Haystacks Cases

8/11/2019 Haystacks Cases

1/32

Haystack: Fule v. CA (GR 112212, 2 March 1998)

Posted by Berne Guerrero under(a) oas,haystacks

Fule v. CA [G.R. N. 112212. March 2, 1998.!Third division, Romero (J): 3 concur

Facts: Fr. ntonio Jacobe initia!!y mort"a"e a #$%hectare &ro&erty in Tanay, Ri'a! (covered by TT 3$*+) to the Rura!

Bank o !aminos, -a"una to secure a !oan in the amount o P#$,$$$. aid mort"a"e /as !ater orec!osed and the &ro&ertyoered or &ub!ic auction u&on his deau!t. 0n June #12, Gre"orio Fu!e, as cor&orate secretary o the bank, asked Reme!ia4ichoso and 5!ivia 6endo'a to !ook or a buyer /ho mi"ht be interested in the Tanay &ro&erty. The t/o ound one in the&erson o 7inevetch ru'. 0t so ha&&ened that in January o said year, Gre"orio Fu!e, a!so a 8e/e!er, has sho/n interest in

buyin" a &air o emera!d%cut diamond earrin"s o/ned by 4r. ru'. 4r. ru' has dec!ined Fu!e9s oer to buy said 8e/e!ryor P#$$,$$$ and a subse;uent bid by Fu!e to buy them or ,$$$ at =# to P+ /hi!e makin" a sketch o said 8e/e!rydurin" an ins&ection at the !obby o Prudentia! Bank (the !atter instance /as dec!ined, since the e?chan"e rate a&&reciatedto P#1 &er do!!ar). ubse;uent!y, ho/ever, ne"otiations or the barter o the 8e/e!ry and the Tanay &ro&erty ensued. tty.Be!armino /as re;uested by 4r. ru' to check the &ro&erty and ound out that no sa!e or barter /as easib!e as the #%year&eriod o redem&tion has not e?&ired. 0n an eort to cut throu"h any !e"a! im&ediment, Fu!e e?ecuted on #1 5ctober#12, a deed o redem&tion on beha! o Fr. Jacobe &ur&orted!y in the amount o P#+,12*.*2, and on even date, Fr. Jacobeso!d the &ro&erty to Fu!e or P*+,$$$.$$. The haste /ith /hich the t/o deeds /ere e?ecuted is sho/n by the act that thedeed o sa!e /as notari'ed ahead o the deed o redem&tion. s 4r. ru' had a!ready a"reed to the &ro&osed barter, Fu!e

/ent to Prudentia! Bank to take a !ook at the 8e/e!ry.

5n 3 5ctober #12, Fu!e met tty. Be!armino at the !atter9s residence to &re&are the documents o sa!e. tty. Be!arminoaccordin"!y caused the &re&aration o a deed o abso!ute sa!e /hi!e Fu!e and 4r. ru' attended to the saekee&in" o the

8e/e!ry. The o!!o/in" day, Fu!e, to"ether /ith 4ichoso and 6endo'a, arrived at the residence o tty. Be!armino to ina!!ye?ecute a deed o abso!ute sa!e. Fu!e si"ned the deed and "ave tty. Be!armino the amount o P#3,*$$.$$ or necessarye?&enses in the transer o tit!e over the Tanay &ro&erty and issued a certiication to the eect that the actua!consideration o the sa!e /as P$$,$$$.$$ and not P2$,$$$.$$ as indicated in the deed o abso!ute sa!e (the dis&arity&ur&orted!y aimed at minimi'in" the amount o the ca&ita! "ains ta? that Fu!e /ou!d have to shou!der). ince the 8e/e!ry

/as a&&raised on!y at P#>$,$$$.$$, the &arties a"reed that the ba!ance o P$,$$$.$$ /ou!d 8ust be &aid !ater in cash.Thereater, at the bank, as &re%arran"ed, 4r. ru' and the cashier o&ened the saety de&osit bo?, and de!ivered thecontents thereo to Fu!e. Fu!e ins&ected the 8e/e!ry, near the e!ectric !i"ht at the bank9s !obby, or #$%#+ minutes. Fu!ee?&ressed his satisaction by noddin" his head /hen asked by 4r. ru' i the 8e/e!ry /as okay. For services rendered, Fu!e&aid the a"ents, 4ichoso and 6endo'a, the amount o


2/32

The u&reme ourt airmed in toto the decision o the ourt o &&ea!s, but ordered 4r. ru' to &ay Fu!e the ba!ance othe &urchase &rice o P$,$$$ /ithin #$ days rom the ina!ity o the decision /ith costs a"ainst &etitioner.

1. Ne" #actual $ssues ca%%t &e e'a$%e as $t u%uly tra%sce%s the l$$ts # the *u+ree Curtsrev$e" +"erThe u&reme ourt cannot entertain a actua! issue, and thus e?amine and /ei"h ane/ the acts re"ardin" the"enuineness o the earrin"s bartered in e?chan"e or the Tanay &ro&erty, as this /ou!d undu!y transcend the !imits o theourt9s revie/ &o/er in &etitions o this nature /hich are conined mere!y to &ure ;uestions o !a/. s a "enera! ru!e, theu&reme ourt accords conc!usiveness to a !o/er court9s indin"s o act un!ess it is sho/n, inter a!ia, that: (#) theconc!usion is a indin" "rounded on s&ecu!ations, surmises or con8ectures () the inerence is maniest!y mistaken,absurd and im&ossib!e (3) /hen there is a "rave abuse o discretion () /hen the 8ud"ment is based on amisa&&rehension o acts (+) /hen the indin"s o act are con!ictin" and (>) /hen the ourt o &&ea!s, in makin" itsindin"s, /ent beyond the issues o the case and the same is contrary to the admission o both &arties. To reiterate, theu&reme ourt9s 8urisdiction is on!y !imited to revie/in" errors o !a/ in the absence o any sho/in" that the indin"scom&!ained o are tota!!y devoid o su&&ort in the record or that they are "!arin"!y erroneous as to constitute serious abuseo discretion.

2. -e$ate re%$t$% # ec$s$% %t a%alus7o &roo has been adduced that Jud"e Jarami!!o /as motivated by a ma!icious or sinister intent in dis&osin" o the case

/ith dis&atch. 7either is there &roo that someone e!se /rote the decision or him. The immediate rendition o thedecision /as no more than Jud"e Jarami!!o9s com&!iance /ith his duty as a 8ud"e to Adis&ose o the court9s business&rom&t!y and decide cases /ithin the re;uired &eriods. The t/o%year &eriod /ithin /hich Jud"e Jarami!!o hand!ed thecase &rovided him /ith a!! the time to study it and even /rite do/n its acts as soon as these /ere &resented to court. 0nact, the u&reme ourt does not see anythin" /ron" in the &ractice o /ritin" a decision days beore the schedu!ed&romu!"ation o 8ud"ment and !eavin" the dis&ositive &ortion or ty&in" at a time c!ose to the date o &romu!"ation,&rovided that no ma!ice or any /ron"u! conduct attends its ado&tion. The &ractice serves the dua! &ur&oses osae"uardin" the conidentia!ity o drat decisions and renderin" decisions /ith &rom&tness. 7either can Jud"e Jarami!!o

be made administrative!y ans/erab!e or the immediate rendition o the decision. The acts o a 8ud"e /hich &ertain to his8udicia! unctions are not sub8ect to disci&!inary &o/er un!ess they are committed /ith raud, dishonesty, corru&tion orbad aith. @ence, in the absence o suicient &roo to the contrary, Jud"e Jarami!!o is &resumed to have &erormed his 8obin accordance /ith !a/ and shou!d instead be commended or his c!ose attention to duty.

. C%tract +er#ecte &y ere c%se%t, &$%s +art$es t st$+ulat$% a% all the c%se/ue%ces0 C%tract# sale +er#ecte u+% eet$% # $%s u+% the th$% &ect # the c%tract a% u+% +r$ce03&$e%t # c%tract $% +u&l$c $%strue%t %ly #r c%ve%$e%ce, a% re$strat$% %ly t a##ect th$r+art$es0 4ack # #ral re/u$ree%ts es %t $%val$ate the c%tract

The ivi! ode &rovides that contracts are &erected by mere consent. From this moment, the &arties are bound not on!y tothe u!i!!ment o /hat has been e?&ress!y sti&u!ated but a!so to a!! the conse;uences /hich, accordin" to their nature, may

be in kee&in" /ith "ood aith, usa"e and !a/. contract o sa!e is &erected at the moment there is a meetin" o the mindsu&on the thin" /hich is the ob8ect o the contract and u&on the &rice. Bein" consensua!, a contract o sa!e has the orce o!a/ bet/een the contractin" &arties and they are e?&ected to abide in "ood aith by their res&ective contractua!commitments.

rtic!e #3+2 o the ivi! ode /hich re;uires the embodiment o certain contracts in a &ub!ic instrument, is on!y orconvenience, and re"istration o the instrument on!y adverse!y aects third &arties. Forma! re;uirements are, thereore,or the beneit o third &arties. 7on%com&!iance there/ith does not adverse!y aect the va!idity o the contract nor thecontractua! ri"hts and ob!i"ations o the &arties thereunder.

5. 6$a&le r a%%ulla&le c%tractsontracts that are voidab!e or annu!!ab!e, even thou"h there may have been no dama"e to the contractin" &arties are: (#)

those /here one o the &arties is inca&ab!e o "ivin" consent to a contract and () those /here the consent is vitiated bymistake, vio!ence, intimidation, undue in!uence or raud. The contract can be voided in accordance /ith !a/ so as tocom&e! the &arties to restore to each other the thin"s that have been the sub8ect o the contract /ith their ruits, and the&rice /ith interest.

7. Frau0 N $%ucee%t ae &y the +r$vate res+%e%tsThere is raud /hen, throu"h the insidious /ords or machinations o one o the contractin" &arties, the other is induced toenter into a contract /hich, /ithout them, he /ou!d not have a"reed to. 0n the &resent case, the records, are bare o anyevidence maniestin" that &rivate res&ondents em&!oyed such insidious /ords or machinations to entice &etitioner intoenterin" the contract o barter. 7either is there any evidence sho/in" that 4r. ru' induced &etitioner to se!! his Tanay&ro&erty or that she ca8o!ed him to take the earrin"s in e?chan"e or said &ro&erty. 5n the contrary, 4r. ru' did notinitia!!y accede to &etitioner9s &ro&osa! to buy the said 8e/e!ry. Rather, it a&&ears that it /as &etitioner, throu"h his a"ents

/ho !ed 4r. ru' to be!ieve that the Tanay &ro&erty /as /orth e?chan"in" or her 8e/e!ry as he re&resented that its va!ue


3/32

/as P$$,$$$.$$ or more than doub!e that o the 8e/e!ry /hich /as va!ued on!y at P#>$,$$$.$$. 0 indeed &etitioner9s&ro&erty /as tru!y /orth that much, it /as certain!y contrary to the nature o a businessman%banker !ike him to have&arted /ith his rea! estate or ha! its &rice. 0n short, it /as in act &etitioner /ho resorted to machinations to convince 4r.ru' to e?chan"e her 8e/e!ry or the Tanay &ro&erty.

. M$stake0 M$stake cause &y a%$#est %el$e%ce ca%%t $%val$ate a u$c$al actTo inva!idate a contract, mistake must Areer to the substance o the thin" that is the ob8ect o the contract, or to thoseconditions /hich have &rinci&a!!y moved one or both &arties to enter into the contract. n e?am&!e o mistake as to theob8ect o the contract is the substitution o a s&eciic thin" contem&!ated by the &arties /ith another. 0n the &resent case,the &etitioner ai!ed to &rove the act that &rior to the de!ivery o the 8e/e!ry to him, &rivate res&ondents endeavored tomake such substitution o an inerior one or one /ith Russian diamonds or the 8e/e!ry he /anted to e?chan"e /ith his#$%hectare !and. Further, on account o his /ork as a banker%8e/e!er, it can be ri"htu!!y assumed that he /as an e?&ert onmatters re"ardin" "ems. @e had the inte!!ectua! ca&acity and the business acumen as a banker to take &recautionarymeasures to avert such a mistake, considerin" the va!ue o both the 8e/e!ry and his !and. mistake caused by maniestne"!i"ence cannot inva!idate a 8uridica! act. s the ivi! ode &rovides, A(t)here is no mistake i the &arty a!!e"in" it kne/the doubt, contin"ency or risk aectin" the ob8ect o the contract.

