LOSS, DETERIORATION, FRUITS AND

OTHER BENEFITS
ROMAN V GRIMALT
Facts: Grimalt purchased from Roman a
schooner. The sale was predicted upon
the condition that it was seaworthy and
that Roman will perfect his title thre-to
the same being being registered to
Paulina Giron. Roman did not perfected
his title and due to severe storm the
vessel sank. Roman now sues Grimalt for
the purchase price of the vessel.
Issue: W/N Grimalt is liable for the loss
Held: No. There was yet to be perfected
contract between them for failure of
Roamn to perfect his title.
LAWYERS
COOPERATIVE
PUBLISHING V TABORA
Facts: Tabora purchased AmJur from
Lawyers Coop.the agreement was the
ownership remains with Lawyer Coop
until paid in full. The books were
delivered in his office, the same night his
office was razed by fire. Tabora failed to
pay the full price. Layers Copp sues him
for the balance Tabora invokes force
majeure.

Facts: Levy sold a car to Gervacio.

Gevacio made an initial payment and a
promissory note for the balance. He
failed to pay the note at maturity date so
Levy foreclosed the mortgage. Levy then
filed a complaint for the collection of the
remaining balance and interest.
Issue: W/N Levy can still collect the
balance
Held: Yes. Art. 1454-A of the CC does not
apply In the case at bar, although it is a
sale of personal property, it is not
payable in installments. It is payable in
straight term in which the balance should
be paid in its totality at maturity date of
the promissory note, therefore the
prohibition does not apply.
DELTA MOTOS SALES CORP. V NIU
KIM DUAN
Facts: Niu Kim Duan purchased from
Delta Motors 3 aircon. Niu paid the down
payment, the balance payable in 24
installments. Title remained with Delta
until paid in full. Failure to pay in 2
months made the whole obligation due
and demandable. Niu failed to pay. Delta
filed complaint of Replevin and applied
the installment as rentals.
Issue: W/N the remedy of Delta was
unconscionable.

Issue: Who bears the loss?

Held: Tabora. The stipulation retaining
ownership to the seller is intended
merely to secure payment by the buyer.
Likewise, the obligation of Tabora consts
of the delivery not the determinate thing,
but a generic thing-money. Thus, he is
not absolved from liability.

Held: No. the stipulation is valid.

Anunpaid seller has 3 alternative
remedies; Delta chose to cancel the sale
for default in 2 installement. Having done
so, barred him from claiming the balance
of Niu.
TAJANLANGIT V SOUTHERN MOTORS

REMEDIES
FOR
CONTRACT OF SALE
LEVY V GERVACIO

BREACH

OF
Facts: Tajanlangit brought 2 tractors
from Southern Motors. Tajanlangit paid
to pay any of the installement. Southern
Motors sued him. Sheriff levied upon the

propertyand sold to public auction.

Tajanlangit sought to annul the writ of
execution since SOutheren repossessed
the machineries he is therefore relieved
from liability.
Issue: W/N he is relieved form liability.
Held: No. While the foreclosure barred
futher action this does not apply to the
case, since Southeren did not foreclose
on the mortgage but sues bases on the
Promissory note exclusively.
NONATO V IAC
Facts:
Nonato
purchased
from
a
volkwagen from Peoples Car. They issued
a Promissory Note with chattel mortgage.
Peoples car assigned its right to
Investors finance. Nonato defaulted, thus
Investors repossessed the car and
demanded payment.
Issue: W/N Investors can still demand
payment.
Held: NO. The remedies under Art. 1484
are alternative not cumulative. Investors
Finance in effect cancelled the sale it
cannot claim the balance of the payment
anymore since there was no attempt at
all to return the car.
RIDAD V FILINVEST
Facts: Ridad purchased 2 Ford Sedan
payable in 24 installments. Promissory
note
was
executed
with
chattel
mortgage. Another chattel mortgage was
executed to a Chevy car and another
upon the franchise to operate a taxicab.
Supreme Sales assigned its rights to
Filinvest. Ridad defaulted. Property
foreclosed but unable to satisfy the debt,
Filinvest also foreclosed the Chevy and
the franchise.

