Villanueva v CA and Ildefonso Ong and PVB

Cause of Contracts
Facts: The two parcels of land were originally owned by the Villanuevas. They obtained a loan from PVB (Philippine Veterans Bank) in
exchange of the lands as collaterals. PVB offered a higher amount of loan if one of the Villanueva spouses will execute a Deed of Sale of
those lands. She did execute, even without the signature of his spouse who sojourned in the US at the time. After the execution, the
Villanueva wife did not get anything from PVB. She attempted to contact the officer in PVB but to no avail it proved futile. ( Kung kailan

mahal mo na tyaka ka niya iiwan. Aba bigti na !) The Villanueva wife found out later that the titles were issued in the name of PVB. So she
inquired the Registry of Deeds what happened. ( Ganyan naman talaga eh, you only start inquiring where you went wrong when she
already left you.) She found out that the original titles were canceled and were reissued to the officer of PVB. ( Ang kapal ng mukha,
sinaktan ka na nga, aangkinin pa kung ano nalang ang natira sayo .) Not only that, what were issued to the officer of PVB were again
canceled and reissued to Andres Sebastian. ( Ang mundo ay isang malaking Quiapo. Maraming snatcher. Maagawan ka. Lumaban ka!)
Lastly, the titles were canceled because of Andres Sebastians failure to pay the loan and reissued in the name of PVB.
So kelan eeksena si Ong?
Facts: Ong offered to purchase two pieces of Land that had been acquired by PVB through foreclosure . He deposited P10,000. (Sigurista si
Intsik). A month later while Ong was still abroad, PVB approved his subject offer. Among the conditions imposed by PVB is that: "The
purchase price shall be P110,000.00 (Less deposit of P10,000.00) payable in cash within fifteen (15) days from receipt of approval of the
offer." When appellant returned to the country, he immediately verified the status of his offer with the PVB, now under the control of CB,
where he was informed that the same had already been approved. On 16 April 1985, appellant formally informed CB of his desire to pay the
subject balance provided the bank should execute in his favor the corresponding deed of conveyance. The letter was not answered.
(Ganyan ba talaga? Is silence a sign of cheating?)
Ong sent follow-up letters that went unheeded. (Aray. Ang sakit teh.) Ong then, through his counsel, sent a letter to CB demanding for the
latter to execute the corresponding deed of conveyance in favor of appellant. CB did not bother to answer the same. Hence, the instant case.
Hindi pa tapos si Villanueva wife.
Later, the Villanueva wife filed her claim with the liquidation court. (PVB has its assets being liquidated for its absorption by CB.) She averred,
among others, that she is the lawful and registered owner of the subject lots which were mortgaged in favor of the PVB thru the falsification
committed by PVB officer, in collusion with Andres Sebastian; that upon discovering this fraudulent transaction, she offered to purchase the
property from the bank; and that she reported the matter to the PC/INP Criminal Investigation Service Command, Camp Crame, and after
investigation, the CIS officer recommended the filing of a complaint for estafa through falsification of public documents against PVB officer
and Andres Sebastian. She then asked that the lots be excluded from the assets of the PVB and be conveyed back to her.
Issue: Do petitioners (The Villanueva spouses) have a better right than private respondent Ildefonso Ong to purchase from the Philippine
Veterans Bank (PVB) the two parcels of land?
Held:
(Spoiler Alert)
RTC: Ruled in favor of Villanuevas
CA: Ruled in favor of Ong
SC: Ruled in favor of the Villanuevas
Reason:
When Ong was transacting with PVB, PVB was already filing for liquidation as a result of insolvency. In a nutshell, the insolvency of a bank
and the consequent appointment of a receiver (CB) restrict the bank's capacity to act, especially in relation to its property.
There is no doubt that the approval of Ong's offer constitutes an acceptance, the effect of which is to perfect the contract of sale upon notice
thereof to Ong. Ong did not receive any notice of the approval of his offer. It was only sometime in mid-April 1985 when he returned from the
United States and inquired about the status of his bid that he came to know of the approval.
The contract is not yet perfected at any time before acceptance is conveyed ; hence, the disappearance of either party or his loss of
capacity before perfection prevents the contractual tie from being formed. Applying Article 1323 of the Civil Code , Ong's offer to purchase

the subject lots became ineffective because the PVB became insolvent before the bank's acceptance of the offer came to his
knowledge. Hence, the purported contract of sale between them did not reach the stage of perfection.

