CASE DIGEST: DE LEON V. ONG - G.R. NO. 170405

 CASE DIGEST: DE LEON V. ONG

De Leon vs. Ong

611 SCRA 381, G.R. No. 170405 February 2, 2010

DOCTRINES:

• In a contract of sale, the seller conveys ownership of the property to the buyer upon the perfection of the contract. Should the buyer default in the payment of the purchase price, the seller may either sue for the collection thereof or have the contract judicially resolved and set aside. The non-payment of the price is therefore a negative resolutory condition. On the other hand, a contract to sell is subject to a positive suspensive condition. The buyer does not acquire ownership of the property until he fully pays the purchase price. For this reason, if the buyer defaults in the payment thereof, the seller can only sue for damages.

• A purchaser in good faith is one who buys the property of another without notice that some other person has a right to, or an interest in, such property and pays a full and fair price for the same at the time of such purchase, or before he has notice of some other person’s claim or interest in the property. The law requires, on the part of the buyer, lack of notice of a defect in the title of the seller and payment in full of the fair price at the time of the sale or prior to having notice of any defect in the seller’s title.

FACTS:

Raymundo De Leon sold three parcels of land with improvements situated in Antipolo, Rizal to respondent Benita T. Ong for P1.1 million.

These properties were mortgaged to Real Savings and Loan Association, Incorporated (RSLAI). The contract between De Leon and Ong states that De Leon sells, transfers, conveys in a manner absolute and irrevocable, unto Ong the said properties under the terms and conditions that (1) upon full payment of Ong of the amount P415,000, De Leon shall execute and sign a deed of assumption of mortgage in favor of Ong without any further cost whatsoever; and that Ong shall assume payment of the outstanding loan of P684,500 with REAL SAVINGS AND LOAN.

Ong partially paid De Leon the P415,500. De Leon, on the other hand, handed the keys to the properties. Thereafter, Ong undertook repairs and made improvements on the properties.

Subsequently, Ong learned that petitioner again sold the same properties to one Leona Viloria. Ong filed a Complaint against De Leon and Viloria in the RTC. Ong claimed that since De Leon had previously sold the properties to her, he no longer had the right to sell the same to Viloria. And that they entered into a contract of sale. De Leon, on the other hand, insisted that he entered into a contract to sell since the validity of the transaction was subject to a suspensive condition, that is, the approval by RSLAI of Ong’s assumption of mortgage.

RTC ruled in favor of De Leon. CA reversed and declared the second sale void.

ISSUES:

(1) Was the contract between De Leon and Ong a contract of sale, or a contract to sell? (2) Was the subsequent sale to Viloria valid?

HELD:

(1)

Clearly, it was a contract of sale the parties entered into. The deed executed by the parties stated that petitioner sold the properties to respondent "in a manner absolute and irrevocable" for a sum of P1.1 million. Nothing in said instrument implied that petitioner reserved ownership of the properties until the full payment of the purchase price.

Petitioner executed a notarized deed of absolute sale, which is equivalent to the delivery of a thing sold (Art. 1498 CC), in favor of respondent. The totality of petitioner’s acts clearly indicates that he had unqualifiedly delivered and transferred ownership of the properties to respondent.

(2)

This case involves a double sale as the disputed properties were sold validly on two separate occasions by the same seller to the two different buyers in good faith.

Article 1544 of the Civil Code provides:

“Article 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.”

In this instance, petitioner delivered the properties to respondent when he executed the notarized deed and handed over to respondent the keys to the properties. For this reason, respondent took actual possession and exercised control thereof by making repairs and improvements thereon. Clearly, the sale was perfected and consummated on March 10, 1993. Thus, respondent became the lawful owner of the properties.