8. C%tract # sale a&slute $# % st$+ulat$% that t$tle t +r+erty $s reserve t seller u%t$l #ull +aye%t0"%ersh$+ tra%s#erre u+% actual r c%struct$ve el$very

contract o sa!e bein" abso!ute in nature, tit!e &assed to the vendee u&on de!ivery o the thin" so!d since there /as nosti&u!ation in the contract that tit!e to the &ro&erty so!d has been reserved in the se!!er unti! u!! &ayment o the &rice orthat the vendor has the ri"ht to uni!atera!!y reso!ve the contract the moment the buyer ai!s to &ay /ithin a i?ed &eriod.uch sti&u!ations are not maniest in the contract o sa!e. 0n the &resent case, both the tria! and a&&e!!ate courts, thereore,correct!y ru!ed that there /ere no !e"a! bases or the nu!!iication o the contract o sa!e. 5/nershi& over the &arce! o !andand the &air o emera!d%cut diamond earrin"s had been transerred to 4r. ru' and Fu!e, res&ective!y, u&on the actua! andconstructive de!ivery thereo.

9. C%tract s$le%t "he% &ala%ce $s ue a% ea%a&le0 %%+aye%t es %t $%val$ate the c%tractChi!e it is true that the amount o P$,$$$.$$ ormin" &art o the consideration /as sti!! &ayab!e to Fu!e, its non&aymentby 4r. ru' is not a suicient cause to inva!idate the contract or bar the transer o o/nershi& and &ossession o the thin"se?chan"ed considerin" the act that their contract is si!ent as to /hen it becomes due and demandab!e.

1; N $%terest ue $# $t $s %t st$+ulateFai!ure to &ay the ba!ance o the &urchase &rice does not resu!t in the &ayment o interest thereon. rtic!e #+21 o the ivi!ode &rescribes the &ayment o interest by the vendee Aor the &eriod bet/een the de!ivery o the thin" and the &ayment othe &rice in cases A(#) hou!d it have been so sti&u!ated () hou!d the thin" so!d and de!ivered &roduce ruits or income(3) hou!d he be in deau!t, rom the time o 8udicia! or e?tra8udicia! demand or the &ayment o the &rice.

11. Case $st$%u$she #r e la Cru< v 4eas+$The &resent case shou!d be distin"uished rom 4e !a ru' v. -e"as&i, /here the court he!d that ai!ure to &ay theconsideration ater the notari'ation o the contract as &revious!y &romised resu!ted in the vendee9s !iabi!ity or &ayment ointerest. 0n the &resent, there is no sti&u!ation or the &ayment o interest in the contract o sa!e nor &roo that the Tanay&ro&erty &roduced ruits or income. 7either did &etitioner demand &ayment o the &rice as in act he i!ed an action tonu!!iy the contract o sa!e.

12 A"ar # ral a% e'e+lary aaes6ora! and e?em&!ary dama"es may be a/arded /ithout &roo o &ecuniary !oss. 0n a/ardin" such dama"es, the courtsha!! take into account the circumstances obtainin" in the case and assess dama"es accordin" to its discretion. To /arrantthe a/ard o dama"es, it must be sho/n that the &erson to /hom these are a/arded has sustained in8ury. @e must!ike/ise estab!ish suicient data u&on /hich the court can &ro&er!y base its estimate o the amount o dama"es.tatements o acts shou!d estab!ish such data rather than mere conc!usions or o&inions o /itnesses. Thus, or mora!dama"es to be a/arded, it is essentia! that the c!aimant must have satisactori!y &roved durin" the tria! the e?istence o theactua! basis o the dama"es and its causa! connection /ith the adverse &arty9s acts. 0 the court has no &roo or evidenceu&on /hich the c!aim or mora! dama"es cou!d be based, such indemnity cou!d not be outri"ht!y a/arded. The same ho!dstrue /ith res&ect to the a/ard o e?em&!ary dama"es /here it must be sho/n that the &arty acted in a /anton, o&&ressiveor ma!evo!ent manner.

1. Rule that ral aaes ca%%t &e recvere #r +ers% "h #$le a c+la$%t es %t a++ly $%+rese%t case

Chi!e, as a ru!e, mora! dama"es cannot be recovered rom a &erson /ho has i!ed a com&!aint a"ainst another in "oodaith because it is not sound &o!icy to &!ace a &ena!ty on the ri"ht to !iti"ate, the same, ho/ever, cannot a&&!y in the


4/32

&resent case. This is not a situation /here &etitioner9s com&!aint /as sim&!y ound !ater to be based on an erroneous"round /hich, under sett!ed 8uris&rudence, /ou!d not have been a reason or a/ardin" mora! and e?em&!ary dama"es.0nstead, the cause o action o the instant case a&&ears to have been contrived by &etitioner himse!. The actua! indin"s othe courts a ;uo to the eect that &etitioner i!ed this case because he /as the victim o raud that he cou!d not have beensuch a victim because he shou!d have e?amined the 8e/e!ry in ;uestion beore acce&tin" de!ivery thereo, considerin" hise?&osure to the bankin" and 8e/e!ry businesses and that he i!ed the action or the nu!!iication o the contract o sa!e /ithunc!ean hands, a!! deserve u!! aith and credit to su&&ort the conc!usion that &etitioner /as motivated more by i!! /i!!than a sincere attem&t to &rotect his ri"hts in commencin" suit a"ainst res&ondents. 0t must be noted that beore&etitioner /as ab!e to convince 4r. ru' to e?chan"e her 8e/e!ry or the Tanay &ro&erty, &etitioner took &ains tothorou"h!y e?amine said 8e/e!ry, even "oin" to the e?tent o sketchin" their a&&earance. Chy at the &recise moment /hen

he /as about to take &hysica! &ossession thereo he ai!ed to e?ert e?tra eorts to check their "enuineness des&ite the !ar"econsideration invo!ved has never been e?&!ained at a!! by &etitioner. @is acts thus ai!ed to accord /ith /hat an ordinary&rudent man /ou!d have done in the same situation.

Haystack: =al$% vs. CA (GR 89;, 28 Fe&ruary 199;)


=al$% vs. CA [G.R. N. 89;. Fe&ruary 28, 199;.!First 4ivision, 6edia!dea (J): 3 concur

Facts:5n 2 6ay #1*3, Ru&erto abesa8e Jr. sued to recover o/nershi& o a &arce! o !and (!ocated at Panya/an, o"od,outhern -eyte TT ###2, /ith an area o 21* s;.ms., assessed at P#2$), based on a &rivate document o abso!ute sa!e,dated # Ju!y #1>+, a!!e"ed!y e?ecuted by e"undo 4a!ion, /ho, ho/ever denied the act o sa!e, contendin" that thedocument sued u&on is ictitious, his si"nature thereon, a or"ery, and that sub8ect !and is con8u"a! &ro&erty, /hich he andhis /ie (D&iania abesa8e%4a!ion) ac;uired in #1>$ rom aturnina abesa8e as evidenced by the ADscritura de Eenta

bso!uta. The s&ouses denied c!aims o abesa8e that ater e?ecutin" a deed o sa!e over the &arce! o !and, they had&!eaded /ith abesa8e, their re!ative, to be a!!o/ed to administer the !and because 4a!ion did not have any means o!ive!ihood. They admitted, ho/ever, administerin" since #1+2, + &arce!s o !and in o"od, outhern -eyte, /hich be!on"edto -eonardo abesa8e, "randather o abesa8e, /ho died in #1+>. They never received their a"reed #$ and #+ commission on the sa!es o co&ra and abaca, res&ective!y. abesa8e9s suit, they countered, /as intended mere!y to harass,&reem&t and oresta!! 4a!ion9s threat to sue or these un&aid commissions. The tria! court rendered its decision on #*January #12, orderin" 4a!ion to de!iver to abesa8e the &arce! o !and sub8ect o the case and to e?ecute thecorres&ondin" orma! deed o conveyance in a &ub!ic document in avor o abesa8e (or in case o deau!t, the deed sha!! bee?ecuted in their beha! by the Provincia! heri or his de&uty), orderin" 4a!ion to &ay abesa8e the amount o P,$$$ asattorney ees and P+$$ as !iti"ation ees, and to &ay the costs.

From the adverse decision o the tria! court, 4a!ion a&&ea!ed, assi"nin" errors some o /hich, ho/ever, /ere disre"ardedby the a&&e!!ate court, not havin" been raised in the tria! court. 5n > 6ay #12*, the ourt o &&ea!s airmed in toto theru!in" o the tria! court, u&ho!din" the va!idity o the sa!e o a &arce! o !and by e"undo 4a!ion in avor o Ru&ertoabesa8e, Jr. @ence, the &etition.

The u&reme ourt denied the &etition, and airmed the decision o the ourt o &&ea!s u&ho!din" the ru!in" o the tria!court /ithout costs.

1. A$ss$&$l$ty # a +r$vate "r$t$%ection #, Ru!e #3 o the Ru!es o ourt (Private /ritin", its e?ecution and authenticity, ho/ &roved) &rovides that

ABeore any &rivate /ritin" may be received in evidence, its due e?ecution and authenticity must be &roved either: (a) Byanyone /ho sa/ the /ritin" e?ecuted (b) By evidence o the "enuineness o the hand/ritin" o the maker or (c) By asubscribin" /itness.

2. >r# # Ha%"r$t$%ection 3, Ru!e #3 o the Ru!es o ourt (@and/ritin", ho/ &roved.) &rovides that AThe hand/ritin" o a &erson may be&roved by any /itness /ho be!ieves it to be the hand/ritin" o such &erson, and has seen the &erson /rite, or has seen

/ritin" &ur&ortin" to be his u&on /hich the /itness has acted or been char"ed, and has thus ac;uired kno/!ed"e o thehand/ritin" o such &erson. Dvidence res&ectin" the hand/ritin" may a!so be "iven by a com&arison, made by the /itnessor the court, /ith /ritin"s admitted or treated as "enuine by the &arty a"ainst /hom the evidence is oered, or &roved to

be "enuine to the satisaction o the 8ud"e.
http://berneguerrero.co-ph.com/2003/09/04/haystack-dalion-vs-ca-gr-78903-28-february-1990/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/haystacks/http://berneguerrero.co-ph.com/category/a-oas/haystacks/http://berneguerrero.co-ph.com/2003/09/04/haystack-dalion-vs-ca-gr-78903-28-february-1990/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/haystacks/


5/32

. 3ach +arty ust +rve h$s "% a##$rat$ve alleat$%s"ainst 4a!ion9s mere denia! that he si"ned the document, the &ositive testimonies o the instrumenta! /itnesses 5"soc(the one /ho &re&ared the deed) and Ds&ina, aside rom the testimony o abesa8e, must &revai!. 4a!ion has airmative!ya!!e"ed or"ery, but he never &resented any /itness or evidence to &rove his c!aim o or"ery. Dach &arty must &rove hiso/n airmative a!!e"ations (ection #, Ru!e #3#, Ru!es o ourt).

5. Frery %t +resue0 >resu+t$% # $%%ce%ce0t is &resumed that a &erson is innocent o a crime or /ron" (ection + (a), idem), and deense shou!d have come or/ard

/ith c!ear and convincin" evidence to sho/ that abesa8e committed or"ery or caused said or"ery to be committed, toovercome the &resum&tion o innocence. 6ere denia! o havin" si"ned does not suice to sho/ or"ery.