Issue: W/N Filinvest can foreclose the

Chevy and the Franchise
Held: No. when the unpaid seller
forecloses on the mortgage, the law
precludes him another action. By
choosing to foreclose the Sedan Filinvest
renounced all his rights under the PN.
ZAYAS V LUNETA MOTORS
Facts: Zayas purchased a ca from
Escano, dealer of Luneta Motor Co. unit
was delivered and payable in 26
installments
secured
with
chattel
mortgage. Zayas failed to pay. Luneta
foreclosed the property however the sale
was insufficient. Luneta filed a case for
recovery.
Issue: W/N Luneta may still recover
Held: No. when the unpaid seller
forecloses on the mortgage, the law
precludes him from bringing further
action.
NORTHERN MOTORS V SAPINOSO
Facts: Sapino purchased a car from
Northern
motors
making
a
down
payment and a PN with chattel mortgage
from the balance payable in installment.
Sapino failed to pay the 1 st 5 installments
he only paid for 3 months but failed to
make payment for the rest. Northeren
motors sued Sapino to avail foreclosure
of the property. Sapino claims that the
car was defective.
Issue: W/N Northern motors is barred
from claiming
Held: No. the writ of replevin is only a
preliminary step to foreclosure. To bar
from claiming further payments there
must be a foreclosure in the case, there
has not yet any foreclosure sale resulting
in deficiency.

CRUZ V FILIPINAS INVESTMENT &

FINANCE CORP.
Facts: Cruz brought a bus from Far East
Motor payable in installment for 30
months with 12% interest. PM was
executed with chattel mortgage since
there was no down payment another
security was executed for the land of
Mrs. Reyes which was mortgaged to DBP.
Far East assigned all its rights to Filipinas
Finance.
Cruz
defaulted.
Filipinas
foreclosed the property but it was not
sufficient to over the balance and request
to foreclose the property mortgaged to
DBP.
Issue: W/N the additional security is
allowed
Held: No. Art 1484 provides for the
remedy. These remedies are alternative
thus the exercise of which bars the other
remedies. To allow Filipinas to recover
the additional security would result in a
circumvention of the law.
BORBON
II
V
SPECIALISTS INC.

SERVICEWIDE

Facts: Daniel and Francisco issued a PN

in favor of Pangasinan Auto Mart for the
purchase of certain chattels. It was
secured by chattel mortgage. The rights
were given to Servicewide. Borbons
failed to pay thus the mortgage were
foreclosed. Borbons claimed that they
delivered the chattels not in accordance
with their instructions.
Issue: W/N it was proper for the trial
court to award liquidated damages and
attys fee.
Held: NO. When a person assigns credits
to another, the latter is bound under the
same law; thus, Art. 1484 is equally
applicable.

MACONDRAY & CO V EUSTAQUIO

Facts: Eustaquio bought a car from
Macondray and executed a PN payable in
installment and chattel mortgage with
stipulation of attys fee, collection
expenses and other costs. Eustaquio
failed to pay, property foreclosed
however there it is not sufficient.
Issue: W/N Macondray may still claim the
interests and attys fees
Held: No. it the seller foreclosed the
mortgage he can no longer avail other
remedies.
FILIPINAS INVESTMENT V. RIDAD
(SAME CASE PLEASE REFER TO PAGE
2.)
PCI LEASING AND FINANCE INC V
GIRAFFE-X CREATIVE IMAGING INC
Facts: PCI and Giraffe entered into a
lease agreement for several machineries.
Giraffe paid a guaranty deposit. After 1
year Giraffe defaulted in payment. PCI
demanded a formal pay or surrender
equipment type but failed. PCI asked for
writ of replevin.
Issue: W/N the contract was covered by
Art 1485 and 1484 hence barred from
recovery.
Held: YES. In the case PCI acquired the
officec equipments. Their agreement was
in case of default PCI would make a
cumulative remedies. PCI demanded for
payment and in choosing replevin, PCI
waived its right to bring an action to
recover unpaid rentals.
LEGARDA V SALDANA