CASE DIGEST: ENGINEERING & MACHINERY CORPORATION (EMC) V. COURT OF APPEALS (CA) - G.R. NO. 52267

 CASE DIGEST: EMC V. CA

Engineering & Machinery Corporation vs. Court of Appeals

252 SCRA 156, G.R. No. 52267 January 24, 1996

DOCTRINES:

• A contract for a piece of work, labor and materials may be distinguished from a contract of sale by the inquiry as to whether the thing transferred is one not in existence and which would never have existed but for the order of the person desiring it. In such case, the contract is one for a piece of work, not a sale. On the other hand, if the thing subject of the contract would have existed and been the subject of a sale to some other person even if the order had not been given, then the contract is one of sale.

• If the parties intended that at some future date an object has to be delivered, without considering the work or labor of the party bound to deliver, the contract is one of sale. But if one of the parties accepts the undertaking on the basis of some plan, taking into account the work he will employ personally or through another, there is a contract for a piece of work

FACTS:

Engineering & Machinery Corporation (EMC) undertook to fabricate, furnish and install the air-conditioning system in Ponciano Almeda's building in Makati in consideration of P210,000.00. The system was completed in 1963 and accepted by private respondent, who paid in full the contract price.

In 1971, Almeda learned about the defects of the air-conditioning system of the building. This was confirmed by an engineer who was hired by Almeda.

On May 8, 1971, Almeda filed an action for damages against petitioner with the then CFI. The complaint alleged that the air-conditioning system installed by petitioner did not comply with the agreed plans and specifications. EMC moved to dismiss the complaint, alleging that the prescriptive period of six months had set in pursuant to Articles 1566 and 1567, in relation to Article 1571 of the Civil Code, regarding the responsibility of a vendor for any hidden faults or defects in the thing sold. Almeda countered that the contract between the parties was not a contract for sale but a contract for a piece of work. Thus, in accordance with Article 1144 of the same Code, the complaint was timely brought within the ten-year prescriptive period.

ISSUE:

Was the contract between the parties a contract of sale, or a contract of piece of work?

HELD:

Clearly, the contract in question is one for a piece of work. It is not petitioner’s line of business to manufacture air-conditioning systems to be sold “off-the-shelf.” Its business and particular field of expertise is the fabrication and installation of such systems as ordered by customers and in accordance with the particular plans and specifications provided by the customers.

Article 1713 of the Civil Code defines a contract for a piece of work thus:

By the contract for a piece of work the contractor binds himself to execute a piece of work for the employer, in consideration of a certain price or compensation. The contractor may either employ only his labor or skill, or also furnish the material.

CASE DIGEST: DINO V. COURT OF APPEALS (CA) - G.R. NO. 113564

 CASE DIGEST: DINO V. CA

Dino vs. Court of Appeals

359 SCRA 91, G.R. No. 113564 June 20, 2001

DOCTRINES:

• A contract for a piece of work, labor and materials may be distinguished from a contract of sale by the inquiry as to whether the thing transferred is one not in existence and which would never have existed but for the order of the person desiring it. In such case, the contract is one for a piece of work, not a sale. On the other hand, if the thing subject of the contract would have existed and been the subject of a sale to some other person even if the order had not been given then the contract is one of sale.

• Art. 1467. A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or procures for the general market, whether the same is on hand at the time or not, is a contract of sale, but if the goods are to be manufactured specially for the customer and upon his special order, and not for the general market, it is a contract for a piece of work.

• Art. 1713. By the contract for a piece of work the contractor binds himself to execute a piece of work for the employer, in consideration of a certain price or compensation. The contractor may either employ only his labor or skill, or also furnish the material.

FACTS:

Spouses Dino, doing business under the trade name "Candy Claire Fashion Garment" are engaged in the business of manufacturing and selling shirts. Sio is part owner and general manager of a manufacturing corporation doing business under the trade name "Universal Toy Master Manufacturing."

Spouses Dino and respondent Sio entered into a contract whereby the latter would manufacture for the former 20,000 pieces of vinyl frogs and 20,000 pieces of vinyl mooseheads at P7.00 per piece in accordance with the sample approved by the petitioners.

