the Civil Code, ownership does not pass by merestipulation but only by delivery.[22] Manresa explains, “the delivery of the thing . . . signifies thattitle has passed from the seller to the buyer."[23] According to Tolentino, the purpose of delivery isnot only for the enjoyment of the thing but also a mode of acquiring dominion and determines the

transmission of ownership, the birth of the real right. The delivery under any of the forms provided by Articles 1497 to 1505 of the Civil Code signifies that the transmission of ownership from vendor to vendee has taken place.

In the case at bar, it appears that respondent was already placed in possession of thesubject properties. However, it is crystal clear that the deeds of absolute sale were still to beexecuted by the parties upon payment of the last installment. This fact shows that ownership of thesaid properties was withheld by petitioner. Following case law, it is evident that the parties did notintend to immediately transfer ownership of the subject properties until full payment and the executionof the deeds of absolute sale.[28] Consequently, there is no “delivery” to speak of in this case sincewhat was transferred was possession only and not ownership of the subject properties.

Court ruled that the transfer of possession of the subject properties on October 10, 1996 to

respondent cannot be considered as “delivery” within the purview of Article 1543 of the Civil Code. Itfollows that since there has been no transfer of ownership of the subject properties since the deeds of absolute sale have not yet been executed by the parties, the action filed by respondent has notprescribed.

ALFREDO v. BORRAS (2003)



FACTS: The owners of the subject lot in this case were petitioner spouses, Godofredo Alfredo andCarmen Limon Alfredo. The Subject Land is covered by an OCT. Private respondents, spouses

Armando Borras and Adelia Lobaton Borras, filed a complaint for specific performance againstGodofredo and Carmen before the RTC. Armando and Adelia alleged in their complaint thatGodofredo and Carmen mortgaged the Subject Land for 7k with DBP. To pay the debt, Carmen andGodofredo sold the Subject Land to Armando and Adelia for 15k, the buyers to pay the DBP loan and

its accumulated interest, and the balance to be paid in cash to the sellers.

Armando and Adelia gave Godofredo and Carmen the money to pay the loan to DBP which signedthe release of mortgage and returned the owner’s duplicate copy of OCT to Godofredo and Carmen.

Armando and Adelia subsequently paid the balance of the purchase price of the Subject Land.Godofredo and Carmen then delivered to Adelia the owner’s duplicate copy of OCT, with thedocument of cancellation of mortgage, official receipts of realty tax payments, and tax declaration inthe name of Godofredo. Godofredo and Carmen introduced Armando and Adelia, as the new ownersof the Subject Land, to the Natanawans, the old tenants of the Subject Land. Armando and Adeliathen took possession of the Subject Land.

In January 1994, Armando and Adelia learned that hired persons had entered the Subject Land andwere cutting trees under instructions of allegedly new owners of the Subject Land. Subsequently,

Armando and Adelia discovered that Godofredo and Carmen had re-sold portions of the Subject Landto several persons. Armando and Adelia filed an adverse claim with the Register of Deeds of Bataan. Armando and Adelia discovered that Godofredo and Carmen had secured an owner’s duplicate copyof OCT after filing a petition in court for the issuance of a new copy. Armando and Adelia wroteGodofredo and Carmen complaining about their acts, but the latter did not reply. Thus, Armando and

Adelia filed a complaint for specific performance. Petitioners asserted that the Subsequent Buyerswere buyers in good faith and for value. TC: in favor of Armando and Amelia.

RTC: there was perfected contract of sale; all the elements are present (object, purchase price,manner of payment); subsequent buyers not in GF. CA: affirmed RTC

Issue: w/n there was perfected contract of sale

Held:

1. There was a perfected contract of sale. A contract is perfected once there is

consent of the contracting parties on the object certain and on the cause of the obligation. Thecontract of sale has also been consummated because the

sellers and buyers have performed their respective obligations under the contract. In a contract of sale, the seller obligates himself to transfer ownership of the determinate thing sold, and to deliver thesame, to the buyer who obligates himself to pay a price certain to the seller.

2. Ownership of the thing sold is transferred to the vendee upon its actual or constructivedelivery. Godofredo and Carmen also turned over to Amando and Amelia the documents of ownership. Armando and Amelia paid the full purchase price as evidenced by the receipt.