ANG YU ASUNCION, ARTHUR GO AND KEH TIONG, petitioners,

vs.
THE HON. COURT OF APPEALS and BUEN REALTY DEVELOPMENT CORPORATION, respondents.
Cause of Contracts
Facts:
Ang Yu Asuncion and Keh Tiong, et al were tenants or lessees of residential and commercial spaces owned by Bobby Cu Unjieng and Rose
Cu Unjieng (The Cu Unjieng Spouses). They have occupied said spaces since 1935 and have been religiously paying the rental and
complying with all the conditions of the lease contract. On several occasions, the Cu Unjieng spouses informed plaintiffs that they are
offering to sell the premises and are giving them priority to acquire the same; that during the negotiations, Bobby Cu Unjieng offered a price
of P6-million while plaintiffs made a counter offer of P5-million; that plaintiffs thereafter asked the defendants to put their offer in writing to
which request defendants acceded; that in reply to defendant's letter, plaintiffs wrote them on October 24, 1986 asking that they specify the
terms and conditions of the offer to sell; that when plaintiffs did not receive any reply, they sent another letter dated January 28, 1987 with the
same request; that since defendants failed to specify the terms and conditions of the offer to sell and because of information received that
defendants were about to sell the property, plaintiffs were compelled to file the complaint to compel defendants to sell the property to them.
RTC: Ruled in favor of the Cu Unjiengs but granted option to purchase property or right of first refusal to Ang Yu Asuncion, et al if property is
sold for P11 million and below.
CA: Ruled in favor of the Cu Unjiengs but granted right of first refusal only regardless of the price. (Ratio: considering the mercurial and
uncertain forces in our market economy today, must allow adjustment of prices)
While case was pending in CA, Cu Unjuengs sold property to Buen Realty and Development Corporations for P15 million. BRDC then wrote
a letter to the lessees demanding that the latter vacate the premises. Lessees wrote a reply to BRDC stating that lessees brought the
property subject to the notice of lis pendens. The lessees filed a Motion for Execution in an RTC which states that:
WHEREFORE, defendants are hereby ordered to execute the necessary Deed of Sale of the property in litigation in favor of
plaintiffs Ang Yu Asuncion, Keh Tiong and Arthur Go for the consideration of P15 Million pesos in recognition of plaintiffs' right of
first refusal and that a new Transfer Certificate of Title be issued in favor of the buyer.
It also ordered the Registry of Deeds to cancel the title of Buen Realty Corp and to issue new ones to Ang Yu Asuncion, et al.
Later, CA set aside and declared without force the decision of RTC (decision above).
Ang Yu Asuncion, et al filed for review on certiorari in SC claiming that BRDC is bound by the writ of execution of RTC.
Issue: WON Buen Realty can be held bound by the writ of execution
Held: Buen Realty can NOT be bound by the writ of execution.
Ratio: It is in this case that SC expounded the stages of a contract. Negotiation, Perfection, and Consummation. Until the contract is
perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation.
According to Art 1458, a Contract of Sale exists where one of the contracting parties obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. A contract of sale may be absolute or
conditional.
However, this is an option and not a sale. A perfected contract of option is An accepted unilateral promise which specifies the thing to be sold
and the price to be paid, when coupled with a valuable consideration distinct and separate from the price. In the law on sales, the so-called
"right of first refusal" is an innovative juridical relation but it cannot be deemed a perfected contract of sale under Article 1458 of the Civil
Code. There was no sale yet as there was no consensuality of sale between the Unjuiengs and the lessees.
The breach of the right of first refusal cannot justify an issuance of a writ of execution under a judgment that merely recognizes its
existence, nor would it sanction an action for specific performance because the element of consensuality to PERFECT the contract
is indispensable.