Sio delivered in several installments the 40,000 pieces of frogs and mooseheads. The last delivery was made on September 28, 1988. After full payment, Dino returned the 29,772 pieces of products for failing to comply with the approved sample, and demanded from Sio a refund of the purchase price of the returned goods. As respondent Sio refused to pay, Dino filed an action for collection of a sum of money in the RTC on July 24, 1989.

RTC ruled in favor of Dino. CA reversed RTC's decision and dismissed Dino's Complaint for having been filed beyond the prescriptive period.

ISSUE:

Whether the contract entered into by the parties is a contract of sale or a contract of piece of work.

HELD:

The contract between the petitioners and respondent stipulated that respondent would manufacture upon order of the petitioners 20,000 pieces of vinyl frogs and 20,000 pieces of vinyl mooseheads according to the samples specified and approved by the petitioners. Respondent Sio did not ordinarily manufacture these products, but only upon order of the petitioners and at the price agreed upon. Clearly, the contract executed by and between the petitioners and the respondent was a contract for a piece of work.

Petitioners having filed the action three months after the six-month period for filing actions for breach of warranty against hidden defects stated in Art. 1571, SC affirmed CA's decision.

CASE DIGEST: ACE FOODS INC V. MICRO PACIFIC TECHNOLOGIES - G.R. NO. 200602

 CASE DIGEST: ACE FOODS INC V. MICRO PACIFIC TECHNOLOGIES

Ace Foods, Inc. vs. Micro Pacific Technologies Co., Ltd.,

712 SCRA 679, G.R. No. 200602 December 11, 2013

DOCTRINES:

• A contract of sale is classified as a consensual contract, which means that the sale is perfected by mere consent. No particular form is required for its validity. Upon perfection of the contract, the parties may reciprocally demand performance, i.e., the vendee may compel transfer of ownership of the object of the sale, and the vendor may require the vendee to pay the thing sold.

• The very essence of a contract of sale is the transfer of ownership in exchange for a price paid or promised.

• The real nature of a contract may be determined from the express terms of the written agreement and from the contemporaneous and subsequent acts of the contracting parties.—A contract is what the law defines it to be, taking into consideration its essential elements, and not what the contracting parties call it.

• In the construction or interpretation of an instrument, the intention of the parties is primordial and is to be pursued.

• In contrast, a contract to sell is defined as a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the property despite delivery thereof to the prospective buyer, binds himself to sell the property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, i.e., the full payment of the purchase price. A contract to sell may not even be considered as a conditional contract of sale where the seller may likewise reserve title to the property subject of the sale until the fulfillment of a suspensive condition, because in a conditional contract of sale, the first element of consent is present, although it is conditioned upon the happening of a contingent event which may or may not occur.

FACTS:

MTCL sent to ACE Foods a letter-proposal for the delivery and sale of Cisco Routers and Frame Relay products. ACE Foods accepted MTCL’s proposal and accordingly issued Purchase Order for the subject products amounting to P646,464.00.

Thereafter, MTCL delivered the said products to ACE Foods. The invoice states that "title to sold property is reserved in MICROPACIFIC TECHNOLOGIES CO., LTD. until full compliance of the terms and conditions of above and payment of the price".

After the delivery and installation of the products, ACE Foods lodged a Complaint against MTCL before the RTC, praying that the latter pull out the products since MTCL breached its "after delivery services" obligations to it.

MTCL, in its Answer, denied the allegations of ACE Foods and prayed that ACE Foods be compelled to pay the purchase price, as well as damages related to the transaction.

RTC observed that the agreement between ACE Foods and MTCL is in the nature of a contract to sell. CA reversed and set aside the RTC’s ruling, and found that the agreement between the parties is in the nature of a contract of sale.

ISSUE:

Whether or not the there was a contract of sale between MTCL and ACE Foods.