3. Subsequent buyers not in GF because they were aware of the lis pendens in the title. Also.The settled rules is when ownership or title passes to the buyer, the seller ceases to have any

title to transfer to any 3rd person. If the seller sells the same land to another, the 2nd buyer hwo has actual or constructive knowledge of the prior sale cannot be a registrant in good faith.

Such 2nd buyer cannot defeat the 1st buyer’s title.

SANTOS v SANTOS



FACTS: Jesus and Rosalia owned a lot with a 4-door apartment. They sold through a publicinstrument the said property to their children, Salvador and Rosa—who sold her share to Salvador aswell. Nonetheless, in spite of the sale, Rosalia remained in possession and control over the property.Jesus, Rosalia and Salvador died. Zenaida, claiming to be Salvador’s heir, demanded rent from thetenants. The other children of Jesus and Rosalia filed a case for reconveyance averring that the saleto Salvador was fictitious and done merely to accommodate him.

ISSUE: W/N the sale to Salvador was fictitious

HELD: YES. While it is true that sale through a public instrument is equivalent to delivery of the thingssold which has the effect of transferring ownership, the delivery can be rebutted by clear andconvincing evidence. The vendor’s continuous possession makes the sale dubious. Salvador never took possession of the property. He surrendered the titles to his mother after having registered thelots in his name, he never collected rentals, neither has he paid the taxes thereon. Thus, there wasno real transfer of ownership. That being the case, the action for reconveyance was imprescriptible.

2. DYJRvCA

FACTS: Perfecto and Wilfredo Dy are brothers. Wilfredo purchased a truck and a tractor, both of which were mortgaged to Libra Financing as security for a loan. Perfecto wanted to purchase the

tractor, he convinced his sister to purchase the truck. Perfecto executed a public document toevidence the sale. Libra acceded to the sale and agreed that upon the issuance and encashment of the check that they issued for the purpose, the chattels can be released. However, in a case againstWilfredo filed by Gelac Trading, the sheriff seized the tractor on levy and sold the same on publicauction, with Gelac as the highest bidder. Perfecto thus sought to recover the truck from Gelac.

ISSUE: W/N Wilfredo, as mortgagor, can sell the tractor subject of a mortgage

HELD: YES. The mortgagor (Wilfredo) had every right to sell the property subject to mortgage—evenwithout the consent of the mortgagee as long as the purchaser assumes the liability of themortgagor .

In this case, there was constructive delivery already upon the execution of the public instrument—

even if the tractor could not yet be delivered. Execution of the public instrument and mutual consentof the parties was equivalent to constructive delivery. Therefore, at the time when the sheriff leviedupon the tractor, it was no longer the property of Wilfredo. Also the clearing of the check was not acondition for the consummation of the sale but only upon the extinguishment of the mortgage.

3. ADDISON v FELIX

FACTS: Addison owned 4 parcels of land, which he sold to Felix, through public instrument. Thedown payment was made; the final installment to be paid after the issuance of the certificate of title.

Addison sued Felix to compel the latter to pay the last installment—but Felix refused and sought torescind the contract due to the absolute failure of Addison to deliver the thing sold.

ISSUE: W/N there was delivery

HELD: NO. While it is true that execution of a public instrument is tantamount to delivery of the thingsold, in order for such symbolic delivery to have the effect of tradition, the vendor should have hadcontrol over the thing and at the moment of the sale, its delivery could have been made. In this case,the ownership was disputed by the Villafuertes, who were in possession of the land. Addison evenfailed to show the land to Felix due to the hostile opposition; he also failed to have it surveyed. Thelegal fiction of delivery thus yields to reality—no delivery was ever made. Felix had every righttherefore to rescind the contract. Had there been an agreement that Felix would have to undertake toevict the Villafuertes, the result may have been different, but there is no such agreement.



DANGUILAN v IAC

FACTS: Domingo owned 2 lots, which he donated through a private instrument to Danguilan for theconsideration that the latter must take care of him for the remainder of his life and manage his burial.Domingo’s daughter, Apolonia, laid claim to the land, presenting a public document allegedlyexecuted in her favor , the purchase price being paid for by her mother . She however failed to take

possession of the said property after the execution of the deed. In fact, she moved out of the farmwhen Danguilan started to cultivate the same for as long as she was given a share from the harvests.She decided to file a case only after the deliveries of farm produce have ceased.

