Sales Matrix_chapter 11 & 13

7/28/2019 Sales Matrix_chapter 11 & 13

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TITLE FACTS ISSUE HELD

AdelfaProperties, Inc.vs. CA, Rosario

Jimenez-Castaneda &

Salud JimenezJanuary 25,

1995#1

Private respondents, along w/ their brothers Jose

& Dominador, were the registered owners of a parcel ofland. Jose & Dominador sold their share consisting of of the land, specifically the eastern portion thereof, topetitioner. Subsequently, an extrajudicial partition wasexecuted among the siblings and the eastern portion wasadjudicated to Jose & Dominador, while the westernportion went to the private respondents.

Thereafter, petitioner expressed interest in buying

the western portion of the land from private respondentsand an exclusive option to purchase was executedbetween them. The agreement provided that adownpayment given by petitioner would be credited aspartial payment upon the consummation of the sale. Butin one part of the agreement, the payment wasdenominated as option money.

Before petitioner could make final payment, it

received summons filed by the nephews & nieces ofprivate respondents against Jose & Dominador, &petitioner, for annulment of the deed of sale of the

eastern portion in favor of a 3rd

party. As a consequenceof this, petitioner informed private respondents that itwould hold payment of the full of the purchase price andsuggested that the latter settle the case 1st w/ theirnephews & nieces.

Respondents refused to heed this suggestion by

petitioner and attributed the suspension of payment ofthe purchase price to lack of word of honor. Petitionerthen caused to be annotated on the title of the lot itsoption contract w/ respondents, and its contract of sale w/Jose & Dominador.

The respondents cancelled the transaction w/

petitioners & then subsequently, they executed aconditional sale of the western portion in favor ofEmylene Chua. Respondents also tried to return a part

of the option money as agreed upon. Privaterespondents filed a case for annulment of contractagainst petitioner.

TC held that the agreement entered into by the

parties was merely an option contract, & that thesuspension of payment by petitioner constituted acounter-offer, w/c therefore was tantamount to a rejectionof the option. It likewise ruled that petitioner could notvalidly suspend payment in favor of private respondentson the ground that the action filed by the latters kin didnot involve the western portion of the land but the easternportion thereof, w/c was not the one subject of thetransaction between petitioner & respondents. The TC

What was the contractentered into betweenthe parties, a K to sell,an option K, or a K of

sale?

WON there was a validsuspension of paymentof the purchase price

by petitioner & thelegal consequences

thereof.

It was a K to sell.

Not a K of sale because:

1. There was no intention to transfer ownership to petitioner exceptupon full payment of the purchase price. There was an absence ofa stipulation that petitioner was obliged to return possession or

ownership of the property as a consequence of non-payment, w/cjust means that there was no transfer to begin with. In effect, therewas an implied agreement that ownership shall not pass to thepurchaser until he has fully paid the price. Hence, it was not a K ofsale.

2. The deed of absolute sale would have been issued only upon thepayment of the balance of the purchase price.

3. It has not been shown that there was delivery of the property,actual or constructive, made to petitioner. Although after thereconstitution of the respondents title, it remained in thepossession of petitioners counsel, still, this is not equivalent to aconstructive delivery since there was really no intention onrespondents part to deliver.

Not a K to sell because:

1. The fact that the document was entitled exclusive option to

purchase is not controlling where the text thereof shows that it is aK to sell. The title of a K does not necessarily determine its truenature.

2. It is not an option K because such kind is not really a K but a mereunaccepted offer. In this case, there was already a concurrenceof petitioners offer to buy and private respondents acceptancethereof.

3. The alleged option money was actually earnest money w/c wasintended to form part of the purchase price. It was not distinct fromthe cause or consideration for the sale of the property, but was itselfa part thereof.

Art. 1478 of the CC does not require that a stipulation that

ownership will not pass to the buyer until full payment of the price beexpressly made. An implied stipulation to that effect is valid and bindingbetween the parties. A contract w/c contains this kind of stipulation is a K

to sell.