7. Frer "ul atte+t t #re a% u%%ecessary s$%atureT/o si"natures o e"undo 4. 4a!ion a&&ear on the ace o the ;uestioned document, one at the ri"ht corner bottom o thedocument and the other at the !et hand mar"in thereo. The second si"nature is a!ready a sur&!usa"e. or"er /ou!d notattem&t to or"e another si"nature, an unnecessary one, or ear he may commit a revea!in" error or an erroneous stroke.

?. C%clus$%s a% #$%$%s # #act &y tr$al curt e%t$tle t reat "e$ht % a++eal&&e!!ate courts have consistent!y subscribed to the &rinci&!e that conc!usions and indin"s o act by the tria! courts areentit!ed to "reat /ei"ht on a&&ea! and shou!d not be disturbed un!ess or stron" and co"ent reasons, since it is undeniab!ethat the tria! court is in a more advanta"eous &osition to e?amine rea! evidence, as /e!! as to observe the demeanor o the

/itnesses /hi!e testiyin" in the case (hase v. Buencamino, r., G.R. 7o. -%$31+, 6ay #3, #12+, #3> R 3>+ Prin" v.ourt o &&ea!s, G.R. 7o. -%#>$+, u"ust #1, #12+, #32 R #2+)

. Art$cle 178 #r c%ve%$e%ce, %t #r val$$ty r e%#rcea&$l$tyThe &rovision o rtic!e #3+2 on the necessity o a &ub!ic document (i.e. Aacts and contracts /hich have or their ob8ect thecreation, transmission, modiication or e?tinction o rea! ri"hts over immovab!e &ro&erty must a&&ear in a &ub!icinstrument) is on!y or convenience, not or va!idity or enorceabi!ity. 0t is not a re;uirement or the va!idity o a contracto sa!e o a &arce! o !and that this be embodied in a &ub!ic instrument.

8. C%tract # sale $s c%se%sual contract o sa!e is a consensua! contract, /hich means that the sa!e is &erected by mere consent. 7o &articu!ar orm isre;uired or its va!idity.


6/32

Facts: 5n # 6ay #1*>, Phi!i&&ine Remnants o., 0nc. constituted the Bank o the Phi!i&&ine 0s!ands (BP0) as its trusteeto mana"e, administer, and se!! its rea! estate &ro&erty. 5ne such &iece o &ro&erty &!aced under trust /as the dis&uted !ot,a 33,$+>%s;.ms. !ot at Barrio Ba"on" 0!o", Pasi" (TT 13#). 5n 3 June #122, Pedro Revi!!a, Jr., a !icensed rea! estate

broker /as "iven orma! authority by BP0 to se!! the !ot or P#,$$$.$$ &er s;.m. This arran"ement /as concurred in by theo/ners o the Phi!i&&ine Remnants. Broker Revi!!a contacted !onso -im o -imketkai ons 6i!!in" (-6) /ho a"reed to

buy the !and. 5n 2 Ju!y #122, -69s oicia!s and Revi!!a /ere "iven &ermission to enter and vie/ the &ro&erty they /erebuyin" (by Ro!ando E. romin, BP0 ssistant Eice%President). 5n 1 Ju!y #122, Revi!!a orma!!y inormed BP0 that he had&rocured a buyer, -6. 5n ## Ju!y #122, -69s oicia!s, !onso -im and !bino -imketkai, /ent to BP0 to conirm thesa!e. They /ere entertained by Eice%President 6er!in !bano and sst. Eice%President romin. -6 asked that the &riceo P#,$$$.$$ &er s;.m. be reduced to P1$$.$$ /hi!e !bano stated the &rice to be P#,#$$.$$. The &arties ina!!y a"reed

that the !ot /ou!d be so!d at P#,$$$.$$ &er s;.m. to be &aid in cash. ince the authority to se!! /as on a irst come, irstserved and non%e?c!usive basis, it may be mentioned at this 8uncture that there is no dis&ute over -69s bein" the irstcomer and the buyer to be irst served. 7ot/ithstandin" the ina! a"reement to &ay P#,$$$.$$ &er s;.m. on a cash basis,

!onso -im asked i it /as &ossib!e to &ay on terms. The bank oicia!s stated that there /as no harm in tryin" to ask or&ayment on terms because in &revious transactions, the same had been a!!o/ed. 0t /as the understandin", ho/ever, thatshou!d the term &ayment be disa&&roved, then the &rice sha!! be &aid in cash. 0t /as !bano /ho dictated the terms under

/hich the insta!!ment &ayment may be a&&roved, and actin" thereon, !onso -im, on the same date, ## Ju!y #122, /roteBP0 throu"h 6er!in !bano embodyin" the &ayment initia!!y o #$ and the remainin" 1$ /ithin a &eriod o 1$ days. or 3 days !ater, -6 !earned that its oer to &ay on terms had been ro'en. !onso -im /ent to BP0 on #2 Ju!y #122 andtendered the u!! &ayment o P33,$+>,$$$.$$ to !bano. The &ayment /as reused because !bano stated that theauthority to se!! that &articu!ar &iece o &ro&erty in Pasi" had been /ithdra/n rom his unit. The same check /as tenderedto BP0 Eice%President 7e!son Bona /ho a!so reused to receive &ayment.

n action or s&eciic &erormance /ith dama"es /as thereu&on i!ed on + u"ust #122 by -6 a"ainst BP0 /ith the RTPasi" (Branch #+#). 0n the course o the tria!, BP0 inormed the tria! court that it had so!d the &ro&erty under !iti"ation to7ationa! Book tore (7B) on # Ju!y #121. The com&!aint /as thus amended to inc!ude 7B. 5n #$ June #11#, the tria!court rendered 8ud"ment in avor o -6 ho!din" that there /as a &erected contract bet/een -6 and BP0, and thusdec!ared the 4eed o a!e invo!vin" the !ot in Pasi" in the name o BP0 and in avor o 7B as nu!! and void ordered theRe"ister o 4eeds o the Province o Ri'a! to cance! the TT /hich may have been issued in avor o 7B by virtue o thesaid deed ordered BP0 u&on recei&t by it rom -6 o the sum o P33,$+>,$$$,$$ to e?ecute a 4eed o a!e in avor o the!atter o the said &ro&erty at the &rice o P#,$$$.$$ &er s;.m. and in deau!t thereo, the !erk o ourt is directed toe?ecute the deed dated # Ju!y #121 ordered the Re"ister o 4eeds o Pasi", u&on re"istration o the said deed, /hethere?ecuted by BP0 or the !erk o ourt and &ayment o the corres&ondin" ees and char"es, to cance! said TT 13# andto issue, in !ieu thereo, another transer certiicate o tit!e in the name o -6 ordered BP0 and 7B to &ay in so!idum to-6 the sums o P#$,$$$,$$$.$$ as actua! and conse;uentia! dama"es and P#+$,$$$.$$ as attorney9s ees and !iti"atione?&enses, both /ith interest at # &er annum rom date o 8ud"ment on the cross%c!aim by the bank a"ainst 7B,

ordered 7B to indemniy the bank o /hatever BP0 sha!! have &aid to -6 dismissed the counterc!aim o both BP0 and7B a"ainst -6 and the cross%c!aim o 7B a"ainst BP0 /ith costs a"ainst BP0 and 7B.


7/32

/hose &recise 8ob in the Bank /as to mana"e and administer rea! estate &ro&erty. Ro!ando romin /as BP0 ssistantEice%President and Trust 5icer. @e direct!y su&ervised the BP0 Rea! Pro&erty 6ana"ement


8/32

o the essentia! e!ements thereo. contract /hich is consensua! as to &erection is so estab!ished u&on a mere meetin" ominds, i.e., the concurrence o oer and acce&tance, on the ob8ect and on the cause thereo. contract /hich re;uires, inaddition to the above, the de!ivery o the ob8ect o the a"reement, as in a &!ed"e or commodatum, is common!y reerred toas a rea! contract. 0n a so!emn contract, com&!iance /ith certain orma!ities &rescribed by !a/, such as in a donation orea! &ro&erty, is essentia! in order to make the act va!id, the &rescribed orm bein" thereby an essentia! e!ement thereo.The sta"e o consummation be"ins /hen the &arties &erorm their res&ective undertakin"s under the contract cu!minatin"in the e?tin"uishment thereo.

8. A% Bu Asu%c$%0 >er#ecte c%tract # saleI) it /as he!d that contracts inrin"in" the tatute o Frauds are ratiied /hen thedeense ai!s to ob8ect, or asks ;uestions on cross%e?amination. The reason or the ru!e is that Ai the ans/ers o those

/itnesses /ere stricken out, the cross%e?amination cou!d have no ob8ect /hatsoever and i the ;uestions /ere &ut to the/itnesses and ans/ered by them, they cou!d on!y be taken into account by connectin" them /ith the ans/ers "iven bythose /itnesses on direct e?amination.


9/32

or res&ondents cross%e?amined &etitioner9s /itnesses at !en"th on the contract itse!, the &urchase &rice, the tender ocash &ayment, the authority o romin and Revi!!a, and other detai!s o the !iti"ated contract.

17. r$tte% %te r era%u a% e'ce+t$% t the u%e%#rcea&$l$ty # c%tracts +ursua%t t *tatute# Fraus+3%>+). The note or memorandum re;uired by the statute o rauds need not becontained in a sin"!e document, nor, /hen contained in t/o or more &a&ers, need each &a&er be suicient as to contentsand si"nature to satisy the statute. T/o or more /ritin"s &ro&er!y connected may be considered to"ether, matters missin"or uncertain in one may be su&&!ied or rendered certain by another, and their suiciency /i!! de&end on /hether, takento"ether, they meet the re;uirements o the statute as to contents and the re;uirements o the statutes as to si"nature.

1. =eea%r # "$t%esses as #actr #r Curt t $%cl$%e t the vers$% # the case &y %e +artyThe demeanor o the /itnesses the &arties &resented is one im&ortant actor that inc!ined the tria! court to be!ieve in the

version "iven by -6 because its /itnesses, inc!udin" hosti!e /itness Ro!and E. romin, an assistant vice%&resident o thebank, /ere strai"ht or/ard, candid and unhesitatin" in "ivin" their res&ective testimonies.


10/32

situations /here raud is maniested. 5ne enumeration in a #1# decision cannot &ossib!y cover a!! indications o raudrom that time u& to the &resent and into the uture.

21. =aaes0 4ss # +r#$ts a% use # la% c+e%sate &y a++rec$at$% $% la% valueThe &roits and the use o the !and /hich /ere denied to -6 because o the non%com&!iance or intererence /ith aso!emn ob!i"ation by BP0 and 7B is someho/ made u& by the a&&reciation in !and va!ues.