HELD:

The parties have agreed to a contract of sale and not to a contract to sell. Bearing in mind its consensual nature, a contract of sale had been perfected at the precise moment ACE Foods, as evinced by its act of sending MTCL the Purchase Order, accepted the latter’s proposal to sell the subject products in consideration of the purchase price of P646,464.00. From that point in time, the reciprocal obligations of the parties already arose and consequently may be demanded.

CASE DIGEST: RECIO V. HEIRS OF AGUEDO AND ALTAMIRANO - G.R. No. 182349

 CASE DIGEST: RECIO V. HEIRS OF AGUEDO AND ALTAMIRANO

Recio vs. Heirs of the Spouses Aguedo and Maria Altamirano

702 SCRA 137, G.R. No. 182349 July 24, 2013

DOCTRINES:

• A valid contract of sale requires: (a) a meeting of minds of the parties to transfer ownership of the thing sold in exchange for a price; (b) the subject matter, which must be a possible thing; and (c) the price certain in money or its equivalent.

• Court emphasized the requirement of an SPA before an agent may sell an immovable property.

• Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.

SUMMARY OF FACTS:

Recio and Alejandro Altamirano, who represented himself as the representative of his other siblings (Altamiranos), both agreed to a contract of sale of a land located in Batangas, owned by the Altamiranos. Recio made partial payments, but when he offered to pay the remaining balance, Alejandro avoided him. Thereafter, Recio discovered that the subject land was subsequently sold to another buyer.

FACTS:

The Altamiranos offered to sell a parcel of land located in Lipa Batangas to Nena for the price of P500,000.00, but the transaction did not push through. Thereafter, Nena's son Reman Recio renewed Nena’s option to purchase the property to which Alejandro Altamirano, who introduced himself as representative of the Altamiranos, verbally agreed.

Thereafter, Reman Recio made partial payments in the total amount of P160,000.00, which were duly received and acknowledged by Alejandro. Subsequently, Reman Recio offered to pay the remaining balance of the agreed purchase price of the subject property in the amount of P340,000.00, but Alejandro kept on avoiding the petitioner. Because of this, the petitioner demanded from the Altamiranos, through Alejandro, the execution of a Deed of Absolute Sale in exchange for the full payment of the agreed price.

Thus, on February 24, 1997, the petitioner filed a complaint for Specific Performance with Damages. However, thereafter, the petitioner discovered that the subject property has been subsequently sold to Lauro and Marcelina Lajarca (Spouses Lajarca).

RTC declared the subsequent sale to spouses Lajarca null and void.

CA declared the deed of absolute sale between the Altamiranos and the Spouses Lajarca valid only insofar as the aliquot shares of the other Altamiranos are concerned.

ISSUE:

Whether or not the previous and subsequent contracts of sale are both valid.

HELD:

Yes.

A valid contract of sale requires: (a) a meeting of minds of the parties to transfer ownership of the thing sold in exchange for a price; (b) the subject matter, which must be a possible thing; and (c) the price certain in money or its equivalent. All said elements were present in both contracts of sale, thus both are valid.

As to the contract of sale between Recio and Alejandro, the determinate subject matter is the lot covered under TCT No. T-102563. The price was P500,000.00. It cannot be denied that the oral contract of sale entered into between Recio and Alejandro was valid, but only as to Alejandro's aliquot share of the subject property is concerned because he did not have an SPA to represent his other siblings who did not agree to sell their property.

The Role of Filipino Lawyers in Protecting and Promoting Human Rights in the Country

I. Introduction

    This is a brief study about Human Rights and the role of the legal profession in upholding the same. It answers the question: “What is the role of the Filipino lawyers in protecting and promoting human rights in a country where authorities disregard due process, and abuse their limited powers?” And explains why the practice of law is necessary in protecting and promoting the fundamental rights of the people.

II.

Human Rights in a Nutshell

    Human rights are rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status. Human rights refer to those rights which pertain to all persons and are possessed by every individual because they are human.