YES, the petitioner was justified in suspending payment of the

balance of the purchase price by reason of the vindicatory action filedagainst it. Although in the vindicatory action only the eastern portion of theland was included, the plaintiffs therein (nephews & nieces) were claimingto be co-owners of the entire parcel of land and not only of a portionthereof, nor did their claim pertain exclusively to the eastern halfadjudicated to Jose & Dominador. So in effect, the western part, subjectof the transaction between the parties in this case, was also included inthe vindicatory action.

Under Art. 1590, the vendee is not justified in suspending payment

if the vendor gives security for the return of the price in a proper case.

Quiroz, Ramos & Ramos Law Firm2004-2005

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then directed the cancellation of the exclusive option topurchase & declared the sale to Chua valid.

CA affirmed in toto.

However, in this case, the mere assurance made by respondents thatpetitioner did not have to worry about the case because it was pure &simple harassment is not the kind of guaranty contemplated under theexceptive clause in the article above, wherein the vendee is still bound tomake payment even w/ the existence of a vindicatory action.

However, petitioner cannot anymore compel respondents to sell

the property to it for 2 reasons:1. Petitioners failure to duly effect the consignation of the purchase

price after the disturbance had ceased;

The mere sending of a letter by the

vendee expressing the intention to pay, w/o the accompanyingpayment, is not considered a valid tender of payment. Theremust also have been a consignation of the money tenderedbecause there was an obligation to pay.

The rule is different, however, in

contracts wherein there is no obligation to pay yet (e.g. option K,legal redemption, sale w/ right to repurchase). In such cases,mere tender of payment, w/o consignation, is sufficient topreserve the exercise of the right or privilege.

2. The fact that the contract to sell had been validly rescinded byprivate respondents.

Art. 1592 of the CC w/c requiresrescission either by judicial action or by notarial act is notapplicable to a K to sell (because theres no K of sale yet w/ccould be rescinded).

Furthermore, judicial action for

rescission of a K is not necessary where the K provides forautomatic rescission in case of breach.

LuzonBrokerage Co,

Inc. vs.Maritime

Building Co,Inc. & MyersBldg Co, Inc.August 18,

1972#9

F.H. Myers sold the Luzon Brokerage to Maritime,

a/ an agreement that F.H. would indemnify Maritime forwhatever labor claims it would pay to Luzon Brokerage.

Thereafter, Maritime bought a building from Myers

Company. However, due to its lack of money in themeantime, Maritime requested a suspension of paymentsfrom Myers Company. It was turned down. But, in spiteof the refusal to the request, Maritime still went on and

suspended payments to Myers Co, basing its act on theagreement that FH Myers is indebted to it.

The K provided that title to the properties remains

w/ the vendor and shall be passed to the vendee onlyupon full payment of the purchase price.

It also provided that upon default of the vendee,

the deed of conditional sale would automatically and w/oany further formality, become null & void.

WON Maritime wasjustified in suspendingits payments to Myers

Co.

Could their compliance(in the form of offeringto deposit in trust the

missing amounts) beconsidered as

substantialperformance that is

equivalent topayment?

Was Art.1504 of theCC applicable in this

case?

WON Maritimes failureto pay constitutes amere casual breach.

NO, it was not justified for the ff reasons:

1. The claim was against the person of FH Myers, not against MyersCo, the vendor.

2. The claim was not proven to be real, and even assuming that itwas, it was already barred because no contingent claim was filedbefore the closure of the estate proceedings of FH Myers estateafter he died.

Since the non-payment was intentional and deliberate (even if it

was based on something w/c was later on proven to be not a true claim)designed to force Myers Co to grant the moratorium originally solicited andrejected, then, it was tainted w/ dolo, fraud or malice, and not merelynegligence.

NO.

A tender, to be valid, must be unconditional; and even then, a

tender alone is not a mode of extinguishing obligations, unless followed byconsignation.

Moreover, Art. 1234 of the CC w/c states that an obligation

substantiallyperformed in good faith is equivalent to payment, is notapplicable in Maritimes case since it was not in good faith.


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NO.