Facts: Saldana entered into a contract

with Legarda to sell 2 lots payable in 120
installments for 10 years. Saldana paid
95 installments without stating which lot
was being paid. After 5 years, Saldana
contacted Legarda that there is a buyer
for the building however it was prevented
so because Hermanos failed to introduce
the stipulation. Legarda claimed that
Saldana failed to complete payment
therefore all amounts paid shall be
considered as rentals.
Issue: W/N the payments are considered
rents
Held: NO. No. Considering that Saldana
paid the lots including interest by this the
Court held that Saldana had already paid
for at least one lot and given the choice
to which one. Even if Saldana defaulted
in payment he has already paid more
that full amount. Art. 1234 should apply.
JESTRA DEV AND
CORP V PACIFICO

MANAGEMENT

Facts: Pacifico signed a reservation

application with Fil Estate for a purchase
of a house and lot and paid the
reservation fee. They executed a contract
to sell. Pacifico issued 12 post dated
checks which Jestra denied and sent a
notarial notice of cancellation. Pacifico
claims that despite the full payment
Jestra failed to deliver the property
instead sole it another.
Issue: W/N Pacifico paid at least 2 years
of installments.
Held:
NO.
Pacifico
paid
the
11
installments but failed to pay at least 2
years of installments therefore he is not
entitled to a refund of the cash surrender
value of his payments under Sec. 3 of RA
6552.
MCLAUGHLIN V CA

Facts: Mclaughlin entered into a contract

with Flores of a conditional sale of real
property. The purchase price should be
paid upon execution of the deed and the
balance not later than May 31, 1977 with
interest per month until fully paid. Flores
failed to pay hence petitioner filed a
complaint. A compromise agreement was
entered and accepted by the Court.
Petitioner wrote to Flores demanding
payment Flores replied to pay the full
balance. Petitioner filed a writ of
execution claiming that Flores failed to
pay the installments.
Issue: W/N it is inequitable to cancel the
contract and forfeit the amount paid.
Held: YES. There is already substantial
compliance
by
Flores
with
the
compromise agreement. Maceda law
recognize the vendors right to cancel the
contract to sell upon the breach and
nonpayment but with grace period of 2
years of regular installment payments.
REMEDY OF RESCISSION IN SALES
CONTRACT COVERING IMMVABLES;
CONTRACT OF SALE VS CONTRACT
TO SELL
ADELFA PROPERTIES V CA
Facts: Jimenez siblings were the coowners of a parcel of land. 2 siblings sold
their shares to Adelfa Properties. Adelfa
express interest in buying the remaining
land an exclusive option to purchase was
executed with the selling price at 2M and
option money of 50K shall be credited as
partial payment. Rosario and Salud
executed another deed of condional sale
to Emylene Chua. Rosario and Salud
Jimenez filed a petition for annulment of
contract.
Issue: W/N the contract
Jimenez and CA affirmed.