ISSUE: Who has a better title over the land, Danguilan or Apolonia?

HELD: DANGUILAN. At the onset, the donation in favor of Danguilan was valid even thoughembodied in a private instrument, because it was an onerous donation. The deed of sale presentedby Apolonia was also suspicious. It was only 3 years old and the consideration was paid for by her mother. Assuming that it was valid, still the presumptive delivery is overcome by the fact that shefailed to take possession of the property. Ownership, after all, is not transferred by mere stipulationbut by actual and adverse possession. She even transferred the same to Danguilan possession of thesame. She cannot have a better right in this case than Danguilan.

POWER COMMERCIAL AND INDUSTRIAL CORP. v CA

FACTS: Power Commercial Corp. entered into a contract of sale with the Quiambao spouses. Itagreed to assume the mortgages thereon. A Deed of Absolute Sale with Assumption of Mortgage wasexecuted. Power Commercial failed to settle the mortgage debt contracted by the spouses, thus itcould not undertake the proper action to evict the lessees on the lot. Power Commercial thereafter sought to rescind the contract of the sale alleging that it failed to take actual and physical possessionof the lot—which allegedly negated constructive delivery.

ISSUE: W/N there was delivery

HELD: YES. First, such a condition that the Quiambao spouses would evict the lessees therein wasnot stipulated in the contract. In fact, Power Commercial was well aware of the presence of the

tenants therein. Also in this case, Power Commercial was given control over the said lot and itendeavored to terminate the occupation of the actual tenants.

Control cannot be equated with actual possession. Power Commercial, as purchaser, agreedvoluntarily to assume the risks involved. The public instrument executed amounted to symbolicdelivery of the property sold and authorized the buyer to use the document as proof of ownership.Power Commercial was deprived of ownership only after it failed to remit the amortizations, but notdue to failure of delivery.

CHUA v CA

FACTS: Valdes-Choy is the owner of the subject matter, when she advertised the property for sale.Chua responded to the advertisement, and met up with Valdes-Choy. They agreed for the purchase

price of P10,800,000, to be paid on July 15, 1989. This was evidenced by an earnest money for P100,000, which was put on a receipt, stating that the money will be forfeited upon failure to pay onthe dat stipulated. On July 13, Valdes-Choy executed two deeds of absolute sale, first, pertaining tothe house and lot, valued at P8,000,000, and second, pertaining to the movable properties therein.The next day, Chua issued a check worth P485,000 for the purpose paying the capital gains tax. Thevalue was deducted from the balance, with an outstanding value of P10,295,000 (additional P80,000for the documentary stamp tax). Chua also showed a check worth P10,215,00 to Valdes-Choy,however, he demanded that the TCT should first be transferred to his name before paying the check.Out of anger, Valdes- Choy tore the deed of absolute sale. On the reckoning date, Valdes-Choy tried



to make a compromise with Chua, but she did not get any response. T wo days later , Chua filed anaction for specific performance, which the trial court dismissed. A week later, he filed another actionfor specific performance, where the court ruled in favor of him. On appeal, CA reversed.

ISSUE:

1. Whether the agreement was a contract of sale or contract to sell

2. Whether registration is needed to transfer ownership

RULING: It is a contract to sell. First, when the agreement was made, the earnest money is forfeitedin favor of Valdes-Choy who may then sell the land to other interested parties. This is the nature of reserving the ownership of the property, subject to the full payment of the purchase price. Second,absent of a formal deed of conveyance of the property in favor of the buyer shows that there was nointention to transfer ownership immediately. The non-fulfillment of the suspensive condition, which ispayment of the full purchase price prevents the obligation to sell from arising, where the owner retainsthe ownership over the property. Art 1482 speaks of earnest money as an evidence of a perfectedcontract of sale. However, in this case, the earnest money was paid in part consideration of a contractto sell, and therefore, art 1482 does not apply.

Delivery is effected upon execution of the sale in a public instrument. However, registration is notneeded in order to complete the deed of sale. Delivery is what transfers ownership, and notregistration in the Registry of Property. Registration is only necessary to bind third persons; it is not amode of acquiring ownership.