Article 1504 requiring demand by suit or notarial act in case the

vendor wants to rescind does not apply to a K to sell or a promise to sell,where title remains w/ the vendor until fulfillment of a positive suspensivecondition, such as full payment of the price.

NO. In K to sell, where ownership is retained by the seller and is not to

pass until the full payment of the price, such payment is a positivesuspensive condition, the failure of w/c is not a breach, casual or serious,but simply an event that prevented the obligation of the vendor to conveytitle from acquiring binding force, in accordance w/ art.1177.

To argue that it was a breach is to proceed from the assumption

that the K is one of absolute sale, where non-payment is a resolutorycondition, w/c is not the case.

UP vs. De losAngeles

September 29,1970#10

A land grant was segregated from the public

domain and given as endowment to UP. UP & ALUMCOentered into a logging agreement under w/c the latter wasgranted exclusive authority to cut, collect and removetimber from the land grant in consideration of payment toUP of royalties.

ALUMCO defaulted in payment of royalties & otherfees to UP twice, so UP informed ALUMCO that it hadrescinded the logging agreement between them. UPthen filed a complaint against ALUMCO for the collectionof the unpaid balance the latter owes it. UP alsoobtained an order for preliminary injunction restraining

ALUMCO from continuing its logging operations in theland grant.

In the meantime, before the issuance of the

preliminary injunction, UP awarded the concession toSta. Clara Lumber Co, Inc.

TC then issued orders, 1st enjoining UP from

awarding the concession to any other party, 2nd declaredUP in contempt of court & directing Sta. Clara to refrainfrom exercising logging rights.

WON UPs unilateralrescission of the

logging K was valid.

YES, it was valid because UP & ALUMCO had expressly

stipulated that upon default by the latter, UP has the right and the powerto consider the Logging Agreement as rescinded w/o the necessity of any

judicial suit.

There is nothing in the law that prohibits the parties from entering

into agreement that violation of the terms of the K would cause

cancellation thereof, even w/o court intervention. It is not alwaysnecessary for the injured party to resort to court for rescission of the K.

However, the act of a party in treating a K as cancelled or resolved

on account of infractions by the other contracting party must be madeknown to the other and is always provisional, being ever subject to scrutinyand review by the proper court.

The practical effect of such kind of a stipulation is that it transfers

to the defaulter the initiative of instituting suit, instead of the rescinder.

In fact, even w/o express provision conferring the power of

cancellation upon one contracting party, a resolution of reciprocal orsynallagmatic K may be made extrajudicially unless successfullyimpugned in court.

When can rescission be made extrajudicially?

1. When theres an express stipulation; OR

2. In reciprocal K under art. 1191.Torralba vs. Delos AngelesFebruary 14,

1980#12

PHHC entered into a conditional K to sell a parcel

of land w/ petitioner Torralba. It was stipulated in the Kthat should petitioner violate, refuse or fail to comply w/the terms & conditions of the K, or default in the paymentof 3 monthly installments, the K shall be deemedannulled and cancelled & the PHHC shall be at liberty todispose the property to any person, in the same manneras if the K has never been made.

The petitioner defaulted in his payments, as a

result, PHHC notified it in writing of the cancellation of theconditional K to sell but gave petitioner 30 days w/in w/cto revive the K by paying in cash all installments due.

WON the payment toand the acceptance of

the PHHC of theP1,000 revived the K.

WON PHHC shouldhave resorted to a

judicial decreerescinding the K to sellbefore awarding the lotto Florencia San Juan.

NO, it did not revive the K.

The deposit was made only after a judgment was rendered against

the petitioner to pay PHHC certain sums of money, and more than 90 daysafter the cancellation of the K. It was not made in compliance w/ therequirements for the revival of the K. Further, having been made after therendition of the judgment, the deposit was apparently made in partialsatisfaction of the judgment.

NO, the contract expressly provided that the K shall be deemed

annulled and cancelled & the PHHC shall be at liberty to dispose the sameto any other person upon default of the petitioner.

