Sales and Lease

I. Contract of sale

A. Sale as distinguished from other contracts

1. Contract for piece of work (Art. 1467)

Co v. Commissioner of Internal Revenue (G.R. No. L-8506, 31 August 1956, 99 Phil. 841)
CIR v. Arnoldus Carpentry (G.R. No. 71122, 25 March 1988, 159 SCRA 199)

2. Agency to Sell (Art. 1466)

Quiroga v. Parsons (G.R. No. L-11491, 23 August 1918, 38 Phil 501)
Gonzalo Puyat & Sons, Inc. v. Arco Amusement (G.R. No. L-47538, 20 June 1941, 72 Phil 402)

B. Contract to sell as distinguished from contract of sale (Art. 1466)

Dignos v. Court of Appeals (G.R. No. L-59266, 29 February 1988, 158 SCRA 375)
Rayos v. Court of Appeals (G.R. No. 135528, 14 July 2004, 434 SCRA 365)
Clemeno, Jr. v. Lobrega (G.R. No. 137845, 9 September 2004)
Pulumbarit, Sr. v. Court of Appeals (G.R. Nos. 153745-46, 14 October 2015, 772 SCRA 244)
Akang v. Municipality of Isulan, Sultan Kudarat Province (G.R. No. 186014, 26 June 2013, 699 SCRA 745)
Heirs of Fausto C. Ignacio v. Home Bankers Savings and Trust Company (G.R. No. 177783, 23 January 2013, 689 SCRA 173)
Far East Bank and Trust Company v. Philippine Deposit Insurance Corporation (G.R. No. 172983, 22 July 2015)
Luzon Development Bank v. Enriquez (G.R. No. 168646, 12 January 2011)
Moldex Realty v. Saberon (G.R. No. 176289, 8 April 2013)

II. Object of sale (Art. 1306)

A. Subject matter must be determinate (Art. 1460)

Melliza v. City of Iloilo (23 SCRA 477)

B. Sale of undivided interest (Art. 1463)

Almendra v. IAC (21 November 1991)

C. Sale of things subject to resolutory condition (Art. 1465)

Department of Agrarian Reform, Quezon City v. Carriedo (G.R. No. 176549, 20 January 2016, 781 SCRA 301)

III. PRICE

A. Effect where price is simulated (Art. 147)

Payongayong v. Court of Appeals (G.R. No. 144576, 28 May 2004, 430 SCRA 210)

B. Meeting of minds as to price

Mapalo v. Mapalo (G.R. No. L-21489 and L-21628, 19 May 1966, 17 SCRA 114)
Velasco v. Court of Appeals (G.R. No. L-31018, 29 June 1973, 51 SCRA 439)
Co v. Court of Appeals (G.R. No. 93687, 6 May 1991, 286 SCRA 76)
Villanueva v. Court of Appeals (G.R. No. 107624, 28 January 1997, 267 SCRA 89)
Swedish Match v. Court of Appeals (G.R. No. 128120, 20 October 2004)

IV. Formation/perfection of contract of sale (Art. 1475)

A. Option contract (Art. 1479)

Adelfa Properties v. Court of Appeals (G.R. No. 111238, 25 January 1995)
Atkins, Kroll & Co. v. Cua Hian Tek (G.R. No. L-9871, 31 January 1958, 102 Phil 948)
Sanchez v. Rigos (G.R. No. L-25494, 14 June 1972, 45 SCRA 368)
Ang Yu Asuncion v. Court of Appeals (G.R. No. 109125, 2 December 1994)
Abalos v. Macatangay (G.R. No. 155043, 30 September 2004)
Riviera Filipina Inc. v. Court of Appeals (G.R. No. 117355, 5 April 2002, 380 SCRA 245)
Equatorial Realty Development v. Mayfair Theater Inc. (G.R. No. 106063, 21 November 1996, 264 SCRA 483)
Buot v. Court of Appeals (G.R. No. 119679, 18 May 2001, 357 SCRA 846)
Bible Baptist Church v. Court of Appeals (G.R. No. 126454, 26 November 2004)

B. Earnest money (Art. 1482)

Limson v. Court of Appeals (G.R. No. 135929, 20 April 2001, 357 SCRA 209)
San Miguel Properties v. Huang (G.R. No. 137290, 31 July 2000, 336 SCRA 2000)