VIVE EAGLE LAND INC v CA

FACTS: In 1987, Spouses Flores, as owners, sold 2 parcels of land in Cubao to Tatic SquareInternational Corp for P5.7M. Tatic applied for a loan with Capital Rual Bank of Makati to finance itspurchase of the said lots, which the bank granted provided that the torrens title over the lots would beregistered under its name as collateral for the payment of the loan.

In 1988, Tatic sold these parcels of land to Vive Eagle Land Inc (VELI) for P6.3M, although the torrens

titles over the lots were still in the custody of the bank. During the same year, VELI sold one of theseparcels of land to Genuino Ice Co. Inc. for P4M. Also, a deed of assignment of rights in which VELIassigned in favor of Genuino Ice all rights and interests under the Deed of Sale executed by spousesFlores and the other Deed of Sale executed by Tatic in VELI's favor, in so far as that lot is concerned.

Flores!Tatic (2 lots)!VELI (2 lots)!Genuino Ice (1 lot)

Genuino Ice demanded that VELI pay its capital gains tax amounting to P285,000. However, VELIrefused saying that the Spouses Flores and Tobias (broker of the sale) are responsible to pay the tax.Genuino Ice filed an action for specific performance against VELI, contending that VELI failed totransfer title to and in the name of Genuino Ice, to cause the eviction of the occupants, and to pay thetax and other dues to effectuate the transfer of the title of the property. RTC ruled in favor of GenuinoIce, CA affirmed.

ISSUE: W/N VELI is obliged to pay for the expenses to transfer the title of the property to Genuino Ice

HELD: YES. Under Art. 1487 of the CC, the expenses for the registration of the sale should beshouldered by the vendor (VELI) unless there is a stipulation to the contrary. In the absence of thestipulation of the parties relating to the expenses for the registration of the sale and the transfer of thetitle to the vendee (Genuino Ice), Art. 1487 shall be applied in a supplementary manner .

Under Art. 1495 of the CC, VELI, as vendor, is obliged to transfer title over the property and deliver the same to the vendee (Genuino Ice). While Art. 1498 of the CC provides that the execution of a



notarized deed of absolute sale shall be equivalent to the delivery of the property, the same shall notapply if from the deed the contrary does not appear or cannot clearly be inferred. In this case,Genuino Ice and VELI agreed that the latter would cause the eviction of the tenants and deliver possession of the property. It is clear that at the time the petitioner executed the deed of sale in favor of Genuino Ice, there were tenants in the property. It cannot be concluded that the property wasthereby delivered to Genuino Ice.

HEIRS OF PEDRO ESCANLAR v CA

FACTS: The Heirs of Cari-an executed a Deed of Sale of Rights, Interests, and Participation over aparcel of undivided land in favor of the Heirs of Escanlar. It was stipulated that “the contract shallbecome effective only upon approval of the CFI of Negros Occidental. The Heirs of Escanlar failed topay the balance of the purchase price, but the Heirs of Cari-an never demanded payment andcontinued to accept belated payments. They later on sold their interests over the same land to theChuas and assailed the validity of the Deed of Sale they executed with the Heirs of Escanlar. Thelower courts annulled the contract for not having the approval of the court as stipulated.

ISSUE: W/N the Deed of Sale to the Heirs of Escanlar is valid

HELD: YES. There is a distinction between the validity and effectivity. Only the effectivity was made

subject to the condition. So long as all the requisites (consent, subject matter, and price) are present,as in this case, the contract is already perfected. Nonetheless, the intent of the parties clearlymanifests their intention to give efficacy to the contract. In fact, the vendors continued to acceptpayments. That being the case, the sale in favor of the Heirs of Escanlar must be preferred as it is avalid and subsisting one.

FORTUNE TOBACCO CORP V. NLRC

FACTS:

Respondents filed a complaint for illegal dismissal against their employer petitioner Fortune TObacco

Corp to NLRC praying that they be reinstated in the company with full back wages and w/o loss of seniority rights. Petitioner maintained that is had already sold its refrying plant. in due time Labor

Arbiter rendered a decision ordering the reinstatement of respondents to their former positions withfull back wages. Petitioner appealed to the decision of the Labor Arbiter to NLRC. NLRC thenmodified decision of labor arbiter in a resolution that petitioner must pay separation pay to all thosewho opt not be rehired by the new owner of the plant and must also pay back wages up to the dateplant was actually sold. Petitioner then appealed. But thus decision of NLRC became final andexecutory.

