RUDOLF LIETZ, INC., G.R. No.

122463

Petitioner, 

- versus- PUNO, J.,

Chairman, AUSTRIA-MARTINEZ,

CALLEJO, SR.,

THE COURT OF APPEALS, TINGA, and

AGAPITO BURIOL, TIZIANA CHICO-NAZARIO, JJ.

TURATELLO & PAOLA SANI,

Respondents.

Facts: Respondent Agapito Buriol previously owned a parcel of unregistered land situated at Capsalay
Island, Port Barton, San Vicente, Palawan. On August 15, 1986, respondent Buriol entered into a lease
agreement with Flavia Turatello and respondents Turatello and Sani, all Italian citizens, involving one (1)
hectare of respondent Buriols property. The lease agreement was for a period of 25 years, renewable
for another 25 years. The lessees took possession of the land after paying respondent Buriol a down
payment of P10,000.00. The lease agreement, however, was reduced into writing only in January 1987.

On November 17, 1986, respondent Buriol sold to petitioner Rudolf Lietz, Inc. the same parcel
of land for the amount of P30,000.00.

The Deed of Absolute Sale embodying the agreement described the land as follows:

 A parcel of land, consisting of FIVE (5) hectares, more or less, a portion of that parcel of land declared in
the name of Agapito Buriol, under Tax Declaration No. 0021, revised in the year 1985, together with all
improvements thereon, situated at the Island of Capsalay, Barangay Port Barton, municipality of San
Vicente, province of Palawan which segregated from the whole parcel described in said tax declaration,
has the following superficial boundaries: NORTH, Sec. 01-017; and remaining property of the vendor;
EAST, by Seashore; SOUTH, 01-020; and WEST, by 01-018 (now Elizabeth Lietz)

Petitioner later discovered that respondent Buriol owned only four (4) hectares, and with one
more hectare covered by lease, only three (3) hectares were actually delivered to petitioner.

Petitioner instituted on April 3, 1989 a complaint for Annulment of Lease with Recovery of
Possession with Injunction and Damages against respondents and Flavia Turatello before the RTC.

Issue: whether or not petitioner is entitled to the delivery of the entire five hectares or its equivalent
Held: No. Petitioner’s contention that Art. 1539 will apply is untenable. As correctly noted by the
trial court and the Court of Appeals, the sale between petitioner and respondent Buriol involving the
latters property is one made for a lump sum. The Deed of Absolute Sale shows that the parties agreed on
the purchase price on a predetermined area of five hectares within the specified boundaries and not
based on a particular rate per area. In accordance with Article 1542, there shall be no reduction in the
purchase price even if the area delivered to petitioner is less than that stated in the contract. In the
instant case, the area within the boundaries as stated in the contract shall control over the area agreed
upon in the contract.
DOLORES SALINAS, assisted by her husband, JUAN CASTILLO,

Petitioner,

- versus -

SPS. BIENVENIDO S. FAUSTINO and ILUMINADA G. FAUSTINO,

Respondents.

Facts: Bienvenido S. Faustino purchased from his several co-heirs, including Benjamin Salinas and
Dolores Salinas, their respective shares to a parcel of land consisting of 1,381 sq. m.

Faustino and his wife filed before the Regional Trial Court (RTC) a complaint for recovery of
possession with damages against Salinas alleging that she is occupying part of former‘s land. Salinas
contended that her signature on the Deed of Sale was forged and she paid the taxes due on the land she
is occupying. The RTC dismissed the complaint. On appeal, the Court of Appeals (CA) modified the RTC
decision and concluded that Faustino owned only 753 sq. m. of the land.

Issue: Whether or not a description of a lot area can be used as evidence for purchase and ownership
of the lot

Held: No. Indeed, in a contract of sale of land in a mass, the specific boundaries stated in the contract
must control over any statement with respect to the area contained within its boundaries. Thus, it is the
boundaries indicated in a deed of absolute sale, and not the area in sq. m. mentioned therein 300.375
sq. m. in the Deed of Sale in respondents favor that control in the determination of which portion of the
land a vendee acquires.
RAYMUNDO S. DE LEON, Petitioner,
vs.
BENITA T. ONG.1 Respondent.

Facts: On March 10, 1993, Raymundo S. De Leon (petitioner) sold 3 parcels of land to Benita
T. Ong(respondent). The said properties were mortgaged to a financial institution; Real Savings
& Loan Association Inc. (RSLAI). The parties then executed a notarized deed of absolute sale
with assumption of mortgage. As indicated in the deed of mortgage, the parties stipulated that
the petitioner (de Leon) shall execute a deed of assumption of mortgage in favor of Ong
(respondent)after full payment of the P415,000. They also agreed that the respondent (Ong) shall
assume the mortgage. The respondent then subsequently gave petitioner P415,000 as partial
payment. On the other hand, de Leon handed the keys to Ong and de Leon wrote a letter to
inform RSLAI that the mortgage will be assumed by Ong. Thereafter, the respondent took
repairs and made improvements in the properties. Subsequently, respondent learned that the
same properties were sold to a certain Viloria after March 10, 1993 and changed the locks,
rendering the keys given to her useless. Respondent proceeded to RSLAI but she was informed
that the mortgage has been fully paid and that the titles have been given to the said person.
Respondent then filed a complaint for specific performance and declaration of nullity of the
second sale and damages. The petitioner contended that respondent does not have a cause of
action against him because the sale was subject to a condition which requires the approval
of RSLAI of the mortgage. Petitioner reiterated that they only entered into a contract to sell. The
RTC dismissed the case. On appeal, the CA upheld the sale to respondent and nullified the
sale to Viloria. Petitioner moved for reconsideration to the SC.