Haystack: yta *ha" v. CA (GR 11??7;, 2 May 1997)


yta *ha" v. CA [G.R. N. 11??7;. May 2, 1997.!First 4ivision, 4avide Jr (J): 3 concur, # on !eave

Facts: ometime in June #121, -una -. osa /anted to &urchase a Toyota -ite ce. 0t /as then a se!!er9s market and osahad diicu!ty indin" a dea!er /ith an avai!ab!e unit or sa!e. But u&on contractin" Toyota ha/, 0nc., he /as to!d thatthere /as an avai!ab!e unit. o on # June #121, osa and his son, Gi!bert, /ent to the Toyota ha/ Bou!evard, Pasi",6etro 6ani!a. They met Po&on" Bernardo, a sa!es re&resentative o Toyota. osa em&hasi'ed to Bernardo that he neededthe -ite ce not !ater than #* June #121 because he, his ami!y, and a ba!ikbayan "uest /ou!d use it on #2 June #121 to "o6arindu;ue, his home &rovince, /here he /ou!d ce!ebrate his birthday on #1 June. @e added that i he does not arrive inhis hometo/n /ith the ne/ car, he /ou!d become a A!au"hin" stock. Bernardo assured osa that a unit /ou!d be ready or

&ick u& at #$:$$ a.m. on #* June #121. Bernardo then si"ned a document entit!ed A"reements Bet/een 6r. osa LPo&on" Bernardo o Toyota ha/, 0nc, sti&u!atin" that a!! necessary documents /i!! be submitted to Toyota ha/(Po&on" Bernardo) a /eek ater, u&on arriva! o 6r. osa rom the Province (6arindu;ue) /here the unit /i!! be used onthe #1 June that the do/n&ayment o P#$$,$$$.$$ /i!! be &aid by 6r. osa on #+ June #121 and that the Toyota ha/,0nc. /i!! be re!eased a ye!!o/ -ite ce unit. 0t /as a!so a"reed u&on by the &arties that the ba!ance o the &urchase &rice

/ou!d be &aid by credit inancin" throu"h B.. Finance, and or this Gi!bert, on beha! o his ather, si"ned the documentso Toyota and B.. Finance &ertainin" to the a&&!ication or inancin". The ne?t day, osa and Gi!bert /ent to Toyota tode!iver the do/n&ayment o P#$$,$$$.$$. They met Bernardo /ho then accom&!ished a &rinted Eehic!e a!es Pro&osa!(EP) 12, on /hich Gi!bert si"ned under the subheadin" Aconorme. This document sho/s that the customer9s name isA6r. -una osa /ith home address at 3#> Gui8o treet,


11/32

February #11 a decision in avor o osa. 0t ru!ed that the A"reement bet/een 6r. osa and Po&on" Bernardo, /as ava!id &erected and contract o sa!e bet/een osa and Toyota /hich bound Toyota to de!iver the vehic!e to osa, andurther a"reed /ith osa that Toyota acted in bad aith in se!!in" to another the unit a!ready reserved or him thatBernardo, as an authori'ed sa!es e?ecutive o Toyota ha/, /as the !atter9s a"ent and thus bound Toyota ha/ that -unaosa &roved his socia! standin" in the community and suered besmirched re&utation, /ounded ee!in"s and s!ee&!essni"hts or /hich he ou"ht to be com&ensated and thus rendered 8ud"ment orderin" Toyota ha/ to &ay osa the sum oP*+,$$$ as mora! dama"es, P#$,$$$ as e?em&!ary dama"es, P3$,$$$ as attorney9s ees &!us P,$$$ !a/yer9strans&ortation are &er tri& in attendin" to the hearin" o the case, P,$$$ or osa9s trans&ortation are &er tri& inattendin" the hearin" o the case, and to &ay the cost o the suit.

4issatisied /ith the tria! court9s 8ud"ment, Toyota a&&ea!ed to the ourt o &&ea!s (%GR E $$3). 0n its decision&romu!"ated on 1 Ju!y #11, the ourt o &&ea!s airmed in toto the a&&ea!ed decision. @ence the &etition or revie/

by certiorari by Toyota ha/.

The u&reme ourt "ranted the &etition, and dismissed the cha!!en"ed decision o the ourt o &&ea!s and that o Branch32 o the Re"iona! Tria! ourt o 6arindu;ue, and the counterc!aim therein /ithout &ronouncement as to costs.

1. C%tract # sale e#$%e0 D$%srtic!e #+2 o the ivi! ode deines a contract o sa!e as ABy the contract o the sa!e one o the contractin" &artiesob!i"ates himse! to transer the o/nershi& o and to de!iver a determinate thin", and the other to &ay thereor a &ricecertain in money or its e;uiva!ent. contract o sa!e may be abso!ute or conditiona!.

2. C%tract # sale, "he% +er#ecte0 3##ectrtic!e #*+ o the ivi! ode s&eciica!!y &rovides /hen the contract o sa!e is deemed &erected, i.e. AThe contract o sa!eis &erected at the moment there is a meetin" o minds u&on the thin" /hich is the ob8ect o the contract and u&on the&rice. From that moment, the &arties may reci&roca!!y demand &erormance, sub8ect to the &rovisions o the !a/"overnin" the orm o contracts.

. EAreee%t &et"ee% Mr. *sa >+% @er%ar # yta *ha", -%c. %t a c%tract # saleThe A"reements bet/een 6r. osa L Po&on" Bernardo o Toyota ha/, 0nc. e?ecuted on June #121, is not a contracto sa!e. 7o ob!i"ation on the &art o Toyota to transer o/nershi& o a determinate thin" to osa and no corre!ativeob!i"ation on the &art o the !atter to &ay thereor a &rice certain a&&ears therein. The &rovision on the do/n&ayment oP#$$,$$$.$$ made no s&eciic reerence to a sa!e, it cou!d on!y reer to a sa!e on insta!!ment basis, as the EP e?ecuted theo!!o/in" day conirmed. But nothin" /as mentioned about the u!! &urchase &rice and the manner the insta!!ments /ereto be &aid. 7either !o"ic nor recourse to one9s ima"ination can !ead to the conc!usion that such a"reement is a &erectedcontract o sa!e.

5. =e#$%$t$ve +r$ce $s a% esse%t$al elee%t $% the #rat$% # a &$%$% a% e%#rcea&le c%tract # sale deinite a"reement on the manner o &ayment o the &rice is an essentia! e!ement in the ormation o a bindin" andenorceab!e contract o sa!e. This is so because the a"reement as to the manner o &ayment "oes into the &rice such that adisa"reement on the manner o &ayment is tantamount to a ai!ure to a"ree on the &rice. 4einiteness as to the &rice is anessentia! e!ement o a bindin" a"reement to se!! &ersona! &ro&erty.

7. N eet$% # the $%sThe A"reements bet/een 6r. osa L Po&on" Bernardo o Toyota ha/, 0nc. sho/s the absence o a meetin" o minds

bet/een Toyota and osa. osa did not even si"n it. Further, osa /as /e!! a/are rom its tit!e, /ritten in bo!d !etters, andthus kne/ that he /as not dea!in" /ith Toyota but /ith Po&on" Bernardo and that the !atter did not misre&resent that hehad the authority to se!! any Toyota vehic!e.

?. >rue%ce a% reas%a&le $l$e%ce $% $%/u$r$% authr$ty # ae%tosa kne/ that Bernardo /as on!y a sa!es re&resentative o Toyota and hence a mere a"ent o the !atter. 0t /as incumbentu&on osa to act /ith ordinary &rudence and reasonab!e di!i"ence to kno/ the e?tent o Bernardo9s authority as an a"entin res&ect o contracts to se!! Toyota9s vehic!es. &erson dea!in" /ith an a"ent is &ut u&on in;uiry and must discover u&onhis &eri! the authority o the a"ent.

. hree staes $% the c%tract # saleThere are three sta"es in the contract o sa!e, name!y (a) &re&aration, conce&tion, or "eneration, /hich is the &eriod one"otiation and bar"ainin", endin" at the moment o a"reement o the &arties (b) &erection o birth o the contract,

/hich is the moment /hen the &arties come to a"ree on the terms o the contract and (c) consummation or death, /hichis the u!i!!ment or &erormance o the terms a"reed u&on in the contract. 0n the &resent case, the A"reements bet/een6r. osa L Po&on" Bernardo o Toyota ha/, 0nc. may be considered as &art o the initia! &hase o the "eneration o


12/32

ne"otiation sta"e o a contract sa!e. The second &hase o the "eneration or ne"otiation sta"e /as the e?ecution o the EP(the do/n&ayment o the &urchase &rice /as P+3,#2.$$ /hi!e the ba!ance to be &aid on insta!!ment shou!d be inanced

by B.. Finance. 0t is assumed that B. Finance /as acce&tab!e to Toyota).

8. F$%a%c$% c+a%$es e#$%eFinancin" com&anies are deined in ection 3(a) o R +12$, as amended by P4s #+ and #*13, as Acor&orations or&artnershi&s, e?ce&t those re"u!ated by the entra! Bank o the Phi!i&&ines, the 0nsurance ommission and the and theoo&eratives dministration 5ice, /hich are &rimari!y or"ani'ed or the &ur&ose o e?tendin" credit aci!ities toconsumers and to industria!, commercia!, or a"ricu!tura! enter&rises, either by discountin" or actorin" commercia! &a&ersor accounts receivab!e, or by buyin" and se!!in" contracts, !eases, chatte! mort"a"es, or other evidence o indebtedness, or

by !easin" o motor vehic!es, heavy e;ui&ment and industria! machinery, business and oice machines and e;ui&ment,a&&!iances and other movab!e &ro&erty.

9. >art$es $% a sale % $%stalle%t &as$s #$%a%ce &y a #$%a%c$% c+a%y0 N eet$% # $%s as#$%a%c$% a++l$cat$% "as $sa++rve0n a sa!e on insta!!ment basis /hich is inanced by a inancin" com&any, 3 &arties are thus invo!ved: (#) the buyer /hoe?ecutes a note or notes or the un&aid ba!ance o the &rice o the thin" &urchased on insta!!ment, () the se!!er /hoassi"ns the notes or discounts them /ith a inancin" com&any, and (3) the inancin" com&any /hich is subro"ated in the&!ace o the se!!er, as the creditor o the insta!!ment buyer. ince B.. Finance did not a&&rove osa9s a&&!ication, there

/as then no meetin" o minds on the sa!e on insta!!ment basis.

1;. ytas vers$% # c$rcusta%ces lea$% t %%release # veh$cle re cre$&le

Toyota9s version that B.. Finance disa&&roved osa9s a&&!ication or /hich reason it su""ested to osa that he &ay the u!!&urchase &rice is more credib!e. Chen the !atter reused, Toyota cance!!ed the EP and returned to him his P#$$,$$$.$$.osa9s version, that the EP /as cance!!ed because the vehic!e /as de!ivered to another because o a more in!uentia!c!ient, is contradicted by &ara"ra&h * o his com&!aint /hich states that Bernardo Aor reasons kno/n on!y to itsre&resentatives, reused andor ai!ed to re!ease the vehic!e to the &!ainti . P!ainti demanded or an e?&!anation, butnothin" /as "iven.

11. 6*> ere +r+sal a% $ %t create ea%a&le r$ht $% #avr # *sa "he% $t "as a&rteThe EP /as a mere &ro&osa! /hich /as aborted in !ieu o subse;uent events. Thus, the EP created no demandab!e ri"htin avor o osa or the de!ivery o the vehic!e to him, and its non%de!ivery did not cause any !e"a!!y indemniiab!e in8ury.

12. A"ar # ral aaes "$thut leal &as$sThe a/ard o mora! dama"es is /ithout !e"a! basis. The on!y "round u&on /hich osa c!aimed mora! dama"es is that sinceit /as kno/n to his riends, to/nmates, and re!atives that he /as buyin" a Toyota -ite ce /hich they e?&ected to see onhis birthday, he suered humi!iation, shame, and s!ee&!ess ni"hts /hen the van /as not de!ivered. The van became thesub8ect matter o ta!ks durin" his ce!ebration that he may not have &aid or it, and this created an im&ression a"ainst his

business standin" and re&utation created an im&ression a"ainst his business standin" and re&utation. t the bottom othis c!aim is nothin" but mis&!aced &ride and e"o. @e shou!d not have announced his &!an to buy Toyota -ite ce kno/in"that he mi"ht not be ab!e to &ay the u!! &urchase &rice. 0t /as he /ho brou"ht embarrassment u&on himse! by bra""in"about a thin" /hich he did not o/n yet.

1. A"ar # e'e+lary aaes "$thut &as$s0 >ur+se # e'e+lary aaesince osa is not entit!ed to mora! dama"es and there bein" no a/ard or tem&erate, !i;uidated, or com&ensatorydama"es, he is !ike/ise not entit!ed to e?em&!ary dama"es.