between

Held: NO. The alleged option contract is

a contract to sell, rather than a contract
of sale. The parties never intended to
transfer ownership to Adelfa. There is no
stipulation anent reversion or reconveyance of
the property in the event that petitioner does
not comply with its obligation. With the
absence of such a stipulation, it may legally
be inferred that there was an implied
agreement that ownership shall not pass to
the purchaser until he had fully paid the
price. Article 1478 of the Civil Code does not
require that such a stipulation be expressly
made.
CORONEL V CA
Facts: Coronel executed a document entitled
receipt of down payment in favor of Alcaraz
fro 50K as purchase for an inherited house and
lot promising to execute a deed of absolute
sale as soon as it is transferred in their names.
When it was transferred Coronels sold the
property to Mabanag. Alcaraz filed a
complaint for specific performance.
Issue: W/N the receipt of down payment
serves as a contract to sell or a conditional
contract of sale.
Held: No. The agreement could not have been
a contract to sell because the seller made no
expense reservation of ownership or title to
the subject matter. Moreover, unlike in a
contract to sell, petitioners did not merely
promise to sell the property to private
respondent upon the fulfillment of the
suspensive condition. On the contrary, having
already agreed to sell the subject property,
they undertook to have the certificate of title
changed to their names and immediately
thereafter, to execute the written deed of
absolute sale.
PNP V CA
Facts: PNB owned a parcel of land which
Lapaz Kaw Ngo offered to buy. PNP
accepted Lapazs offer subject to certain
stipulations. However due to difficulties
in money she requested for adjustment

of payment proposal which the bank

denied. PNP did not receive payment so
PNP forfeited and the same never
materialized. Lapaz requested for a
refund.
Issue: W/N there
contract of sale.

was

perfected

Held: No. there was no perfected

contract of sale.
The first letteragreement was cancelled and thereafter
no longer existed. The 2nd was not a
contract of sale but a contract to sell
whose conditions were not fulfilled, which
prevented the obligations therein from
obtaining obligatory force.
BABASA V CA
Facts: A contract of conditional sale of
registered lands was executed between
the spouses Babasa and Tabangao
Realty. Since the title is named to a third
person it there are agreed stipulation as
to the payment thereof. Tabangao leased
the lots to Shell. 2 days prior to the
expiration of the 20month period, Babasa
asked for indefinite extension Tabangao
refuse so Babasa executed a rescission.
Issue: W/N there was a contract of
absolute sale between them.
Held:
YES.
Although
denominated
conditional sale of registered lands the
contract between the spouses and
Tabangao is one of absolute sale.
Constructive delivery was accomplished
upon the execution of the contact
without any reservation of title on the
part of the Babasa.
VALDEZ V CA
Facts: Valdez spouse were owners of a
parcel of land. Josefina subdivided the
property and executed a SPA to his son
to sell a portion thereof to Jose Lagon

without knowledge his son entered into a

different contract. Lagon failed to pay to
which Valdez refused to deliver the
torrens title. Josefina sold the lots to
another. Lagon filed a complaint.
Issue: W/N the agreement was
contract of sale of contract to sell

Held: It is a contract of sale the nature of

the contact must be inferred from the
express terms and agreement and from
the contemporaneous and subsequent
acts of the parties. Although the son
entered into a different agreement it was
ratified the moment Josefina accepted
the down payment.
DIGNOS V CA
Facts: Diognos owned a parcel of land
and sold to Jabil payable in 2
installments. However Dignos also sold
the same parcel of land to Cabigas. A
deed of absolute sale to Cabigas was
executed.
Issue: W/N the contract is a contract of
sale
Held: YES. A deed of sale is absolute in
nature although denominated as a Deed
of Conditional Sale where nowhere in
the contract in question is a proviso or
stipulation to the effect that title to the
property sold is reserved in the vendor
until full payment of the purchase price,
nor is there a stipulation giving the
vendor the right to unilaterally rescind
the contract the moment the vendee fails
to pay within a fixed period. In the
present case, there is no stipulation
reserving the title of the property on the
vendors nor does it give them the right
to unilaterally rescind the contract upon
non-payment of the balance thereof
within a fixed period.