The right of first refusal, at best, could be remedied by a warrant of recovery for damages and not specific action . Buen Realty then,
cannot be bound by the writ of execution.
ROSARIO L. DE BRAGANZA, ET AL., petitioners,
vs.
FERNANDO F. DE VILLA ABRILLE, respondent.
Cause of Contracts
Facts:
Rosario Braganza and her sons loaned from De Villa Abrille P70,000 in Japanese war notes and in consideration thereof, promised in writing
to pay him P10,00 + 2% per annum in legal currency of the Philippines 2 years after the cessation of the war. Because they have no paid,
Abrille is sued them in March 1949. The Manila court of first instance and CA held the family solidarily liable to pay according to the contract
they signed.The family petitioned to review the decision of the CA whereby they were ordered to solidarily pay De Villa Abrille P10,000 + 2%
interest, praying for consideration of the minority of the Braganza sons when they signed the contract.

Issue:
Whether or not the boys, who were 16 and 18 respectively, are to be bound by the contract of loan they have signed.

Held:
The SC found that Rosario will still be liable to pay her share in the contract because they minority of her sons does not release her from
liability. She is ordered to pay 1/3 of P10,000 + 2% interest.
However with her sons, the SC reversed the decision of the CA which found them similarly liable due to their failure to disclose their minority.
The SC sustained previous sources in Jurisprudence in order to hold the infant liable, the fraud must be actual and not constructive. It
has been held that his mere silence when making a contract as to his age does not constitute a fraud which can be made the basis of an
action of deceit. (Compared to Mercado v Espiritu, the contract did not say that upon signing the minors assert that they are of legal age. In
the Mercado case, the minors have actively misrepresented their age by signing a contract that stated they were already of legal age upon
signing.)
The boys, though not bound by the provisions of the contract, are still liable to pay the actual amount they have profited from the loan. Art.
1340 states that even if the written contract is unenforceable because of their non-age, they shall make restitution to the extent that they may
have profited by the money received. In this case, 2/3 of P70,000, which is P46,666.66, which when converted to Philippine money is
equivalent to P1,166.67. Hence, because they still benefited from the contract, the minors are still liable.

Sps. Theis vs. CA et. Al.

This is a case of greedy (feelingon) spouses and mistake as to the subject matter of a contract.
Facts: Private respondent Calsons Development Corporation is the owner of three (3) adjacent parcels of land (parcel nos.1, 2 and 3). All
three parcels of land are situated in Tagaytay City. Adjacent to parcel no.3 is a vacant lot denominated as parcel no. 4. In 1985, Private
respondent constructed a two-srorey house on parcel no. 3 and the two other lots remained idle.
In a survey conducted in 1985, parcel no. 3 was erroneously indicated to be covered by the TCT of parcel no. 1, while the parcel no. 1 and
parcel no. 2 were mistakenly surveyed to be located on parcel no. 4 instead. Unaware of the mistake private respondent sold said parcel no.
4 to petitioners.
In 1990, petitioners discovered that parcel no. 4 was owned by another person. They also discovered that the lots actually sold to them were
parcel nos. 2 and 3. To remedy the mistake, private respondent offered parcel nos. 1 and 2 as these two were precisely the two vacant lots
which private respondent owned and intended to sell. Petitioners rejected the good faith offer. Private respondent made another offer, this
time the return of an amount double the price paid by petitioners. Petitioners still refused. Private respondent was then compelled to file an
action for annulment of deed of sale and reconveyance of the properties subject thereof in the RTC which ruled on their favor and on appeal,
the CA affirmed the same.
Ruling: Petition dismissed. CA decision affirmed.
The SC held that private respondent obviously committed an honest mistake in selling parcel no. 4. The good faith of the private respondent
is evident in the fact that when the mistake was discovered, it immediately offered two other vacant lots to the petitioners or to reimburse
them with twice the amount paid. Petitioners refused either option. Spouses insisted that they should get parcel no. 3, upon which private