    In the case of Simon, Jr. v. Commission on Human Rights, G.R. No. 100150, January 5, 1994, the Supreme Court said that:

“The Universal Declaration of Human Rights, or more specifically, the International Covenant on Economic, Social and Cultural Rights and International Covenant on Civil and Political Rights, suggests that the scope of human rights can be understood to include those that relate to an individual’s social, economic, cultural, political and civil relations. It thus seems to closely identify the term to the universally accepted traits and attributes of an individual, along with what is generally considered to be his inherent and inalienable rights, encompassing almost all aspects of life.”

    Human rights, despite being inherent, are also enshrined in the Constitution. The fundamental law also provides for the idea of human dignity as related to human rights, as seen in Article II, Section 11, to wit:

    “The State values the dignity of every human person and guarantees full respect for human rights”

    The Universal Declaration of Human Rights enshrines the principles of equality, presumption of innocence, the right to a fair and public hearing by an independent and impartial tribunal, and all the guarantees necessary for the defence of everyone charged with a penal offence.

    The Bill of Rights generally provides protection to the people's fundamental rights, such as right to life, against government's abuse of power. But, to protect such rights, individuals in a society must necessarily agree to accept rules from legitimate authority in exchange for security, economic advantage, and peaceful society.

III.

The Problem in the System

    People living in a society have fundamental rights. Though to enjoy these rights, they should necessarily obey the laws and follow the rules in their society. Laws define and give limits to the powers of the government. One of the government's primary mandate is to protect the people.

    However, in the Philippines, many authorities disregard due process, and disrespect the people's right to life. Extrajudicial killings spread across the country like wild fire, and the sad thing is that the government turns its blind eye.

    In a system that is corrupted with authorities and leaders who abuse their powers, who shall help maintain the balance between the right of the people and the powers of the government? In a country where due process is taken for granted, who shall uphold justice and fair play? to Who shall champion the persons whose rights are oppressed by the government? Who shall protect the human rights?

III.

The Legal Profession

    The origin of legal profession can be traced from Greece and Rome. Then, in Athens, there was a rule that individuals should plead their own cases. But this practice was eventually changed by the increasing need of the people who ask for help from their knowledgeable friends and relatives.

    In the Philippines, The Supreme Court held in the case of Cayetano v. Monsod, G.R. No. 100113 (1991) that “the practice of law is any activity, in or out of court, which requires the application of law, legal procedure, knowledge, training and experience. It is to give notice or render any kind of service, which device or service requires the use in any degree of legal knowledge or skill.”

    The practice of law is a privilege. There are duties and responsibilities imposed by law, that must be fulfilled. One of which is the duty to maintain allegiance to the Republic of the Philippines and to support the Constitution and obey the laws of the Philippines, as provided by the Code of Professional Responsibility.

    A lawyer is, first and foremost, an officer of the court. Accordingly, should there be a conflict between his duty to his client and that to the court, he should resolve the conflict against the former and in favor of the latter, his primary responsibility being to uphold the cause of justice [Cobb Perez v. Lantin, G.R. L-22320 (1968)].

    A lawyer must be a disciple of truth. While a lawyer has the solemn duty to defend his client’s cause, his conduct must never be at the expense of truth. [Young v. Batuegas, A.C. 5379 (2003)].

    It should be stressed that the primary consideration must be public service. Lawyering is not a business; it is a profession in which duty to public service, not money, is the primary consideration (Burbe v. Magulta, A. C. 99-634). Thus, lawyers primary consideration in entering the law profession must be to help those who are in need of legal service.

    Also, according to the Supreme Court in the case of Aguirre v. Rana, B.M. 1036 (2003), “the practice of law is a privilege bestowed only to those who are morally fit. A bar candidate who is morally unfit cannot practice law even if he passes the bar examinations.”

    One of the Requisites for the practice of law is for the lawyer to have a Good moral character and no charges involving moral turpitude. The purposes for this requirement is to protect the public, as held in Dantes v. Dantes, A.C. 6486 (2004).

IV.