UNIVERSITY OF THE PHILIPPINES V

DELOS ANGELES
Facts: UP and ALUMCO entered into a
logging agreement. ALUMCO incurred an
unpaid amount so UP wants to rescind
the
contract.
They
executed
an
instrument Acknowledgment of debt &
proposed manner of payment. ALUMCO
agreed to give the right to consider the
agreement
however
ALUMCO
still
incurred unpaid accounts. UP rescinded
the contract.
Issue: W/N UP can validly rescind its
agreement even without court order.
Held: YES. UP can unilaterally rescind
the agreement. There is nothing in the
law prohibiting the parties from entering
into agreements that violation of terms
of the contract would cause its
cancellation
even
without
court
intervention. Up was able to show a
prima facie case of breach of contract
and default payment by ALUMCO.
PALAY INC V CLAVE
Facts: Palay executed in favor of Dumpit
a contract to sell a parcel of land with
9% interest payable with a down
payment and monthly installment there
was a written notice of rescission. Par 6
of the contract provides for automatic
rescission.
Issue: W/N demand is necessary to
rescind a contract.
Held: A written notice is indispensable to
inform the defaulter of the rescission as
a consequence of the rescission of the
contract, right to the lot should be
restored to Dumplit or the same should
be replaces.

LIM V. CA
Facts: Orlinos mortgaged a parcel of land
to Progressive Commercial Bank as a
security of a loan. They failed to pay and
the mortgage was foreclosed. The bank
transferred its rights to Pacifico Banking
Corp.
Orlinos
who
remained
in
possession filed to redeem the property.
After the negotiation PBC sold the land to
Lim. Orlinos filed a complaint for
annulment of the deed of sale between
PBC and Lim.
Issue: W/N the transaction between PBC
and Orlinos is a contract to sell or a
contract of sale.
Held: Contract to sell. There as no
immediate transfer of title to the Orlinos
as would have happened if there had
been a sale. Thus, the property was
legally unencumbered and still belonged
to PBC when it was sold to Lim.
AFP MUTAL BENEFIT ASSN INC V CA
Facts: Investco inc and solid homes
entered into a contract to sel. During this
time the titles has not been transferred.
Thus, Investco merely agreed to sell.
Solid Homes Inc. reneged or defaulted on
its obligation. Thus Investco rescinded.
Issue: W/N Investo properly rescinded its
contract to sell and but with Solid.
Held: YES. Upon the failure of Solid to
comply there was no need to judicially
rescind the contract.
CONDITIOS AND WARRANTIES
LA FORTEZA V MACHUCA
Facts: Under a SPA given by the heirs of
Laforteza
to
Robert
and
Gonzalo
Laforteza
they
entered
into
a
Memorandum
of
agreement
with

Machuca over the property. Par 4 of the

Memorandum contained a provision that
upon issuance of the new title Machuca
shall be notified in writing and pay within
30 days the remaining balance. Upon
failure of MAchuca to pay the balance
Laforteza informed the former that the
contract is rescinded.
Issue: W/N the contract is a contract of
sale or a contract to sell.
Held: Contract of sale and lease. the
MOA shows that the transaction was one
of sale and lease. In the case, there was
a perfected agreement between the
petitioner and respondent. All the
elements of a contract of sale were
present.
HEIRS OF PERDO ESCANLAR V CA
Facts: The heirs of Cari-an executed a
deed of sale of right interest and
participation over the parcel of land in
favor of the heirs on escanlar. Under the
agreement it shall only become effective
upon the approval of the CFI of Negros
Occidental. The heirs of Escanlar
defaulted but the heirs of cari-an never
demanded payment. They later sold the
land to Chuas.
Issue: W/N the deed of sale to escanlar
is valid.
Held: YES. There is a distinction between
the validity and effectively was made
subject to the condition. The requisites
are present for a valid contract. the act
of the vendors in continuing to accept
payment the heirs of escanlar must be
preferred as it is valid and subsisting
one.
POWER
COMMERCIAL
INDUSTRIAL CORP V CA