Hence, there was no K to rescind in court because from the


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Petitioner failed to make payment. Then, PHHC againnotified petitioner in writing of the definite annulment &cancellation of the K. TC upheld the cancellation andordered petitioner to pay PHHC the amounts it still owes.However, after this, petitioner deposited an amount ofP1,000 w/ the PHHC.

Subsequently, the BOD of PHHC adopted a

resolution awarding the disputed parcel of land torespondent Florencia San Juan, & thereafter the PHHCexecuted a deed of sale in her favor. The TC thengranted PHHCs motion for the issuance of an order ofdemolition against the petitioner.

moment petitioner defaulted in the timely payment of the installments, theK between the parties were deemed ipso facto rescinded.

Reyes vs.Hamada

May 31, 1965#4

As a result of an extrajudicial foreclosure

proceeding, certain real properties of the spousesHamada were sold at public auction on February 11,1960, and awarded to Arsenio Reyes as the highestbidder. At 10pm of February 10, 1961 (the last day ofredemption), the mortgagors delivered to the sheriffchecks covering the redemption amount, w/c paymentwas accepted by said official. Reyes, however, refusedto recognize the validity of such redemption.

Reyes then filed a case for declaration ofownership & right to possession of the said properties byreason of his purchase thereof at the auction sale.During the pendency of the case, Reyes filed a complaintfor the recovery of the rentals paid by the tenants to thedefendants Hamada, on the ground that Reyes was theone entitled to such rentals paid during & afterthe periodof redemption.

Whether the pendencyof the 1st case (for

declaration ofownership) precluded

the institution ofanother action for the

recovery of rentalsreceivable from thesame properties.

YES, the first case is a bar to the second case. Because the right

to the rentals during the period of redemption and thereafter is necessarilyincluded in the issue of the timeliness and adequacy of the redemptionmade or exercised by the mortgagors. If the redemption was valid, thenthe rentals would pertain to the mortgagors (Hamada), otherwise, it wouldgo to the purchaser (Reyes).

Sec. 30 of Rule 39: If during the period of redemption the

judgment-debtor is in possession of the property sold, he is entitled toretain it and to receive its fruits, the purchaser not being entitle to its

possession; BUT if the property is in the possession of a tenant, it is onlythen that the purchaser is entitled to receive its rents or the reasonablevalue of its use & occupation. In such a case, the purchaser isaccountable for the amount thus received to the judgment-debtor when heeffects the redemption.

Before the expiration of the 1-year period w/in w/c the judgment

debtor or mortgagor may redeem the property, the purchaser thereof is notentitled, as a matter of right, to possession of the same.

The rentals receivable from tenants, although they may be

collected by the purchaser during the redemption period, do not belong tothe latter but still pertain to the debtor or mortgagor. The rational is tosecure for the benefit of the debtor or mortgagor, the payment of theredemption amount and the consequent return to him of his properties soldat public auction.

Almeda vs.Daluro

October 5,1977#5

Daluro sold to Almeda, under a pacto de retro

sale, a parcel of land. Afterwards, Daluro redeemed theproperty from Almeda wherein the parties also agreedupon the manner in w/c they will share in the harvest ofthe standing palay crop.

It was stipulated that the parties would share 50-

50 in the harvest of the palay planted in June 1957,harvest of w/c will take place sometime in September,1957.

There was an initial harvest of the palay in

September 30, 1957, w/c was divided equally betweenthe parties. Thereafter, a second harvest of the sameplanted palay was realized, w/c Daluro appropriated onlyto themselves, not giving Almeda a share in it.

Whether the palay that

Almeda was entitled towas all that would beharvested from the

palay planted in June1957, or, only that w/cwill be harvested on

September 1957.

He is entitled to all that would be harvested from the palay that

was planted on June 1957. The phrase sometime in September 1957was not meant to limit the right of the plaintiffs to participate in the harvestof the crop planted in June.

Article 1617 of the CC is not applicable. It applies only when the

parties have not provided for their sharing arrangement w/ respect to thefruits existing at the time of redemption.