C. Form of Sales (Art. 1483, 1874, 1581, 1403 [2, a, d, e])

Osmeña III v. Power Sector Assets and Liabilities Management Corporation (G.R. No. 212686, 28 September 2015, 771 SCRA 559)

V. Parties to a contract of sale (Art. 1327, 1489)

A. Sale between spouses (Art. 1490)

Matabuena v. Cervantes (G.R. No. L-28771, 31 March 1971, 38 SCRA 284)

B. Special incapacity of public officers and employees (Art. 1491-92)

Rubias v. Batiller (51 SCRA 120)
Distajo v. Court of Appeals (339 SCRA 52)
Valencia v. Cabanteng (196 SCRA 302)
Ramos v. Ngaseo (445 SCRA 529)
Pabugais v. Court of Appeals (G.R. No. 156846, 23 February 2004)
Fullido v. Grilli (G.R. No. 215014, 29 February 2016, 785 SCRA 278)
Domingo v. Spouses Molina (G.R. No. 200274, 20 April 2016)

VI. Obligations of the seller

A. Transfer of ownership and delivery of the object

1. Constructive or legal delivery (Art. 1498-1501)

Sabio v. International Corporate Bank (364 SCRA 385)
Phil. Suburban Development Corp. v. Auditor General (63 SCRA 397)

2. When obligation to deliver arises (Art. 1524)

Addison v. Felix (38 Phil 404)
Pasagui v. Villablana (68 SCRA 18)
Amigo v. Teves (96 Phil 252)
Banzon v. Cruz (45 SCRA 475)
EDCA Publishing v. 184 SCRA 614 (184 SCRA 614)
Alliance Tobacco Corporation v. Philippine Virginia Tobacco (179 SCRA 336)

3. Other rules on delivery:

(a) Sale of real property by unit of measure or number (Art. 1539-41)

Sta. Ana Jr. v. Hernandez (18 SCRA 973)

(b) Sale of real estate made for a lump sum (Art. 1542)

Semira v. Court of Appeals (230 SCRA 577)
Balantakbo v. Court of Appeals (249 SCRA 323)
Roble v. Arbasa (362 SCRA 69)
Arcaina v. Ingram (G.R. No. 196444, 15 February 2017)

(c) Rules in case of double sale (Art. 1544)

Paylago v. Jarabe (G.R. No. L-20046, 27 March 1968, 22 SCRA 1247)
Hanopol v. Pilapil (G.R. No. L-19248, 28 February 1963, 7 SCRA 452)
Agricultural & Home Extension Development Group v. Court of Appeals (G.R. No. 92310, 3 September 1992, 213 SCRA 563)
Balatbat v. Court of Appeals (G.R. No. 109410, 28 August 1996)
Caram v. Laureta (G.R. No. L-28740, 24 February 1981, 103 SCRA 7)
Tañedo v. Court of Appeals (G.R. No. 104482, 22 January 1996)
Tanongon v. Samson (G.R. No. 140889, 9 May 2002, 382 SCRA 130)
Consolidated Rural Bank v. Court of Appeals (G.R. No. 132161, 17 January 2005)
Dela Merced v. GSIS (G.R. No. 167140, 23 November 2011, 365 SCRA 1)
San Lorenzo Development Corp. v. Court of Appeals (G.R. No. 124242, 21 January 2005, 449 SCRA 99)
Carumba v. Court of Appeals (G.R. No. L-27587, 18 February 1970, 31 SCRA 558)
Rosaroso v. Soria (G.R. No. 194846, 19 June 2013, 699 SCRA 232)
Skunac Corporation v. Sylianteng (G.R. No. 205879, 23 April 2014, 723 SCRA 625)
Manigque-Stone v. Cattleya Land, Inc (G.R. No. 195975, 5 September 2016, 802 SCRA 173)
Spring Homes Subdivision Co., Inc. v. Tablada, Jr. (G.R. No. 200009, 23 January 2017, 815 SCRA 114)
Duran v. Intermediate Appellate Court (138 SCRA 489)
Domingo v. Manzano (G.R. No. 201883, 16 November 2016)