AND

Facts: Power entered into a contract of

sale with spouses Quiambao. Deed of
absolute sale with assumption of
mortgage was executed. Power failed to
settle thereafter Power sought to rescind
the contract.
Issue: W/N there was a breach of
warranty on the part of the spouses that
it would evict the lessee
Held: No. such eviction of the lessee is
not stipulated in the contract thus it is
not a condition imposed upon perfection.
Control was given to Power and its is
aware of the tenants. Since Power
undertook the risk of evicting the tenants
it cannot now claim that there was a
breach of warranty.
GUINHAWA V PEOPLE
Facts: Jaime Guinhawa sells cars. He
brought a van and such incurred an
accident. The van was repaired and
repainted he then offered it for sale in his
showroom Silo spouses purchased the
van, made payments later on it was
discovered that such van has defect or its
not brand new. Silo filed for rescission of
sale an refund.
Issue: WN there
representation.

were

fraudulent

Held: YES. Art 1389 provides that failure

to disclose fats when there is a duty to
revel them constitutes fraud. In the case,
Guinhawa knew that the van was
damaged and made it appear to be brand
new. If, in a contract of sale, the vendor
knowingly allowed the vendee to be
deceived as to the thing sold in a
material matter by failing to disclose an
intrinsic circumstance that it vital to the
contract, knowing that the vendee is
acting upon the presumption that no
such fact exists, deceit is accomplished
by the suppression of the truth.

ANG V CA
Facts: Under a car swapping scheme
Soledad sold his car to Ang by Deed of
Absolute Sale. Ang later offered the sale
of the car, Bugash bought the car, but
before registration in Bugash name the
vehicle was seize by writ of replevin on
account of failure of Panes the owner of
the car prior to Soledad to pay the
mortgaged. Ang paid the BA finanace,
Soledad refuse to reimburse.
Issue: W/N the complaint had prescribed
hinges on a determination of what kind
of warranty is provided in the deed of
absolute sale
Held: YES. A warranty is a statement or
representation made by the seller of
goods, contemporaneously and as part of
the contract of sale having reference of
the character quality or title of the goods
and by which he promises or undertakes
to insure that certain facts are or shall be
as he them represents.
NUTRIMIX FEEDS CORP VS CA
Facts: Evangelista spouses purchased
feeds from Nutrimix. They refuse to pay
their unsettled debt claiming that their
livesotcks were poisoned by Nutrimix
feeds. Nutrimix filed for collection of sum
of money evangelista counted the suit.
Issue: W/N Nutrimix should he held
liable for the death of the livestocks.
Held: NO. in alleging that there was a
violation of warranty against hidden
defects, the spouses assumed the burden
of proof. However they failed to
overcome. Under the law the defect must
exist at the time of the sale was made
and at the time the product left the
hands of the seller which the spouses
failed to prove. Therefore, the spouses
are liable for their debt.

EXTINGUISMENT OF SALE

they failed to do so. Failure to redeem

automatically consolidates ownership in
favor of the vendee.

ROBERTS V PAPIO
SOLID HOMES INC VS CA
Facts: Spouses Papio they executed a
real estat mortgage. Upon failure to pay
the loan, the corporation filed a petition
for the extra judicial foreclosure of the
mortgage. They subsequently executed a
deed of absolute sale over the property
in favor of Amelia Roberts. A new TCT
was issued to Roberts as owner. Papio
paid the rentals for a year but later on
failed to pay but still remained in
possession of the property. Roberts
demanded payment and eviction.
Issue: W/N the deed of absolute sale and
contract of lease executed is an equitable
mortgage over the property.
Held: NO. An equitable mortgage is one
that although lacking in some formality,
form or words or other requisites
demanded by the statute nevertheless
revels the intention of the parties to
change a real property as security for a
debt and contain nothing impossible or
contrary to law.
MISTERIO V CEBU STATE COLLEGE
OF SCIENCE AND TECHNOLOGY
Facts: Asuncion sold to SAHS a parcel of
land reserving the right to repurchase in
case the school, cease to exist or transfer
location. SAHS merged with Cebu State
College. The heirs of Asuncion sought to
exercise their right to redeem, claiming
the school has ceased to exist.
Issue: W/N the heirs of Asuncion may
still redeem
Held: NO. Their right has already
prescribed considering that no period for
redemption was agreed upon, the law
imposes a 4-year limitation. However