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Vda. De

Zulueta vs.OctavianoMarch 28, 1983

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Petitioner Olimpia was the registered owner of a

Riceland w/c was sold to Respondent Aurelio. It wasagreed that Aurelio would pay to a certain MaximinoGumayan an amount representing the redemption priceof the Riceland that was first sold to Maximino under apacto de retro sale. It was also agreed that upon theredemption of the land, the agreement would beconsidered for all legal purposes a deed of absolute anddefinite sale. This agreement was registered in the officeof the RD.

On a separate document, Aurelio gave the vendor,

Olimpia, the option to repurchase the property at anytimeafter May 1958 but not later that May 1960. Thisdocument, however, was not registered.

Aurelio paid the amounts agreed upon to

Maximino. However, the latter refused to deliver the CTto Aurelio for the reason that it was deposited w/ thePNB. Aurelio then caused the annotation of a notice oflis pendens in the title.

4 mos later, Aurelio again approached Maximino

for the same purpose of obtaining the CT, w/c the latter

again refused unless Aurelio would pay him the pagarereceipts representing additional sums that Olimpiaborrowed from Maximino, w/c amounts were not includedin the obligation of Olimpia assumed by Aurelio.

To avoid further trouble, Aurelio offered Olimpia

the option to repurchase the property. Olimpia did notaccept the offer alleging that she had no money at thattime to buy back the land. In fact, Olimpia evensuggested to Aurelio that he better sell the land toanybody and simply disregard the option to purchase.Relying on this, Aurelio sold the property to his brother,Isauro.

On February 1962 (about 2 yrs after the deadline

of May 1960) Olimpia desired to purchase the land.However, Isauro refused to allow repurchase of it.

Olimpia then commenced suit for recovery of ownership& possession of the subject land against Aurelio & Isauro.

TC ruled in favor of Olimpia, and ordered the

brothers to execute the sale of the property in Olimpiasfavor. It also declared Isauros CT null & void.

CA reversed and ruled that the transaction

between Olimpia & Aurelio was an absolute sale, anddeclared Isauro the lawful & absolute owner of the lot inquestion.

What was the nature ofthe transaction

between Olimpia &Aurelio, an absolutesale or a sale w/ right

to repurchase?

Could Olimpia validlyrepurchase the

property?

It was an absolute sale.

Conventional redemption takes place when the vendor reserves

the right to repurchase the thing sold, with the obligation to comply w/ theprovisions of Aft. 1616 and other stipulations w/c may have been agreedupon.

In this case, there was no reservation made by the vendor,

Olimpia, in the document embodying their transaction. The optionwas given by Aurelio and not reserved by Olimpia.

Further, it was not made in the instrument itself but was made in a

separate document.

The right of repurchase is not a right granted the vendor by the

vendee in a subsequent instrument, but is a right reserved by the vendorin the same instrumentof sale as one of the stipulations of the contract.Once the instrument of absolute sale is executed, the vendor can nolonger reserve the right to repurchase, and any right thereafter granted thevendor by the vendee in a separate instrument cannot be a right ofrepurchase but some other right like an option to buy.

Neither is the K one of equitable mortgage for there was nothing in

the document from w/c it could be inferred that the property was beingutilized as security for a debt.

Neither can the K be a pactum commissorium for such a K, w/c is

void, applies only in a K w/ a debtor-creditor relationship. As has beenstated, Olimpia was not a debtor but a vendor.

NO, for the ff. reasons:

1. Olimpia exercised the right of redemption, assuming there wassuch a right, only around 2 years after the stipulated period ofredemption.

2. Neither did Olimpia make a judicial consignation of the repurchaseprice w/in the agreed period.

In a K of sale w/ right to repurchase, the redemptioner who may

offer to make the repurchase on the option date of redemption shoulddeposit the full amount in court To effectively exercise the right torepurchase, the vendor a retro must make an actual and simultaneoustender of payment or consignation. (However, dont construe this to meanthat consignation is required in order to preserve the exercise of the right

to redeem. As stated in Adelfa Properties vs. CA, only tender of paymentis required in order to preserve this right.)


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Sales Matrix_chapter 11 & 13