Issue:

Contract of Sale or Contract to Sell?

Void Sale Or Double Sale?

Held:

1. Sale. The deed executed by the parties (as previously quoted) stated that petitioner sold
the properties to respondent "in a manner absolute and irrevocable" for a sum of ₱1.1
million.14 With regard to the manner of payment, it required respondent to pay ₱415,500
in cash to petitioner upon the execution of the deed, with the balance15 payable directly to
RSLAI (on behalf of petitioner) within a reasonable time.16 Nothing in said instrument
implied that petitioner reserved ownership of the properties until the full payment of the
purchase price.17 On the contrary, the terms and conditions of the deed only affected the
manner of payment, not the immediate transfer of ownership (upon the execution of the
notarized contract) from petitioner as seller to respondent as buyer. Otherwise stated, the
said terms and conditions pertained to the performance of the contract, not the perfection
thereof nor the transfer of ownership.
 Settled is the rule that the seller is obliged to transfer title over the properties and deliver
the same to the buyer.18 In this regard, Article 1498 of the Civil Code19 provides that, as a
rule, the execution of a notarized deed of sale is equivalent to the delivery of a thing sold.

2. Double Sale. 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

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 deed22 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.
 Asset Privatization Trust vs. T.J. Enterprise
G.R. No. 167195 May 8, 2009
Facts:
Petitioner was a government entity created for the purpose to conserve, to provisionally
manage and to dispose assets of government institutions. It had acquired assets consisting of
machinery and refrigeration equipment stored at the Golden City compound which was leased to
and in the physical possession of Creative Lines, Inc., (Creative Lines). These assets were being
sold on an as-is-where-is basis.
Petitioner and respondent entered into an absolute deed of sale over certain machinery
and refrigeration equipment wherein respondent paid the full amount as evidenced by
petitioner’s receipt. After two (2) days, respondent demanded the delivery of the machinery it
had purchased. Petitioner issued a Gate Pass to respondent to enable them to pull out from the
compound the properties designated ; however, during the hauling of Lot No. 2 consisting of
sixteen (16) items, only nine (9) items were pulled out by respondent. Respondent filed a
complaint for specific performance and damages against petitioner and Creative Lines. Upon
inspection of the remaining items, they found the machinery and equipment damaged and had
missing parts. Petitioner claimed that there was already a constructive delivery of the machinery
and equipment upon the execution of the deed of sale it had complied with its obligation to
deliver the object of the sale since there was no stipulation to the contrary and it was the duty of
respondent to take possession of the property.
The RTC ruled that petitioner is liable for breach of contract and should pay for the actual
damages suffered by respondent. It found that at the time of the sale, petitioner did not have
control over the machinery and equipment and, thus, could not have transferred ownership by
constructive delivery. The Court of Appeals affirmed the judgment; hence, this petition.
Issue:
Whether or not the petitioner had complied with its obligations to make delivery of the
properties and failure to make actual delivery of the properties was not attributable was beyond
the control of petitioner?
Held:
No. There was no constructive delivery of the machinery and equipment upon the
execution of the deed of absolute sale or upon the issuance of the gate pass since it was not the
petitioner but Creative Lines which had actual possession of the property. The presumption of
constructive delivery is not applicable as it has to yield to the reality that the purchaser was not
placed in possession and control of the property.
Petitioner also claims that its failure to make actual delivery was beyond its control. It
posits that the refusal of Creative Lines to allow the hauling of the machinery and equipment was
unforeseen and constituted a fortuitous event. The matter of fortuitous events is governed by Art.
1174 of the Civil Code which provides that except in cases expressly specified by the law, or
when it is otherwise declared by stipulation, or when the nature of the obligation requires
assumption of risk, no person shall be responsible for those events which could not be foreseen,
or which though foreseen, were inevitable. A fortuitous event may either be an act of God, or
natural occurrences such as floods or typhoons, or an act of man such as riots, strikes or wars.
However, when the loss is found to be partly the result of a person’s participation whether by
active intervention, neglect or failure to act, the whole occurrence is humanized and removed
from the rules applicable to a fortuitous event. Thus, the risk of loss or deterioration of property
is borne by petitioner. Thus, it should be liable for the damages that may arise from the delay.