Facts: Solid homes executed in favor of

State financing center a real estate
mortgage on its properties in order to
secure payment of a loan. A year later
Solid applied for additional loan. When
the
obligation
became
due
and
demandable, Solid failed to pay. State
financing foreclosed the property.
Issue: W/N The memorandum of
agreement/ dacio en pago executed by
the parties is valid and binding.
Held:
YES.
The
Memorandum
of
Agreement /Dacion En Pago was valid
and binding, and that the registration of
said instrument in the Register of Deeds
was in accordance with law and the
agreement of the parties. Solid homes
utterly failed to prove that respondent
corporation had maliciously and in bad
faith caused the non-annotation of
petitioners right of repurchase so as to
prevent the latter from exercising such
right.
A. FRANCISCO REALTY V CA
Facts: Francisco realty granted a loan in
favor of spouses Javillonar, and execured
3 documents, a PN, deed of mortgage
over the property, undated deed of sale.
Since the spouses allegedly failed to
comply petitioner registered the sale in
its favor. Petitioner demanded the
possession of the property and payment
of interest.
Issue: W/N the sale was considered as
an equitable mortgage.
Held: The transfer was in the nature of
pactum commissorium, since the sale

was really considered as an equitable

mortgage. It was really intended by the
spouses to make such undated deed of
sale a security. Also, when petitioners
transferred the title in its name, the
spouses was never informed of such
action. Such transfer was therefore void,
making the TCT held by petitioners null
and void as well.

making the redemption shall be counted

from notice in writing by the vendor it
makes sense to require that notice be
given by the vendor and nobody else,
since the vendor of an undivided interest
is in the best position to know who are
his co-owners, who under the law must
be notified of the sale.
SORIANO V BAUTISTA

ABILLA V GOBONSENG
Facts:
Abilla
institured
against
Gobonseng
an
action
for
specific
performance, recovery of sum of money
and damages, reimbursement of the
expenses they incurred for the 2
instrument deed of sale and option to
buy. Gobonseng contended that such
transaction was covered in a mortgage.
Issue: W/N Gobonseng may exercise the
right to repurchase

Facts: Bautista mortgaged their lot to

Soriano, who took possession thereof.
Par 5 of their agreement Soriano decided
to but the lot. Bautista refused claiming
that being mortgagors, they cannot be
deprived of their right to redeem the
property.
Issue: W/N Soriano
mortgaged property

may

buy

the

Held: NO. Sellers is a sale judicially

declared as pacto de retro may not
exercise the right to repurchase within
the 30-day period provided under Art
1606.

Held: YES. Although the transaction is a

mortgage with a customary right of
redemption the mortgagors right to
redeem was rendered defeasible at the
election of the mortgagees under Par 5
allowing them the option to purchase the
said lot.

FRANCISCO V BOISER

ASSIGNMENT

Facts: Francisco sold 1/5 of their

undivided share to their mother Adela
Blas. 7 years later Adela sold her 1/5
share to Boiser. Adalia received summons
from Zenailda demanding her share in
the rentals. Adalia informs her that she
was exercising her right of redemption as
co owner. Adalia institutes a complaint
demanding redemption of the property
under Art 1623.

NYCO SALES CORP V BA FINANCE

Issue: W/N the leeter demand can be

considered as sufficient compliance with
the notice requirement of Art 1623
Held: The text of Art 1623 clearly and
expressly prescribes that the 30 days for