On August 28, 1990, in a hearing set up for the purpose, the petitioner was given ample time toestablish by way of competent proof the date of the actual sale of the plant and its facilities cited inthe final and executory decision of the NLRC. the petitioner filed its manifestation to which wasattached a certified copy of the "Deed of Conditional Sale" executed by and between the petitioner

and Premium Tobacco Redrying and Fluecuring Company, Inc. (PTRFC) the petitioner has taken theposition that the date of the actual sale of the plant and its facilities is October 17, 1985 and as suchthe amount stated in the computation of the research unit of the NLRC should be substantiallyreduced.

Respondents filed their "Opposition to Manifestation" with annexes showing a certification from theOffice of the Municipal Assessor of Marikina, Metro Manila, a copy of a Declaration of RealProperty and an affidavit of one of the complainants in this case alleging that there was noactual sale of the plant and its facilities to the alleged vendee. The opposition alleges, among



others, that there was no actual transfer or actual sale of the plant and its facilities in favor of the PTRFCI; that only a change in name and form has been undertaken by the petitioner; thatthe properties are still declared in the name of the petitioner; that the PTRFCI representative, acertain Mr. Angelo Ang, is the plant manager of the Vigan, Ilocos Sur plant of the petitioner;that the control, management, operation and funding of the plant are in the hands of thepetitioner notwithstanding the alleged sale; and that the computation made by the NLRC is in

order. The petitioner filed its comment/rejoinder alleging that the sale on October 17, 1985 is validand that the property remains in the name of the petitioner pending the full payment of the purchase

price agreed upon by the vendor and the vendee .

Labor Arbiter Reyes issued an order holding there was no actual sale between petitioner and PTFRCI

that the deed of conditional sale has no stated consideration and no actual sale took place.The

petitioner maintains that the plant and its facilities were sold on October 17, 1985 by virtue of theDeed of Conditional Sale, bearing the same date, executed by the petitioner and the PTRFCI. Thusput, the petitioner contends that the amount of backwages to be paid to the private respondentsshould be based on the period covering October 5 to 17, 1985. On the other hand, the privaterespondents maintain that there has been no actual sale of the plant and its facilities up to the presenttime and as such the backwages to be paid should be computed accordingly. The NLRC shares the

view of the private respondents.

ISSUE: WON There was actual sale of plant to PTFRCI?

HELD: NO Court finds that there is no actual sale of the plant and its facilities up to the present time.While the Deed of Conditional Sale was executed on October 17, 1985, it does not necessarily followthat the plant and its facilities were, ipso facto, sold on that very day.

Careful evaluation of the stipulations of the agreement will show that the petitioner has no intention totransfer ownership over the plant and its facilities to the vendee unless there is full payment of thepurchase price on the part of the latter. In fact, it is clearly stipulated that ownership over the plant andits facilities will be transferred to the vendee by way of "a final and absolute deed of sale" onlyafter such fun payment, inclusive of interest charges. The terms and conditions of the agreementspeak for themselves. At any rate, even accepting that the plant and its facilities hive been sold on aconditional basis, there can be no actual sale thereof unless the plant and its facilities areunconditionally conveyed to the PTRFCI by virtue of "a final or absolute deed of sale" in accordancewith the terms and conditions stated in the agreement between the parties.

The Solicitor General manifests that the tax records of the petitioner as well as the certification issuedby the Municipal Assessor of Marikina reveal that the plant is still registered in the name of the

petitioner. The Solicitor General points out that under these circumstances, petitioner may not validly

contend that there has been an actual sale of the plant and its facilities to the PTRFCI. Theseobservations are well-taken. The petitioner, however, correctly asserts that the award of backwagesshould be limited to cover a three-year period, and, a fortiori, any award in excess of such period isnull and void. The contention finds support in prevailing jurisprudence. A modification is, therefore, in

order. The backwages to be paid to the private respondents should not exceed a period coveringthree years, computed from October 5, 1985. Petitioner is dismissed The backwages to be paid to theprivate respondents should, however, not exceed a period covering three (3) years, computed fromOctober 5, 1985