13/32

Facts:Perecto 4y and Ci!redo 4y are brothers. ometime in #1*1, Ci!redo 4y &urchased a truck and a arm tractorthrou"h inancin" e?tended by -ibra Finance and 0nvestment or&oration (-ibra). Both truck and tractor /ere mort"a"edto -ibra as security or the !oan. Perecto 4y /anted to buy the tractor rom his brother so on $ u"ust #1*1, he /rote a!etter to -ibra re;uestin" that he be a!!o/ed to &urchase rom Ci!redo 4y the said tractor and assume the mort"a"e debto the !atter. 0n a !etter dated * u"ust #1*1, -ibra thru its mana"er, i&riano res a&&roved the Perecto9s re;uest. Thus,on e&tember #1*1, Ci!redo e?ecuted a deed o abso!ute sa!e in avor o Perecto over the tractor in ;uestion. t thattime, the sub8ect tractor /as in the &ossession o -ibra Finance due to Ci!redo9s ai!ure to &ay the amorti'ations. 4es&itethe oer o u!! &ayment by Perecto to -ibra or the tractor, the immediate re!ease cou!d not be eected because Ci!redohad obtained inancin" not on!y or said tractor but a!so or a truck and -ibra insisted on u!! &ayment or both. Perecto

/as ab!e to convince his sister, aro! 4y%eno, to &urchase the truck so that u!! &ayment cou!d be made or both. 5n

7ovember #1*1, a P7B check /as issued in the amount o P,$$$ in avor o -ibra, thus sett!in" in u!! the indebtednesso Ci!redo /ith the inancin" irm. Payment havin" been eected throu"h an out%o%to/n check, -ibra insisted that it bec!eared irst beore -ibra cou!d re!ease the chatte!s in ;uestion.

6ean/hi!e, ivi! ase R%#>>> entit!ed AGe!ac Tradin", 0nc. v. Ci!redo 4y, a co!!ection case to recover the sum oP#,>1.2$ /as &endin" in another court in ebu. 5n the stren"th o an a!ias /rit o e?ecution issued on * 4ecember#1*1, the &rovincia! sheri /as ab!e to sei'e and !evy on the tractor /hich /as in the &remises o -ibra in armen, ebu.The tractor /as subse;uent!y so!d at &ub!ic auction /here Ge!ac Tradin" /as the !one bidder. -ater, Ge!ac so!d the tractorto one o its stockho!ders, ntonio Gon'a!es. 0t /as on!y /hen the check /as c!eared on #* January #12$ that Perecto!earned about GD- havin" a!ready taken custody o the sub8ect tractor.

Perecto 4y i!ed an action to recover the sub8ect tractor a"ainst GD- Tradin" /ith the RT ebu ity. 5n 2 &ri! #122,the RT rendered 8ud"ment in avor o Perecto, &ronouncin" that Perecto is the o/ner o the tractor and directin" Ge!acTradin" or&oration and ntonio Gon'a!es to return the same to Perecto directin" the Ge!ac Tradin" and Gon'a!es

8oint!y and severa!!y to &ay Perecto the amount o P#,+#.$$ as e?&enses or hirin" a tractor P+$,$$$ or mora! dama"esP+$,$$$ or e?em&!ary dama"es and to &ay the cost.

5n a&&ea!, the ourt o &&ea!s reversed the decision o the RT and dismissed the com&!aint /ith costs a"ainst Perecto.The ourt o &&ea!s he!d that the tractor in ;uestion sti!! be!on"ed to Ci!redo 4y /hen it /as sei'ed and !evied by thesheri by virtue o the a!ias /rit o e?ecution issued in ivi! ase R%#>>>. @ence, the &etition or revie/ on certiorari.

The u&reme ourt "ranted the &etition, set aside the decision o the ourt o &&ea!s &romu!"ated on 3 6arch #11$,and reinstated the decision o the Re"iona! Tria! ourt dated 2 &ri! #122.

1. *ale # rtae +r+erty val$0 Mrtar a$%ta$%s "%ersh$+ # the +r+erty ##ere as secur$ty

0n the case o ervice/ide &ecia!ists 0nc. v. 0ntermediate &&e!!ate ourt (#* R 2$ H#121I), it /as stated that Athechatte! mort"a"or continues to be the o/ner o the &ro&erty, and thereore, has the &o/er to a!ienate the same ho/ever,he is ob!i"ed under &ain o &ena! !iabi!ity, to secure the /ritten consent o the mort"a"ee. (Francisco, Eicente, Jr., RevisedRu!es o ourt in the Phi!i&&ines, H#1*I, Eo!ume 0E%s Part 0, &. +s+#) Thus, the instruments o mort"a"e are bindin",

/hi!e they subsist, not on!y u&on the &arties e?ecutin" them but a!so u&on those /ho !ater, by &urchase or other/ise,ac;uire the &ro&erties reerred to therein. The absence o the /ritten consent o the mort"a"ee to the sa!e o themort"a"ed &ro&erty in avor o a third &erson, thereore, eects not the va!idity o the sa!e but on!y the &ena! !iabi!ity othe mort"a"or under the Revised Pena! ode and the bindin" eect o such sa!e on the mort"a"ee under the 4eed ohatte! 6ort"a"e. The mort"a"or /ho "ave the &ro&erty as security under a chatte! mort"a"e did not &art /ith theo/nershi& over the same. @e had the ri"ht to se!! it a!thou"h he /as under the ob!i"ation to secure the /ritten consent othe mort"a"ee or he !ays himse! o&en to crimina! &rosecution under the &rovision o rtic!e 3#1 &ar. o the RevisedPena! ode. nd even i no consent /as obtained rom the mort"a"ee, the va!idity o the sa!e /ou!d sti!! not be aected. 0nthe &resent case, Ci!redo 4y can se!! the sub8ect tractor. The consent o -ibra Finance /as obtained. 0n a !etter dated *

u"ust #1*1, -ibra a!!o/ed Perecto to &urchase the tractor and assume the mort"a"e debt o his brother. The sa!e

bet/een the brothers /as thereore va!id and bindin" as bet/een them and to the mort"a"ee, as /e!!.

2. "%ersh$+ ac/u$re "he% th$% el$vere t ve%ee0 Art$cle 159?rtic!e #1> o the ivi! ode states that the o/nershi& o the thin" so!d is ac;uired by the vendee rom the moment it isde!ivered to him in any o the /ays s&eciied in rtic!es #1* to #+$# or in any other manner si"nin" an a"reement that the&ossession is transerred rom the vendor to the vendee.

. Art$cle 1598 a% 1599 a++l$ca&le $% +rese%t case0 ractr ca%%t &e el$verertic!es #12 and #11 are a&&!icab!e in the &resent case. rtic!e #12 states that A/hen the sa!e is made throu"h a &ub!icinstrument, the e?ecution thereo sha!! be e;uiva!ent to the de!ivery o the thin" /hich is the ob8ect o the contract, i romthe deed the contrary does not a&&ear or cannot c!ear!y be inerred. rtic!e #11 &rovides that AThe de!ivery o movab!e&ro&erty may !ike/ise be made by the mere consent or a"reement o the contractin" &arties, i the thin" so!d cannot be


14/32

transerred to the &ossession o the vendee at the time o the sa!e, or i the !atter a!ready had it in his &ossession or anyother reason. 0n the &resent case, actua! de!ivery o the sub8ect tractor cou!d not be made. @o/ever, there /asconstructive de!ivery a!ready u&on the e?ecution o the &ub!ic instrument &ursuant to rtic!e #12 and u&on the consentor a"reement o the &arties /hen the thin" so!d cannot be immediate!y transerred to the &ossession o the vendee.

5. Mrtaees r$ht # #reclsure0 $+l$e r$ht t +ssess +r+erty t e##ect #reclsure mort"a"ee has the ri"ht o orec!osure u&on deau!t by the mort"a"or in the &erormance o the conditions mentioned inthe contract o mort"a"e. The !a/ im&!ies that the mort"a"ee is entit!ed to &ossess the mort"a"ed &ro&erty because&ossession is necessary in order to enab!e him to have the &ro&erty so!d. 0n the &resent case, it /as -ibra Finance /hich

/as in &ossession o the sub8ect tractor due to Ci!redo9s ai!ure to &ay the amorti'ation as a &re!iminary ste& toorec!osure.

7. Mrtaee %t "%er # the +r+erty rtae0 Mrtaees reey $s t have +r+erty sl $% +u&l$cauct$% a% t a++ly +rcees t &l$at$% secure

Chi!e it is true that Ci!redo 4y /as not in actua! &ossession and contro! o the sub8ect tractor, his ri"ht o o/nershi& /asnot divested rom him u&on his deau!t. 7either cou!d it be said that -ibra /as the o/ner o the sub8ect tractor because themort"a"ee can not become the o/ner o or convert and a&&ro&riate to himse! the &ro&erty mort"a"ed. (rtic!e $22, ivi!ode) aid &ro&erty continues to be!on" to the mort"a"or. The on!y remedy "iven to the mort"a"ee is to have said&ro&erty so!d at &ub!ic auction and the &roceeds o the sa!e a&&!ied to the &ayment o the ob!i"ation secured by themort"a"ee. (ee 6artine' v. P7B, 13 Phi!. *>+, *>* H#1+3I) There is no sho/in" that -ibra Finance has a!ready orec!osedthe mort"a"e and that it /as the ne/ o/ner o the sub8ect tractor.

?. h$r +ers% "h +urchases the rtae +r+erty assues &l$at$% # r$$%al rtarChere a third &erson &urchases the mort"a"ed &ro&erty, he automatica!!y ste&s into the shoes o the ori"ina! mort"a"or.(ee 0ndustria! Finance or&. v. &osto!, #** R +#H#121I). @is ri"ht o o/nershi& sha!! be sub8ect to the mort"a"e othe thin" so!d to him. 0n the &resent case, Perecto /as u!!y a/are o the e?istin" mort"a"e o the sub8ect tractor to -ibra.0n act, /hen he /as obtainin" -ibra9s consent to the sa!e, he vo!unteered to assume the remainin" ba!ance o themort"a"e debt o Ci!redo /hich -ibra undeniab!y a"reed to.

. >aye%t # check $%te%e t e't$%u$sh rtae &l$at$% a% %t a +aye%t # +urchase +r$ceThe &ayment o the check /as actua!!y intended to e?tin"uish the mort"a"e ob!i"ation so that the tractor cou!d be re!easedto Perecto. 0t /as never intended nor cou!d it be considered as &ayment o the &urchase &rice because the re!ationshi&

bet/een -ibra and Perecto is not one o sa!e but sti!! a mort"a"e. The c!earin" or encashment o the check /hich&roduced the eect o &ayment determined the u!! &ayment o the money ob!i"ation and the re!ease o the chatte!mort"a"e. 0t /as not determinative o the consummation o the sa!e. The transaction bet/een the brothers is distinct anda&art rom the transaction bet/een -ibra and Perecto. The contention, thereore, that the consummation o the sa!ede&ended u&on the encashment o the check is untenab!e.

8. *ale c%suate u+% e'ecut$% # +u&l$c $%strue%t0 C%struct$ve el$veryThe sa!e o the sub8ect tractor /as consummated u&on the e?ecution o the &ub!ic instrument on e&tember #1*1. t thistime constructive de!ivery /as a!ready eected. @ence, the sub8ect tractor /as no !on"er o/ned by Ci!redo 4y /hen it

/as !evied u&on by the sheri in 4ecember #1*1.

9. %ly +r+ert$es u%/uest$%a&ly "%e &y ue%t e&tr ca% &e lev$e u+%5n!y &ro&erties un;uestionab!y o/ned by the 8ud"ment debtor and /hich are not e?em&t by !a/ rom e?ecution shou!d be!evied u&on or sou"ht to be !evied u&on. For the &o/er o the court in the e?ecution o its 8ud"ment e?tends on!y over&ro&erties be!on"in" to the 8ud"ment debtor. (onso!idated Bank and Trust or&. v. ourt o &&ea!s, G.R. 7o. *2**#,January 3, #11#).

1;. h$r +arty %t +reclue #r tak$% ther leal ree$es t +rsecute cla$0t is inconse;uentia! /hether a third &arty c!aim has been i!ed or not by Perecto durin" the time the sheri !evied on thesub8ect tractor. &erson other than the 8ud"ment debtor /ho c!aims o/nershi& or ri"ht over !evied &ro&erties is not&rec!uded, ho/ever, rom takin" other !e"a! remedies to &rosecute his c!aim. (onso!idated Bank and Trust or&. v. ourto &&ea!s, su&ra) This is &recise!y /hat the &etitioner did /hen he i!ed the action or re&!evin /ith the RT.