Facts:
Nyco
extended
a
credit
accommodation
to
the
Fernandez
brothers. Francisco brothers acting in
behalf of Sanshell Corp discounted a BPI
check for 60k with Nyco which was
indorsed to BA finance. BPI check was
dishonored. BA finance goes after Nyco.
Issue: W/N Nyco is liable fro breach of
warranties.
Held: YES. Nyco warrants
existence and legality of the
well as the solvency of the
there is a breach of any

both the
credit, as
debtor. If
of the 2

warranties the assignor is liable to the

assignee.
LICAROS V GATMAITAN
Facts: Licaros invested his money with
Anglo Asean Bank. He had a hard time
getting back his investment he sought
the help of Gatmaitan. They entered into
an agreement, PN was executed in favor
of Licaros and Gamaitan. Because of the
inability to collect, Gatmaitan did not
bother to pay Licaros the value of the PN.
Licaros demanded payment,
Issue: W/N the memorandum is one of
assignment of credit or one conventional
subrogation
Held:
Conventional
subrogation.
Subrogation of credit has been defined as
the transfer of all the rights of the
creditor to a third person, who
substitutes him in all his rights. It
requires that all the related parties
thereto, the original creditor, the new
creditor and the debtor, enter into a new
agreement, requiring the consent of the
debtor of such transfer of rights. In the
case at hand, it was clearly stipulated by
the parties in the memorandum of
agreement that the express conformity
of the third party (debtor) is needed.
BULK SALES LAW
CHIN V UY
DOCTRINE: A sale made of all the effects
in the vendor's store without the buyer
being furnished a sworn list of creditors
as required by Sec 3, is null and void
irrespective of the good or bad faith of
the buyer, and judgment creditors may
treat such sale as never having been
made and proceed to have execution
levied on the properties thus sold.
DBP VS HON JUDGE OF RTC OF
MANILA

Facts:
Pioneer Glass Manuc
Corp
purchased from Yu. However Pioneer
failed or refused to pay upon demand.
Without informing Yu, Pioneer Glass
transferred all its assets to DBP. DBP sold
these assets to Union Glass. Yu instituted
an action against PG, DBP, UG.
Issue: W/N the Bulk Sales Law covers
the conveyance in question
Held: NO. Under the Bulk Sales Law, the
term goods and merchandise have
acquired a fixed meaning, refer to things
and articles, which are kept for sale by a
merchant. Pioneer Glass manufactured
glass only on specific orders thus it is not
a merchandiser. Pioneer Glass should pay
Yu.
RETAIL TRADE LIBERALIZATION ACT
OF 2000 AND RELATED PROVISIONS
OF THE ANTI DUMMY LAW
KING V HERNAEZ
Facts: King owned a grocery store. He
sought the permission of the President to
retain the services but was denied under
Retail Trade Law and Anti Dummy Law.
Issue: W/N the employment of the 3
chinamen is covered under Anti Dummy
law
Held: YES. The prohibition covers the
entire range of employment, regardless
of whether they are control of non
control positions.
BALMACEDA V UNION CARBIDE PHIL
Facts: Union was a manufacturer having
divisions: the Consumer products and
Industrial products.
Issue: W/N th industrial
engaged in retail business

product

is

Held: NO. Retail pertains to the direct

selling
to
the
general
public
of
merchandise of goods for consumption.
The products sold under the division is
not covered by the term consumption
goods.
GOODYEAR TIRE V REYES SR
Facts: Goodyear a corporation was
engaged in the manufacturing and sale
of rubber products.
Issue: W/N Goodyear is covered by the
Retail Trade Law
Held: NO. Retail pertains to the direct
selling
to
the
general
public
of
merchandise of goods for consumption. A
manufacturer who sells his products to
industrial and commercial users so that
the latter may use the same to render

some general service to the public is

clearly not covered by the prohibition.
DBP V HON JUDEGE OF RTC OF
MANILA
Facts: Pioneer purchased from Yu
equipment parts, Pioneer failed or
refused to pay upon demand. Pioneer
transferred all its asset to DBP. DBP sold
it to Union Glass. Yu instituted an action
against Pioneer, DBP and Union glass.
Issue: W/N Pioneer is a merchandiser
covered under the Retail Trade Act
Held: No. There was an undisputed
evidence
that
Pioneer
Glass
manufacturers glass only on specific
orders and does not sell directly to
consumers. As such Pioneer is not a
merchandiser.