The Role of the Filipino Lawyers in Protecting and Promoting Human Rights in the Country

    The legal system affects our society in many ways, and lawyers contribute to the growth and freedom of society.

    Lawyers perform a critical role in the promotion of human rights, and social order by the proper administration of due process. They represent persons in trials, and promote justice. They keep a role that only a few have the advantage and privilege to take.

    In a way, attorneys give people security to pursue their life goals knowing someone will have their back and defend them if they need it. Without lawyers, people who don't know their rights are more to be taken advantage of by the people who hold and cling to power. They provide legal counsel to victims of human rights violations, and help guarantee a fair trial in court. They accept the challenge and danger in the profession, despite their primary consideration being public service, and not money.

    Filipino lawyers also have the role to teach the next generation of lawyers not only the knowledge in law and jurisprudence, but also how to practice the same in real life. They must spread the perspective of practicing law with excellence, and honesty.

    In light of the foregoing, it may be concluded that the purpose of the legal profession is to uphold the laws of the land, and one of the major role of the Filipino lawyers is to fight for the rights of the people, and represent them in court.

    Lawyers must be vigilant in protecting the Constitution and must not act passively in fighting for the rights of the people. They are the sword and shield of justice that help maintain the balance between the rights of the people and the powers of the government. They must frown upon the face of corruption, tyranny, and bad government, and must demand for the enforcement and application of due process.

    With all said, the Filipino lawyers must always be on the side of justice and truth. They are the people who are equipped with the necessary skills and knowledge to champion the people who are incapable of defending their rights, and to protect them from injustice. They are selected to support the constitution, serve the public, and uphold the cause of justice.

CASE DIGEST: PHILEX MINING CORP. V. CIR - G.R. NO. 125704

 CASE DIGEST: PHILEX MINING CORP. V. COMMISSIONER OF INTERNAL REVENUE (CIR)

PHILEX MINING CORP. v. CIR

GR No. 125704, August 28, 1998

294 SCRA 687

DOCTRINE:

Taxes cannot be subject to compensation for the simple reason that the government and the taxpayer are not creditors and debtors of each other; Debts are due to the Government in its corporate capacity, while taxes are due to the Government in its sovereign capacity. Philex Mining Corporation vs. Commissioner of Internal Revenue, 294 SCRA 687, G.R. No. 125704 August 28, 1998

FACTS:

Petitioner Philex Mining Corp. assails the decision of the Court of Appeals affirming the Court of Tax Appeals decision ordering it to pay the amount of P110.7 M as excise tax liability for the period from the 2nd quarter of 1991 to the 2nd quarter of 1992 plus 20% annual interest from 1994 until fully paid pursuant to Sections 248 and 249 of the Tax Code of 1977. Philex protested the demand for payment of the tax liabilities stating that it has pending claims for VAT input credit/refund for the taxes it paid for the years 1989 to 1991 in the amount of P120 M plus interest. Therefore these claims for tax credit/refund should be applied against the tax liabilities.

ISSUE:

Can there be an off-setting between the tax liabilities vis-a-vis claims of tax refund of the petitioner?

HELD:

No. Philex's claim is an outright disregard of the basic principle in tax law that taxes are the lifeblood of the government and so should be collected without unnecessary hindrance. Evidently, to countenance Philex's whimsical reason would render ineffective our tax collection system. Too simplistic, it finds no support in law or in jurisprudence.

Taxes cannot be subject to compensation for the simple reason that the government and the taxpayer are not creditors and debtors of each other. There is a material distinction between a tax and debt. Debts are due to the Government in its corporate capacity, while taxes are due to the Government in its sovereign capacity.

There can be no off-setting of taxes against the claims that the taxpayer may have against the government. A person cannot refuse to pay a tax on the ground that the government owes him an amount equal to or greater than the tax being collected. The collection of a tax cannot await the results of a lawsuit against the government.

It must be noted that a distinguishing feature of a tax is that it is compulsory rather than a matter of bargain. Hence, a tax does not depend upon the consent of the taxpayer.