11. Factual #$%$% # tr$al curt $ve% reat res+ect a% "e$ht0 Frau %t +resue &ut esta&l$she &yclear ev$e%ce0 Relat$%sh$+ %t a &ae # #rauThe ourt accords "reat res&ect and /ei"ht to the indin"s o act o the tria! court. There is no suicient evidence to sho/that the sa!e o the tractor /as in raud o Ci!redo and creditors. Chi!e it is true that Ci!redo and Perecto are brothers,this act a!one does not "ive rise to the &resum&tion that the sa!e /as raudu!ent. Re!ationshi& is not a bad"e o raud


15/32

(Go;uio!ay v. yci&, 1 R >>3 H#1>3I). 6oreover, raud can not be &resumed it must be estab!ished by c!ear convincin"evidence.

12. Actuat$%s # Gelac tra$% v$lat$ve # +rv$s$%s % hua% relat$%sGe!ac Tradin" kne/ very /e!! o the transer o the &ro&erty to Perecto on # Ju!y #12$ /hen it received summons basedon the com&!aint or re&!evin i!ed by Perecto /ith the RT. 7ot/ithstandin" said summons, it continued to se!! thesub8ect tractor to one o its stockho!ders on u"ust #12$.

Haystack: A$s% vs. Fel$' (GR 1252, Auust 1918)


A$s% vs. Fel$' [G.R. N. 1252. Auust , 1918.!Dn Banc, Fisher (J): + concur

Facts: By a &ub!ic instrument dated ## June #1#, . . ddison so!d to 6arciana Fe!i?, /ith the consent o her husband,Ba!bino Tioco, &arce!s o !and. Fe!i? &aid, at the time o the e?ecution o the deed, the sum o P3,$$$ on account o the&urchase &rice, and bound herse! to &ay the remainder in insta!!ments, the irst o P,$$$ on #+ Ju!y #1#, the second oP+,$$$ 3$ days ater the issuance to her o a certiicate o tit!e under the -and Re"istration ct, and urther, /ithin #$

years rom the date o such tit!e, P#$ or each coconut tree in bearin" and P+ or each such tree not in bearin", that mi"htbe "ro/in" on said &arce!s o !and on the date o the issuance o tit!e to her, /ith the condition that the tota! &rice shou!d

not e?ceed P2+,$$$. 0t /as urther sti&u!ated that the &urchaser /as to de!iver to the vendor + o the va!ue o the&roducts that she mi"ht obtain rom the &arce!s rom the moment she takes &ossession o them unti! the Torrenscertiicate o tit!e be issued in her avor. 0t /as a!so covenanted that /ithin # year rom the date o the certiicate o tit!e inavor o 6arciana Fe!i?, this !atter may rescind the &resent contract o &urchase and sa!e, in /hich case Fe!i? sha!! beob!i"ed to return to ddison the net va!ue o a!! the &roducts o the &arce!s so!d, and sha!! be ob!i"ed to return to her a!!the sums that /as &aid, to"ether /ith interest at the rate o #$ &er annum. ter the e?ecution o the deed o sa!e, at there;uest o Fe!i?. ddison /ent to -ucena, accom&anied by the ormer9s re&resentative, or the &ur&ose o desi"natin" andde!iverin" the !ands so!d. @e /as ab!e to desi"nate on!y o the &arce!s, and more than 3s o these /ere ound to be inthe &ossession o one Juan Ei!!auerte, /ho c!aimed to be the o/ner o the &arts so occu&ied by him. ddison admittedthat Fe!i? /ou!d have to brin" suit to obtain &ossession o the !and. 0n June #1#, Fe!i? i!ed an a&&!ication /ith the -andourt or the re"istration in her name o &arce!s o !and described in the deed o sa!e e?ecuted in her avor, to obtainrom the -and ourt a /rit o in8unction a"ainst the occu&ants, and or the &ur&ose o the issuance o this /rit. The&roceedin"s in the matter o this a&&!ication /ere subse;uent!y dismissed, or ai!ure to &resent the re;uired &!ans /ithin

the &eriod o the time a!!o/ed or the &ur&ose.

0n January #1#+, ddison i!ed suit in the F0 6ani!a to com&e! Fe!i? to make &ayment o the irst insta!!ment o P,$$$,demandab!e on #+ Ju!y #1#, and o the interest in arrears, at the sti&u!ated rate o 2 &er annum. Fe!i? and Tiocoans/ered the com&!aint and a!!e"ed by /ay o s&ecia! deense that ddison had abso!ute!y ai!ed to de!iver the !ands that

/ere the sub8ect matter o the sa!e, not/ithstandin" the demands made u&on him or this &ur&ose. he thereore askedthat she be abso!ved rom the com&!aint, and that, ater a dec!aration o the rescission o the contract o the &urchase andsa!e o said !ands, ddison be ordered to reund the P3,$$$ that had been &aid to him on account, to"ether /ith theinterest a"reed u&on, and to &ay an indemnity or the !osses and dama"es /hich the deendant a!!e"ed she had sueredthrou"h ddison9s nonu!i!ment o the contract. The tria! court rendered 8ud"ment in avor o Fe!i?, ho!din" the contracto sa!e to be rescinded and orderin" the return the P3,$$$ &aid on account o the &rice, to"ether /ith interest thereon atthe rate o #$ &er annum. From this 8ud"ment ddison a&&ea!ed.

The u&reme ourt he!d that the contract o &urchase and sa!e entered into by and bet/een the Parties on ## June #1# isrescinded, and ordered ddison to make restitution o the sum o P3,$$$ received by him on account o the &rice o thesa!e, to"ether /ith interest thereon at the !e"a! rate o > &er annum rom the date o the i!in" o the com&!aint unti!&ayment, /ith the costs o both instances a"ainst ddison.

1. Crss C+la$%t %t #u%e % c%ve%t$%al resc$ss$% &ut % the #a$lure t el$ver the la% slThe ross com&!aint is not ounded on the hy&othesis o the conventiona! rescission re!ied u&on by the court, but on theai!ure to de!iver the !and so!d. The ri"ht to rescind the contract by virtue o the s&ecia! a"reement not on!y did not e?istrom the moment o the e?ecution o the contract u& to one year ater the re"istration o the !and, but does not accrue unti!the !and is re"istered. The /ordin" o the c!ause substantiates the contention. The one year9s de!iberation "ranted to the&urchaser /as to be counted Arom the date o the certiicate o tit!e . . .. Thereore the ri"ht to e!ect to rescind thecontract /as sub8ect to a condition, name!y, the issuance o the tit!e. The record sho/s that u& to the &resent time that
http://berneguerrero.co-ph.com/2003/09/17/haystack-addison-vs-felix-gr-12342-3-august-1918/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/haystacks/http://berneguerrero.co-ph.com/category/a-oas/haystacks/http://berneguerrero.co-ph.com/2003/09/17/haystack-addison-vs-felix-gr-12342-3-august-1918/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/haystacks/


16/32

condition has not been u!i!!ed conse;uent!y Fe!i? cannot be heard to invoke a ri"ht /hich de&ends on the e?istence othat condition.

2. EFul#$lle%t # c%$t$% $+ss$&le #r reas% $+uta&le t +arty %t +rese%te0 in%the cross%com&!aint it had been a!!e"ed that the u!i!!ment o the condition /as im&ossib!e or reasons im&utab!e to

ddison, and i this a!!e"ation had been &roven, &erha&s the condition /ou!d have been considered as u!i!!ed (arts. ###*,###2, and ###1, iv. ode). This issue, ho/ever, /as not &resented in Fe!i?9s ans/er.

. ra$t$% I =el$very &y the ve%r # the th$% sl

The ode im&oses u&on the vendor the ob!i"ation to de!iver the thin" so!d. The thin" is considered to be de!ivered /hen itis &!aced Ain the hands and &ossession o the vendee. (iv. ode, art. #>.) 0t is true that the same artic!e dec!ares thatthe e?ecution o a &ub!ic instrument is e;uiva!ent to the de!ivery o the thin" /hich is the ob8ect o the contract, but, inorder that this symbo!ic de!ivery may &roduce the eect o tradition, it is necessary that the vendor sha!! have had suchcontro! over the thin" so!d that, at the moment o the sa!e, its materia! de!ivery cou!d have been made. 0t is not enou"h toconer u&on the &urchaser the o/nershi& and the ri"ht o &ossession. The thin" so!d must be &!aced in his contro!. Chenthere is no im&ediment /hatever to &revent the thin" so!d &assin" into the tenancy o the &urchaser by the so!e /i!! o the

vendor, symbo!ic de!ivery throu"h the e?ecution o a &ub!ic instrument is suicient. But i, not/ithstandin" the e?ecutiono the instrument, the &urchaser cannot have the en8oyment and materia! tenancy o the thin" and make use o it himse!or throu"h another in his name, because such tenancy and en8oyment are o&&osed by the inter&osition o another /i!!,then iction yie!ds to rea!ity the de!ivery has not been eected.

5. =el$very, accr$% t =all, &. +>$I inter&retin" artic!e #>o the ivi! ode).

. Resc$ss$% # sale a% retur% # +r$ce ue t %%el$very # th$% sl0n the &resent case, the mere e?ecution o the instrument /as not a u!i!!ment o the vendor9s ob!i"ation to de!iver thethin" so!d, and that rom such nonu!i!!ment arises the &urchaser9s ri"ht to demand, as she has demanded, the rescissiono the sa!e and the return o the &rice. (iv. ode, arts. #+$> and ##.)

8. N areee%t #r ve%ee t take ste+s t &ta$% ater$al +ssess$% # th$% sl0 the sa!e had been made under the e?&ress a"reement o im&osin" u&on the &urchaser the ob!i"ation to take thenecessary ste&s to obtain the materia! &ossession o the thin" so!d, and it /ere &roven that she kne/ that the thin" /as inthe &ossession o a third &erson c!aimin" to have &ro&erty ri"hts therein, such a"reement /ou!d be &erect!y va!id. But

there is nothin" in the instrument /hich /ou!d indicate, even im&!icit!y, that such /as the a"reement.

2. Possession /hi!e !and is bein" re"istered contem&!ated in contractThe ob!i"ation /as incumbent u&on Fe!i? to a&&!y or and obtain the re"istration o the !and in the ne/ re"istry o&ro&erty but rom this it cannot be conc!uded that she had to a/ait the ina! decision o the ourt o -and Re"istration, inorder to be ab!e to en8oy the &ro&erty so!d. 5n the contrary, it /as e?&ress!y sti&u!ated in the contract that the &urchasershou!d de!iver to the vendor # Ao the &roducts o the &arce!s rom the moment /hen she takes &ossession o themunti! the Torrens certiicate o tit!e be issued in her avor. This obvious!y sho/s that it /as not oreseen that the &urchasermi"ht be de&rived o her &ossession durin" the course o the re"istration &roceedin"s, but that the transaction rested onthe assum&tion that she /as to have, durin" said &eriod, the materia! &ossession and en8oyment o the &arce!s o !and.


17/32

9. 4eal $%terest ue as resc$ss$% $s ae &y v$rtue # +rv$s$%s # la"s the rescission is made by virtue o the &rovisions o !a/ and not by contractua! a"reement, it is not the conventiona! butthe !e"a! interest that is demandab!e.