PACIFIC VEGETABLE OIL CORP v SINGZON

FACTS:• Petitioner and respondent entered into a contract in the US whereby Singzon agreed to ship 500



tons of copra, with the agreement CIF, Pacific Coast• Singzon failed to deliver, but the parties entered into a settlement, whereby Singzon would deliver 300 tons at the same terms the contract provided that should Singzon again default, he would pay$10,000 for damages and the original contract would be revived• Singzon again failed to ship the copra, and he did not pay the fine or ship the 500 tons as originallyagreed

• Pacific filed an action to recover damages• Singzon claims that Pacific had no legal personality to sue because it is a foreign corporation

HELD:• The contract was perfected in the US by a broker and representatives of the parties payment wasmade to a bank in California and delivery undertaken through CIF, Pacific Coast• Under that arrangement, the vendor is to pay not only the cost of goods, but also the freight andinsurance expenses, and this is taken to indicate that the delivery is to be made at the port of destination• Since CIF includes both insurance and freight expenses to be paid by the seller, ordinarily, beforethe vessel arrives at the point of destination the risk of loss be for the account of the seller.

INDUSTRIAL TEXTILE MANUFACTURING COMPANY OF THE PHILIPPINES, INC.,

Petitioner vs.LPJ ENTERPRISES, INC., Respondent

FACTS:Respondent LPJ Enterprises, Inc. had a contract to supply 300,000 bags of cement per year to AtlasConsolidated Mining and Development Corporation (Atlas for short), a member of the Soriano Groupof Companies. The cement was delivered packed in kraft paper bags. Sometime in October, 1970,Cesar Campos, a Vice-President of petitioner Industrial Textile Manufacturing Company of thePhilippines (or Itemcop, for brevity), asked Lauro Panganiban, Jr., President of respondentcorporation, if he would like to cooperate in an experiment to develop plastic cement bags.Panganiban agreed because Itemcop is a sister corporation of Atlas, respondent's major client.

A few weeks later, Panganiban accompanied Paulino Ugarte, another Vice-President of Itemcop, tothe factory of respondent's supplier, Luzon Cement Corporation in Norzagaray, Bulacan, to test fifty

(50) pieces of plastic cement bags. The experiment, however, was unsuccessful. Cement dust oozedout under pressure through the small holes of the woven plastic bags and the loading platform wasfilled with dust. The second batch of plastic bags subjected to trial was likewise a failure. Although theweaving of the plastic bags was already tightened, cement dust still spilled through the gaps. Finally,with three hundred (300) "improved bags", the seepage was substantially reduced. Ugarte then askedPanganiban to send 180 bags of cement to Atlas via commercial shipping. Campos, Ugarte, and twoother officials of petitioner company followed the 180 bags to the plant of Atlas in Cebu where theyprofessed satisfaction at the performance of their own plastic bags. Campos sent Panganiban a letter proclaiming dramatic results in the experiment. Consequently, Panganiban agreed to use the plasticcement bags. Four purchase orders were thereafter issued.

Petitioner delivered the orders consecutively on January 12, February 17, March 19, and April 17,1971. Respondent, on the other hand, remitted the amounts of P1,640.00, P2,480.00. and

P13,230.00 on March 31, April 31, and May 3, 1971 respectively, thereby leaving a balance of P84,123.80. No other payments were made, thus prompting A. Soriano y Cia of petitioner's LegalDepartment to send demand letters to respondent corporation. Reiterations thereof were later sent bypetitioner's counsel. A collection suit was filed on April 11, 1973 when the demands remained unheeded.

At the trial on the merits, respondent admitted its liability for the 53,800 polypropylene lime bagscovered by the first purchase order. With respect to the second, third, and fourth purchase orders,respondent, however, denied full responsibility therefor. Respondent said that it will pay, as it did payfor, only the 15,000 plastic bags it actually used in packing cement. As for the remaining 47,000 bags,the workers of Luzon Cement strongly objected to the use thereof due to the serious health hazards



posed by the continued seepage of cement dust.The trial court rendered its decision sentencing the defendant to pay the sum of P84,123.80 with l2%interest per annum from May, 1971 plus 15% of the total obligation as attorney's fees, and the costs.Respondent corporation's appeal was upheld by the appellate court when it reversed the trial court'sdecision and dismissed the case with costs against petitioner.