B. Warranties

1. Express warranty (Art. 1546)

Philippine Steel Coating Corp. v. Quiñones (G.R. No. 194533, 19 April 2017)

2. Implied warranties (Art. 1547)

(a) warranty on seller’s title; liability in case of eviction (Art. 1548-1559)

JM Tuazon & Co., Inc. v. Court of Appeals (G.R. No. L-41233, 21 November 1979, 94 SCRA 413)
Escaler v. Court of Appeals (G.R. No. L-42636, 1 August 1985, 138 SCRA 1)

(b) warranty against hidden defects of, or encumbrances upon the thing sold; vendor’s responsibility in case of breach (Art. 1560 –1561, 1566)

Moles v. IAC (G.R. No. 73913, 31 January 1989, 169 SCRA 777)
Philippine Manufacturing Co. v. Jucro (48 Phil 621)
Nutrimix Feeds Corporation v. Court of Appeals (G.R. No. 152219, 25 October 2004)
Tan Chun Suy v. Court of Appeals (G.R. No. 93640, 7 January 1994, 229 SCRA 151)

VII. Rights and obligations of the vendee

1. Rescission in case of sale of movable thing (Art. 1593)

Arra Realty Corporation v. Spouse Arguelles (G.R. No. 142310, 20 September 2004)
Iriñgan v. Court of Appeals (G.R. No. 129107, 26 September 2001, 366 SCRA 41)
Laforteza v. Machuca (16 June 2000, 333 SCRA 643)
Vda. de Mistica v. Naguiat (11 December 2003, 418 SCRA 73)
Gomez v. Court of Appeals (21 September 2000, 340 SCRA 720)
Odyssey Park v. Court of Appeals (8 October 1997, 280 SCRA 253)
Fedman Development Corporation v. Agcaoili (G.R. No. 165025, 31 August 2011)

VIII. Actions for breach of contract of sale of goods

A. Recto law (sale of movables on installments) (Art. 1484-86)

Levy Hermanos, Inc. v. Gervacio (69 PHIL. 52)
Zayas v. Luneta Motor Company (117 SCRA 726)
Borbon II v. Servicewide Specialists, Inc. (G.R. No. 106418, 11 July 1996)
Bachrach Motor Co. v. Millan (G.R. No. L-42256, 25 April 1935, 61 Phil 409)
Tajanlangit v. Southern Motors, Inc. (101 Phil. 606)
Cruz v. Filipinas Investment & Finance Corp. (G.R. No. L-24772, 27 May 1968, 23 SCRA 791)
PNB v. Office of the President (G.R. No. 104528, 18 January 1996)
Layug v. IAC (G.R. No. 75364, 23 November1988, 167 SCRA 627)
PCI Leasing and Finance, Inc. v. Giraffe-X Creative Imaging, Inc. (G.R. No. 142618, 12 July 2007, 527 SCRA 405)

IX. Extinguishment of sale (Art. 1600)

1. Conventional redemption (Art. 1601 to 1616)

Catangcatang v. Legayada (G.R. No. L-26295, 14 July 1978, 84 SCRA 51)
Villarica v. Court of Appeals (G.R. No. L-19196, 29 November 1968, 26 SCRA 189)
Diamante v. Court of Appeals (G.R. No. L-51824, 7 February 1992, 206 SCRA 52)
Vda. De Urbano v. GSIS (G.R. No. 137904, 19 October 2001, 367 SCRA 672)
Legaspi v. Court of Appeals (G.R. No. L-45510, 27 May 1986, 142 SCRA 82)
Gregorio v. Vda. De Culig (G.R. No. 180559, 20 January 2016)

a. Equitable mortgage (Art. 1602-06)

San Pedro v. Lee (G.R. No. 156522, 28 May 2004)
Ceballos v. Intestate Estate of the late Emigdio Mercado (G.R. No. 155856, 28 May 2004)
Cruz v. Court of Appeals (G.R. No. 143388, 6 October 2003)
Balatero v. IAC (G.R. No. 73889, 30 September 1987, 154 SCRA 530)
Bundalian v. Court of Appeals (G.R. No. L-55739, 22 June 1984, 129 SCRA 645)
Lacorte v. Court of Appeals (286 SCRA 24)
Camus v. Court of Appeals (222 SCRA 612)
Dapiton v. Court of Appeals (272 SCRA 95)
Repuela v. Estate of the Spouses Larawan (G.R. No. 219638, 7 December 2016)