Haystack: =au$la% vs. -AC (GR 4?99;, 28 Nve&er 1988)


=au$la% vs. -AC [G.R. N. 4?99;. Nve&er 28, 1988.!First 4ivision, ru' (J): concur

Facts:T/o !ots /ere o/ned by 4omin"o 6e!ad. The !ots are c!aimed by both Fe!i? 4a"ui!an and &o!onia 6e!ad (andher husband Jose Ta"acay). 5n 1 January #1>, &o!onia 6e!ad i!ed a com&!aint a"ainst 4a"ui!an in the then F0a"ayan or recovery o a arm !ot and a residentia! !ot /hich she c!aimed she had &urchased rom 4omin"o 6e!ad in #13and /ere no/ bein" un!a/u!!y /ithhe!d by 4a"ui!an. 0n his ans/er, 4a"ui!an denied the a!!e"ation and averred that he

/as the o/ner o the said !ots o /hich he had been in o&en, continuous and adverse &ossession, havin" ac;uired themrom 4omin"o 6e!ad in #1# and #13. The case /as dismissed or ai!ure to &rosecute but /as rei!ed in #1>*. t thetria!, 6e!ad &resented a deed o sa!e dated 4ecember #13, &ur&orted!y si"ned by 4omin"o 6e!ad and du!y notari'ed,

/hich conveyed the said &ro&erties to her or the sum o P2$.$$. he said the amount /as earned by her mother as a/orker at the Tabaca!era actory. he c!aimed to be the i!!e"itimate dau"hter o 4omin"o 6e!ad, /ith /hom she and hermother /ere !ivin" /hen he died in #1+. he moved out o the arm on!y /hen in #1> Fe!i? 4an"ui!an a&&roached her

and asked &ermission to cu!tivate the !and and to stay therein. he had a"reed on condition that he /ou!d de!iver &art othe harvest rom the arm to her, /hich he did rom that year to #1+2. The de!iveries havin" sto&&ed, she then consu!tedthe munici&a! 8ud"e /ho advised her to i!e the com&!aint a"ainst 4an"ui!an. 6e!ad9s mother, her on!y other /itness,corroborated this testimony. 4a"ui!an testiied that he /as the husband o 0sidra 6e!ad, 4omin"o9s niece, /hom 4omin"o6e!ad and his /ie Juana 6a!u&an" had taken into their home as their /ard as they had no chi!dren o their o/n. @e andhis /ie !ived /ith the cou&!e in their house on the residentia! !ot and he!&ed 4omin"o /ith the cu!tivation o the arm.4omin"o 6e!ad si"ned in #1# a &rivate instrument in /hich he "ave 4a"ui!an the arm and in #13 another &rivateinstrument in /hich he a!so "ave him the residentia! !ot, on the understandin" that the !atter /ou!d take care o the"rantor and /ou!d bury him u&on his death. 4an"ui!an &resented three other /itnesses to corroborate his statements andto &rove that he had been !ivin" in the !and since his marria"e to 0sidra and had remained in &ossession thereo ater4omin"o 6e!ad9s death in #1+. T/o o said /itnesses dec!ared that neither the &!ainti nor her mother !ived in the !and

/ith 4omin"o 6e!ad. The tria! court be!ieved 4a"ui!an and rendered a decision based main!y on the issue o &ossession.

5n a&&ea!, ho/ever, the a&&e!!ate court u&he!d 6e!ad as the true and !a/u! o/ner o the dis&uted &ro&erty, ho!din" thatthe &rivate instruments /here 4omin"o 6e!ad had conveyed the !and to 4a"ui!an /ere nu!! and void or reason thatdonation o rea! &ro&erty shou!d be eected throu"h a &ub!ic instrument. @ence, the &etition to the u&reme ourt.

The u&reme ourt set aside the decision o the a&&e!!ate court and reinstated that o the tria! court, /ith costs a"ainst&o!onia 6e!ad.

1. %erus %at$%s %t cvere &y Art$cle 59, re/u$r$% %at$%s # real +r+ert$es &e e##ectethruh a +u&l$c $%strue%tonsiderin" the !an"ua"e o the t/o &rivate instruments de!iverin" the residentia! !ots, 4omin"o 6e!ad did intend todonate the &ro&erties to 4a;"ui!an. The donee, ho/ever, /as not moved by &ure !ibera!ity. Chi!e tru!y donations, theconveyances /ere onerous donations as the &ro&erties /ere "iven to 4a"ui!an in e?chan"e or his ob!i"ation to take care othe donee or the rest o his !ie and &rovide or his buria!. @ence, it /as not covered by the ru!e in rtic!e *1 o the ivi!

ode re;uirin" donations o rea! &ro&erties to be eected throu"h a &ub!ic instrument.

2. =ctr$%e $% Ma%al vs. e Mesa a++l$esThe &resent case is s;uare!y under the doctrine !aid do/n in 6ana!o v. 4e 6esa, /here it /as he!d that Athe donation in;uestion /as made or a va!uab!e consideration, since the donors made it conditiona! u&on the donees9 bearin" thee?&enses that mi"ht be occasioned by the death and buria! o the donor, a condition and ob!i"ation /hich the doneecarried out in his o/n beha! and or his /ie. Thereore, in order to determine /hether or not said donation is va!id andeective, it shou!d be suicient to demonstrate that, as a contract, it embraces the conditions the !a/ re;uires and is va!idand eective, a!thou"h not recorded in a &ub!ic instrument.

. N ev$e%ce auce t su++rt values e'cha%e "ere $s+r+rt$%ate r e/ual7o evidence has been adduced to su&&ort the contention that the va!ues e?chan"ed (the va!ue o the !ands donated and theservices or /hich they /ere bein" e?chan"ed) /ere dis&ro&ortionate or une;ua! or the t/o transactions to be considered
http://berneguerrero.co-ph.com/2003/09/12/haystack-daguilan-vs-iac-gr-l-69970-28-november-1988/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/haystacks/http://berneguerrero.co-ph.com/category/a-oas/haystacks/http://berneguerrero.co-ph.com/2003/09/12/haystack-daguilan-vs-iac-gr-l-69970-28-november-1988/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/haystacks/


18/32

&ure or "ratuitous donations o rea! ri"hts, and hence, be eected throu"h a &ub!ic instrument and not by mere &rivate/ritin"s.

5. =au$la% tk care # the Mela s+uses0 >r# # %erus %at$%Both the tria! and a&&e!!ate court airmed the actua! a!!e"ation that 4a"ui!an took care o 4omin"o 6e!ad and !aterarran"ed or his buria! in accordance /ith the condition im&osed by the donor. 4a"ui!an armed the !and &ractica!!y byhimse! and so &rovided or the donee (and his /ie) durin" the !atter &art o 4omin"o 6e!ad9s !ie. 0t may be assumedthat there /as a air e?chan"e bet/een the donor and the donee that made the transaction an onerous donation.

7. =ee # *ale $% #avr # A+l%$a Mela sus+$c$usThe deed o sa!e in avor o &o!onia 6e!ad /as sus&icious. 0t /as a!!e"ed!y e?ecuted /hen &o!onia /as on!y three yearso!d and the consideration /as su&&osed!y &aid by her mother, 6aria Kedan, rom her earnin"s as a /a"e /orker in aactory. 5ne may /e!! /onder /hy the transer /as not made to the mother herse!, /ho /as ater a!! the one &ayin" orthe !ands. The sa!e /as made out in avor o &o!onia 6e!ad a!thou"h she had been usin" the surname Kedan, hermother9s surname, beore that instrument /as si"ned and in act even ater she "ot married. verment /as a!so made thatthe contract /as simu!ated and &re&ared ater 4omin"o 6e!ad9s death in #1+. 0t /as a!so a!!e"ed that even ater thesu&&osed e?ecution o the said contract, &o!onia 6e!ad considered 4omin"o 6e!ad the o/ner o the &ro&erties and thatshe had never occu&ied the same. onsiderin" these serious cha!!en"es, the a&&e!!ate court cou!d have devoted a !itt!emore time to e?aminin" the deed and the circumstances surroundin" its e?ecution beore &ronouncin" its va!idity.

?. >resu+t$% # ue e'ecut$% # a +u&l$c $%strue%t4ue e?ecution o a &ub!ic instrument is &resumed, the &resum&tion is dis&utab!e and /i!! yie!d to contradictory evidence,

/hich in the &resent case /as not reuted.

. Melas test$%y $%c%s$ste%t, #a$ls t +rve actual el$very # th$% sl $% the allee ee # saleDven assumin" the va!idity o the deed o sa!e, the record sho/s that 6e!ad did not take &ossession o the dis&uted&ro&erties and indeed /aited unti! #1> to i!e the action or recovery o the !ands rom 4a"ui!an. 0 she did have&ossession, she transerred the same to 4a"ui!an in #1>, by her o/n s/orn admission, and moved out to another !ot

be!on"in" to her ste&%brother. @er c!aim that 4a"ui!an /as her tenant (!ater chan"ed to administrator) /as disbe!ieved bythe tria! court, and &ro&er!y so, or its inconsistency. 0n short, she ai!ed to sho/ that she consummated the contract osa!e by actua! de!ivery o the &ro&erties to her and her actua! &ossession thereo in conce&t o &urchaser%o/ner.

8. Garch$tre%a vs. Alea0 ra$t$%: "%ersh$+ es %t +ass &y ere st$+ulat$% &ut %ly &yel$very

s he!d in Garchitorena v. !meda, it is a undamenta! and e!ementary &rinci&!e that o/nershi& does not &ass by mere

sti&u!ation but on!y by de!ivery (ivi! ode, rt. #$1+ Fide!ity and urety o. v. Ci!son, 2 Phi!. +#), and the e?ecution o a&ub!ic document does not constitute suicient de!ivery /here the &ro&erty invo!ved is in the actua! and adverse &ossessiono third &ersons (ddison vs. Fe!i?, 32 Phi!. $ 6asa!!o vs. esar, 31 Phi!. #3), it becomes incontestab!e that even iinc!uded in the contract, the o/nershi& o the &ro&erty in dis&ute did not &ass to the vendee.

9. Garch$tre%a vs. Alea0 >r+er act$% aa$%st +rese%t +ssessrs: s+ec$#$c +er#ra%ce # sale a%%t rev$%$cac$%7ot havin" become the o/ner or !ack o de!ivery, the vendee cannot &resume to recover the &ro&erty rom its &resent&ossessors. @is action, thereore, is not one o revindicacion, but one a"ainst his vendor or s&eciic &erormance o thesa!e to him.

9. N% u$s +act$s, se tra$t$%e $%$a reru tra%s#eru%tur0n Fide!ity and 4e&osit o. v. Ci!son, it /as dec!ared that it is a undamenta! &rinci&!e in a!! matters o contracts and a

/e!!%kno/n doctrine o !a/ that Anon mudis &actis, sed traditione dominia rerum transeruntur. s estab!ished in&ara"ra&h o artic!e >$1 o ivi! ode, the o/nershi& and other &ro&erty ri"hts are ac;uired and transmitted by !a/, by"it, by testate or intestate succession, and, in conse;uence o certain contracts, by tradition. The !o"ica! a&&!ication o thisdis&osition artic!e #$1+ &rescribes that a creditor has the ri"hts to the ruits o a thin" rom the time the ob!i"ation tode!iver it arises. @o/ever, he sha!! not ac;uire a rea! ri"ht (and the o/nershi& is sure!y such) unti! the &ro&erty has beende!ivered to him. 0n accordance /ith such dis&osition and &rovisions the de!ivery o a thin" constitutes a necessary andindis&ensab!e re;uisite or the &ur&ose o ac;uirin" the o/nershi& o the same by virtue o a contract.

1;. =ctr$%e # tra%s#er # +r+erty &y ere c%se%t %t a$ttes 6anresa states in his ommentaries on the ivi! ode, vo!ume #$, &a"es 331 and 3$: A5ur !a/ does not admit thedoctrine o the transer o &ro&erty by mere consent but !imits the eect o the a"reement to the due e?ecution o thecontract . . . The o/nershi&, the &ro&erty ri"ht, is on!y derived rom the de!ivery o a thin" . . .