ISSUE: WON respondent may be held liable for the 47,000 plastic bags which were not actually usedfor packing cement as originally intended.HELD:The conditions which allegedly govern the transaction according to respondent may not beconsidered. The trial court correctly observed that such conditions should have been distinctlyspecified in the purchase orders and respondent's failure to do so is fatal to its cause. The Courtfound that Article 1502 of the Civil Code, invoked by both parties herein, has no application at all tothis case. The provision in the Uniform Sales Act and the Uniform Commercial Code from which

Article 1502 was taken, clearly requires an express written agreement to make a sales contract either a "sale or return" or a "sale on approval".

Parol or extrinsic testimony could not be admitted for the purpose of showing that an invoice or bill of sale that was complete in every aspect and purporting to

embody a sale without condition or restriction constituted a contract of sale or return. If the purchaser desired to incorporate a stipulation securing to him the right of return, he should have done so at thetime the contract was made. On the other hand, the buyer cannot accept part and reject the rest of the goods since this falls outside the normal intent of the parties in the "on approval" situation.Therefore, the transaction between respondent and petitioner constituted an absolute sale.

Accordingly, respondent is liable for the plastic bags delivered to it by petitioner.

MENDOZA V. DAVID

FACTS:Petitioner ordered 3 sets of furniture and issued specifications to respondent for P185,650.00. A downpayment of85,650 pesos has been paid. Upon delivery, petitioner rejected it because of inferior material and quality and thereby asked for a refund. Respondent ignored it and demanded for thebalance of P100,000.00. He reclaimed the said furniture. Respondent David retrieved the saidfurniture due to non payment of the balance.Thus, petitioner’s complaint herein stands: the CA, whodismissed her case, erred since the transaction was by description or by sample (who avers that thesaid that the delivered materials were supposed to match bulk goods.)

ISSUE: WON the transaction between the parties was that of a sale by description or by sample.

HELD: Neither. The court clarified that: In a sale by sample, the standard of quality a small quantity isexhibited by the seller as a fair specimen of the bulk, which is not present and there is no opportunityto inspect or examine the same. In a sale by description, a seller’s description of the goods which ismade part of the basis of the transaction creates a warranty that the goods will conform to thatdescription.

In the present case, the sale was not considered by sample because it does not constitute anagreement to correspond with a certain pattern. There is no agreement to replicate the goods inrespondent David’s furniture store. It is also not by description because it would require the seller tobe the one who would give the description. In this case it was the buyer. Clearly, this is a “made toorder” sale.



RUDOLF LIETZ INC v CA

FACTS: Buriol previously owned a parcel of unregistered land in Palawan. In 1986, he entered intoa lease agreement with Flaviano and Tiziana Turatello and Sani (Italians) involving a hectare of hisproperty. This agreement was for a period of 25 years, renewable for another 25 years. After thepaying P10,000 downpayment, Turatello and Sani took possession of the land. However, this

agreement was only reduced into writing in 1987.

After 11 months, Buriol sold the same parcel of land (5 hec) to Rudolf Lietz Inc for P30,000. Lateron, Rudolf Lietz Inc discovered that Buriol owned only 4 hectares with one hectare covered by thelease; thus, only 3 hectares were delivered to it. Rudolf Lietz Inc instituted a complaint for theannulment of the lease against Buriol, Sani and the Turatellos before the RTC. RTC and CA ruled infavor of Buriol, Sani and Turatellos.

ISSUE: Whether the sale between Buriol and Rudolf Lietz Inc is a lump sum or unit price sale

HELD: LUMP SUM SALE. The Deed of Absolute Sale shows that the parties agreed on the purchaseprice on a predetermined area of 5 hectares within the specified boundaries and not based on aparticular rate per area. In accordance with Art. 1542, there shall be no reduction in the purchaseprice even if the area delivered to Rudolf Lietz Inc is less than that states in the contract. In the

instant case, the area within the boundaries as stated in the contract shall control over the areaagreed upon in the contract.

Documents

DIGEST FOR SALES PART VI A & B .pdf