2. Legal redemption; concept and instances (Art. 1619-1623)

Legaspi v. Court of Appeals (142 SCRA 82)
Alonzo v. Intermediate Appellate Court (G.R. No. 72873, 28 May 1987, 150 SCRA 259)
Reyes v. Concepcion (190 SCRA 171)
Uy v. Court of Appeals (G.R. No. 109557, 29 November 2000, 246 SCRA 703)
Primary Structures Corporation v. Sps. Valencia (G.R. No. 150060, 19 August 2003)
Lee Chuy Realty Corporation v. Court of Appeals (G.R. No. 104114, 4 December 1995)
Francisco v. Boiser (332 SCRA 792)
Cebu State College of Science and Technology (CSCST) v. Misterio (G.R. No. 179025, 17 June 2015, 759 SCRA 1)
Gregorio v. Vda. De Culig (G.R. No. 180559, 20 January 2016)

X. Lease

1. Obligations of the lessor

Chua Tee Dee v. Court of Appeals (G.R. No. 135721, 27 May 2004)
Tagbilaran Integrated Sellers Association v. Court of Appeals (G.R. No. 148562, 25 November 2004, 444 SCRA 193)

2. Obligation of outgoing/incoming lessee or lessor (Art. 1683)

Mallarte v. Court of Appeals (178 SCRA 310)
Chua Tee Dee v. Court of Appeals (G.R. No. 135721, 27 May 2004)
Tagbilaran Integrated Sellers Association v. Court of Appeals (G.R. No. 148562, 25 November 2004, 444 SCRA 193)
Spouses Golez v. Nemeño (G.R. No. 178317, 23 September 2015, 771 SCRA 306)
Castro v. Palenzuela (G.R. No. 184698, 21 January 2013)

CASE DIGESTS

Sales and Lease

I. Contract of sale

A. Sale as distinguished from other contracts

1. Contract for piece of work (Art. 1467)

2. Agency to Sell (Art. 1466)

B. Contract to sell as distinguished from contract of sale (Art. 1466)

II. Object of sale (Art. 1306)

A. Subject matter must be determinate (Art. 1460)

B. Sale of undivided interest (Art. 1463)

C. Sale of things subject to resolutory condition (Art. 1465)

III. PRICE

A. Effect where price is simulated (Art. 147)

B. Meeting of minds as to price

IV. Formation/perfection of contract of sale (Art. 1475)

A. Option contract (Art. 1479)

B. Earnest money (Art. 1482)

C. Form of Sales (Art. 1483, 1874, 1581, 1403 [2, a, d, e])

V. Parties to a contract of sale (Art. 1327, 1489)

A. Sale between spouses (Art. 1490)

B. Special incapacity of public officers and employees (Art. 1491-92)

VI. Obligations of the seller

A. Transfer of ownership and delivery of the object

1. Constructive or legal delivery (Art. 1498-1501)

2. When obligation to deliver arises (Art. 1524)

3. Other rules on delivery:

(a) Sale of real property by unit of measure or number (Art. 1539-41)

(b) Sale of real estate made for a lump sum (Art. 1542)

(c) Rules in case of double sale (Art. 1544)

B. Warranties

1. Express warranty (Art. 1546)

2. Implied warranties (Art. 1547)

(a) warranty on seller’s title; liability in case of eviction (Art. 1548-1559)

(b) warranty against hidden defects of, or encumbrances upon the thing sold; vendor’s responsibility in case of breach (Art. 1560 –1561, 1566)

VII. Rights and obligations of the vendee

1. Rescission in case of sale of movable thing (Art. 1593)

VIII. Actions for breach of contract of sale of goods

A. Recto law (sale of movables on installments) (Art. 1484-86)

IX. Extinguishment of sale (Art. 1600)

1. Conventional redemption (Art. 1601 to 1616)

a. Equitable mortgage (Art. 1602-06)

2. Legal redemption; concept and instances (Art. 1619-1623)

X. Lease

1. Obligations of the lessor

2. Obligation of outgoing/incoming lessee or lessor (Art. 1683)