19/32

11. Actual el$very # the th$% slThe ode im&oses u&on the vendor the ob!i"ation to de!iver the thin" so!d. The thin" is considered to be de!ivered /hen itis &!aced in the hands and &ossession o the vendee. (ivi! ode, art. #>). 0t is true that the same artic!e dec!ares that thee?ecution o a &ub!ic instrument is e;uiva!ent to the de!ivery o the thin" /hich is the ob8ect o the contract, but, in orderthat this symbo!ic de!ivery may &roduce the eect o tradition, it is necessary that the vendor sha!! have had such contro!over the thin" so!d that, at the moment o the sa!e, its materia! de!ivery cou!d have been made. 0t is not enou"h to coneru&on the &urchaser the o/nershi& and the ri"ht o &ossession. The thin" so!d must be &!aced in his contro!. Chen there isno im&ediment /hatever to &revent the thin" so!d &assin" into the tenancy o the &urchaser by the so!e /i!! o the vendor,symbo!ic de!ivery throu"h the e?ecution o a &ub!ic instrument is suicient. But i, not/ithstandin" the e?ecution o theinstrument, the &urchaser cannot have the en8oyment and materia! tenancy o the thin" and make use o it himse! or

throu"h another in his name, because such tenancy and en8oyment are o&&osed by the inter&osition o another /i!!, theniction yie!ds to rea!ity the de!ivery has not been eected. 0n the &resent case, 4a"ui!an and not 6e!ad is in actua!&ossession o the !iti"ated &ro&erties.

12. -% case the res+ect$ve cla$s # the +art$es are "eak0 *a%ts 3s+$%sa v. 3steaaDven i the res&ective c!aims o the &arties /ere both to be discarded as bein" inherent!y /eak, the decision shou!d sti!!inc!ine in avor o 4a"ui!an &ursuant to the doctrine announced in antos L Ds&inosa v. Dste8ada, /here the ourtannounced that i the c!aim o both the &!ainti and the deendant are /eak, 8ud"ment must be or the one /ho is in&ossession, as he is &resumed to be the o/ner, and cannot be ob!i"ed to sho/ or &rove a better ri"ht.

Haystack: >"er Cerc$al a% -%ustr$al Cr+. vs. CA (GR 11957, 2; u%e 199)


>"er Cerc$al a% -%ustr$al Cr+. vs. CA [G.R. N. 11957. u%e 2;, 199.!Third 4ivision, Pan"aniban (J): 3 concur, # on !eave

Facts: Po/er ommercia! L 0ndustria! 4eve!o&ment or&oration (P04), an industria! asbestos manuacturer, needed abi""er oice s&ace and /arehouse or its &roducts. For this &ur&ose, on 3# January #1*1, it entered into a contract o sa!e/ith the s&ouses Reyna!do and n"e!ita R. Ouiambao. The contract invo!ved a ># s;. m. &arce! o !and covered by TT %>>2> !ocated at the corner o Ba"tican and t Pau! treets, an ntonio Ei!!a"e, 6akati ity. The &arties a"reed that P04

/ou!d &ay the s&ouses P#$2,$$$.$$ as do/n &ayment, and the ba!ance o P1+,$$$.$$ u&on the e?ecution o the deed otranser o the tit!e over the &ro&erty. Further, P04 assumed, as &art o the &urchase &rice, the e?istin" mort"a"e on the!and. 0n u!! satisaction thereo, he &aid P*1,#+.** to P7B, the mort"a"ee. 5n # June #1*1, the s&ouses mort"a"ed a"ain

said !and to P7B to "uarantee a !oan o P#+,$$$.$$, P2$,$$$.$$ o /hich /as &aid to the s&ouses. P04 a"reed toassume &ayment o the !oan. 5n > June #1*1, the &arties e?ecuted a 4eed o bso!ute a!e Cith ssum&tion o 6ort"a"e(P1+,$$$ &ayment, /ith assum&tion o P7B mort"a"e /orth P#+,$$$, &endin" consent by P7B. The 4eed o a!e a!so&rovides a c!ause statin" that ACe hereby a!so /arrant that /e are the !a/u! and abso!ute o/ners o the above described&ro&erty, ree rom any !ien andor encumbrance, and /e hereby a"ree and /arrant to deend its tit!e and &eaceu!&ossession thereo in avor o the said Po/er ommercia! and 0ndustria! 4eve!o&ment or&oration, its successors andassi"ns, a"ainst any c!aims /hatsoever o any and a!! third &ersons sub8ect, ho/ever, to the &rovisions hereunder&rovided to /it.). 5n the same date, 6rs. .4. onstantino, then P049s Genera! 6ana"er, submitted to P7B said deed

/ith a orma! a&&!ication or assum&tion o mort"a"e. 5n #+ February #12$, P7B inormed the s&ouses that, or P049sai!ure to submit the &a&ers necessary or a&&rova! &ursuant to the the s&ouses9 !etter dated #+ January #12$, thea&&!ication or assum&tion o mort"a"e /as considered /ithdra/n that the outstandin" ba!ance o P#+,$$$.$$ /asdeemed u!!y due and demandab!e and that said !oan /as to be &aid in u!! /ithin #+ days rom notice. P04 &aid P7BP#,22$.+ on June #12$ and P$,23.# on 3 4ecember #12$, &ayments /hich /ere to be a&&!ied to theoutstandin" !oan. 5n 3 4ecember #12$, P7B received a !etter rom P04 re;uestin" that its assum&tion o mort"a"e be

"iven avorab!e consideration, and that the tit!e be transerred to its name so that it may undertake the necessary&rocedures to make use o the !ot, in e?c!usion o &eo&!e current!y in &hysica! occu&ation o the !ot. 5n #1 February #12,P7B sent P04 a !etter inormin" P04 that the !oan is &ast due rom !ast maturity /ith interest arreara"es amountin" toP+,2>.$2 as o #1 February #12, and re;uestin" P04 to remit &ayments to cover interest, char"es, and at !east &art othe &rinci&a! in order to &!ace P049s account in current orm.

5n #* 6arch #12, P04 i!ed ivi! ase +#* a"ainst the s&ouses or rescission and dama"es beore the RT Pasi",Branch #+1. Then, in its re&!y to P7B9s !etter o #1 February #12, P04 demanded the return o the &ayments it made onthe "round that its assum&tion o mort"a"e /as never a&&roved. 5n 3# 6ay #123, /hi!e the case /as &endin", themort"a"e /as orec!osed. The &ro&erty /as subse;uent!y bou"ht by P7B durin" the &ub!ic auction. Thus, an amendedcom&!aint /as i!ed im&!eadin" P7B as &arty deendant. 5n # Ju!y #11$, the tria! court ru!ed that the ai!ure ores&ondent s&ouses to de!iver actua! &ossession to &etitioner entit!ed the !atter to rescind the sa!e, and in vie/ o such
http://berneguerrero.co-ph.com/2003/09/11/haystack-power-commercial-and-industrial-corp-vs-ca-gr-119745-20-june-1997/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/haystacks/http://berneguerrero.co-ph.com/category/a-oas/haystacks/http://berneguerrero.co-ph.com/2003/09/11/haystack-power-commercial-and-industrial-corp-vs-ca-gr-119745-20-june-1997/http://berneguerrero.co-ph.com/category/a-oas/http://berneguerrero.co-ph.com/category/a-oas/haystacks/


20/32

ai!ure and o the denia! o the !atter9s assum&tion o mort"a"e, the s&ouses and P7B /as ob!i"ed to return the &aymentsmade by P04 (P#2*,#.** /ith !e"a! interest o # &er annum rom the date o the i!in" o the com&!aint unti! u!!y&aid by the s&ouses and P>,#>3.+1 /ith # rom date o 8ud"ment unti! u!!y &aid by the bank). 7o a/ard o otherdama"es and attorney9s ees /ere made. The counterc!aim o the s&ouses and P7B /ere dismissed or !ack o merit.

5n a&&ea! by the s&ouses and P7B, and on * 6arch #11+, the ourt o &&ea!s (in %GR E 312) reversed the tria!court. 0t he!d that the deed o sa!e bet/een the s&ouses and P04 did not ob!i"ate the ormer to e8ect the !essees rom the!and in ;uestion as a condition o the sa!e, nor /as the occu&ation thereo by said !essees a vio!ation o the /arrantya"ainst eviction. @ence, there /as no substantia! breach to 8ustiy the rescission o said contract or the return o the&ayments made. @ence, the &etition or revie/ on certiorari.

The u&reme ourt denied the &etition, and airmed the assai!ed decision.

1. Allee #a$lure t eect lessee #r lt %t su&sta%t$al &reachThe a!!e"ed Aai!ure o the s&ouses to e8ect the !essees rom the !ot in ;uestion and to de!iver actua! and &hysica!&ossession thereo cannot be considered a substantia! breach o a condition or t/o reasons: irst, such Aai!ure /as notsti&u!ated as a condition /hether reso!utory or sus&ensive in the contract and second, its eects and conse;uences

/ere not s&eciied either. The &rovision adverted to does not im&ose a condition or an ob!i"ation to e8ect the !essees romthe !ot. By his o/n admission, nthony Po/ers, P049s Genera! 6ana"er, did not ask its !a/yers to sti&u!ate in thecontract that the s&ouses /ere "uaranteein" the e8ectment o the occu&ants, because there /as a!ready a &roviso in saiddeed o sa!e that the se!!ers /ere "uaranteein" the &eaceu! &ossession by the buyer o the !and.

2. &scur$ty $% a c%tract c%strue aa$%st +arty caus$% $tny o obscurity in a contract, i the above%;uoted &rovision can be described, must be construed a"ainst the &arty /hocaused it. P04 itse! caused the obscurity because it omitted this a!!e"ed condition /hen its !a/yer drated said contract.

. *t$+ulat$% s$$lar t Rer vs. CA re/u$re $% eect$% te%a%ts0 hat "as %t $%te%e &y +art$esca%%t &e a ru% #r resc$ss$%0 the &arties intended to im&ose on the s&ouses the ob!i"ation to e8ect the tenants rom the !ot so!d, it shou!d haveinc!uded in the contract a &rovision simi!ar to that reerred to in Romero vs. ourt o &&ea!s, /here the e8ectment o theoccu&ants o the !ot so!d /as the o&erative act /hich set into motion the &eriod o buyer9s com&!iance /ith his o/nob!i"ation, i.e., to &ay the ba!ance o the &urchase &rice. Fai!ure to remove the s;uatters /ithin the sti&u!ated &eriod "avethe other &arty the ri"ht to either reuse to &roceed /ith the a"reement or to /aive that condition o e8ectment inconsonance /ith rtic!e #++ o the ivi! ode. 0n the case cited, the contract s&eciica!!y sti&u!ated that the e8ectment /asa condition to be u!i!!ed other/ise, the ob!i"ation to &ay the ba!ance /ou!d not arise. This is not so in the &resent case.

bsent a sti&u!ation thereor, the &arties cou!d not have intended to make its nonu!i!!ment a "round or rescission. 0they did intend this, their contract shou!d have e?&ress!y sti&u!ated so.

5. Resc$ss$% als %t all"e $# &reach $s %t su&sta%t$al a% #u%ae%t t #ul#$lle%t # &l$at$% tsell0n n" vs. .., rescission /as sou"ht on the "round that the se!!er had ai!ed to u!i!! their ob!i"ation Ato remove andc!ear the !ot so!d, the &erormance o /hich /ou!d have "iven rise to the &ayment o the consideration by buyer.Rescission /as not a!!o/ed, ho/ever, because the breach /as not substantia! and undamenta! to the u!i!!ment by the&etitioners o the ob!i"ation to se!!.

7. arra%ty a% %t c%$t$%0 ers # c%tract clearThe &rovision adverted to in the contract &ertains to the usua! /arranty a"ainst eviction, and not to a condition that /asnot met. The terms o the contract are so c!ear as to !eave no room or any other inter&retation.

?. =el$very a% $%$s+e%sa&le re/u$s$te0 Actual r c%struct$ve0 *y&l$c el$very!thou"h most authorities consider transer o o/nershi& as the &rimary &ur&ose o sa!e de!ivery remains anindis&ensab!e re;uisite as the !a/ does not admit the doctrine o transer o &ro&erty by mere consent. The ivi! ode&rovides that de!ivery can either be (#) actua! (rtic

Haystacks Cases

Documents

Transcript of Haystacks Cases