respondent constructed a two-storey house, in lieu of parcel no. 4. The cost of construction in 1985 for the said house ( P1,500,000.00) far
exceeds the amount paid by the petitioners to the private respondent (P486,000.00).
This left the private respondent with no other choice but to file an action for the annulment of the deed of sale on the ground of mistake.
Ratio: To allow the petitioners to take parcel no. 3 would be to countenance unjust enrichment. Considering that petitioners intended at the
outset to purchase a vacant lot, their refusal to accept the offer of the private respondent to give them two (2) other vacant lots in exchange,
as well as their insistence on parcel no. 3, which is a house and lot, is manifestly unreasonable.
De Leon v CA
FACTS:
On October 18, 1969, private respondent Jose Vicente De Leon and petitioner Sylvia Lichauco De Leon were united in wedlock before the
Municipal Mayor of Binangonan, Rizal. On August 28, 1971, a child named Susana L. De Leon was born from this union.
Sometime in October, 1972, a de facto separation between the spouses occured due to irreconcilable marital differences, with Sylvia leaving
the conjugal home.
Sometime in March, 1973, Sylvia went to the United States where she obtained American citizenship.
On November 23, 1973, Sylvia filed with the Superior Court of California, County of San Francisco, a petition for dissolution of marriage
against Jose Vicente. In the said divorce proceedings, Sylvia also filed claims for support and distribution of properties. It appears, however,
that since Jose Vicente was then a Philippine resident and did not have any assets in the United States, Sylvia chose to hold in abeyance the
divorce proceedings, and in the meantime, concentrated her efforts to obtain some sort of property settlements with Jose Vicente in the
Philippines.
On March 16, 1977, Sylvia succeeded in entering into a Letter-Agreement with her mother-in-law , private respondent Macaria De
Leon,
On the same date, Macaria made cash payments to Sylvia in the amount of P100,000 and US$35,000.00 or P280,000.00, in compliance
with her obligations as stipulated in the aforestated Letter-Agreement.
On March 30, 1977, Sylvia and Jose Vicente filed before the then Court of First Instance of Rizal a joint petition for judicial approval of
dissolution of their conjugal partnership
RTC: WHEREFORE, it is hereby declared that the conjugal partnership of the Spouses is DISSOLVED
ISSUE: Whether or not the Letter-Agreement is valid
HELD: The letter-agreement is invalid.
The cause or consideration for the intervenor Macaria De Leon in having executed Exhibits 'E' to 'E-2' was the termination of the marital
relationship between her son Jose Vicente De Leon and Sylvia Lichauco de Leon.
Intervenor's undertaking under Exhibit 'E' premised on the termination of marital relationship is not only contrary to law but contrary to
Filipino morals and public Policy.
In Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs, public order, or public policy.
As such, any agreement or obligations based on such unlawful consideration and which is contrary to public policy should be deemed null
and void.
Since the Letter-Agreement was repudiated before the purpose has been accomplished and to adhere to the pari delicto rule in this case is
to put a premium to the circumvention of the laws, positive relief should be granted to Macaria. Justice would be served by allowing her to be
placed in the position in which she was before the transaction was entered into.
Article 1414 of the Civil Code, which is an exception to the pari delicto rule, is the proper law to be applied. It provides:
When money is paid or property delivered for an illegal purpose, the contract may be repudiated by one of the parties before the purpose has
been accomplished, or before any damage has been caused to a third person. In such case, the courts may, if the public interest will be
subserved, allow the party repudiating the contract to recover the money or property