Title: Azcona vs, Reyes and Larracas, 59 Phil 446

Synopsis

This case involves two appeals, one by Alberta L. Reyes and the other by Gervasio

Larracas, as special administrator of the intestate estate of Florentina Cordero, from the judgment

rendered by the Court of First Instance of Mindoro, the dispositive part of which reads as

follows:

In view of the foregoing considerations. the court has arrived at the conclusion that the action

brought by the plaintiff is justified.

Wherefore, the court orders Alberta L. Reyes, and in her capacity as administratrix of the

estate of the deceased Florentina Cordero, to pay to the plaintiff: the sum of P11,985.05, with

interest thereon at 12 per cent per annum until fully paid; 10 per cent of said sum representing

expenses and attorney's fees, and the sum of P26 as fees for the registration of the mortgage

deed.

In case the defendant fails to pay the aforesaid sums within ninety days from the date this

judgment shall have become final, it is hereby ordered that the parcels of land described in

Exhibit A be sold at public auction and the proceeds thereof applied to the payment of said sums,

the balance to be turned over to the defendant Alberta L. Reyes. So, ordered.

Facts:
 On 11 October 1920, Florentina Cordero, now deceased, executed a power of attorney

authorizing her only daughter, Alberta L. Reyes, to mortgage in her name and representation all

her land situated in the municipality of Pola, Mindoro. On 22 October 1920, Reyes, personally

and as attorney in fact of her mother. Florentina Cordero, in consideration of the sum of P6,500

received from Enrique Azcona, now deceased, sold to the latter, with the right of repurchase

within the period of 4 years, 5 parcels of land with certificates of title belonging to her and

Cordero. The vendors became lessees of the property sold, at a yearly rental of P780. On 23

October 1920, Reyes, as attorney in fact of Cordero, in consideration of the sum of P5,000

received from Azcona, sold to the latter, with the right of repurchase within the period of 4 years,

a parcel of land with certificate of title 58 of the registry of deeds of Mindoro, belonging to

Cordero. Cordero became the lessee of said property at a yearly rental of P600. On 1 October

1925, Reyes and Cordero jointly executed a power of attorney authorizing Gregorio Venturanza

to sell and encumber all their real and personal including their cattle. Azcona died on 12 May

1925, and was succeeded in all his rights by his only son, Jesus Azcona, to whom the entire

estate of his deceased father, together with the credits, was judicially adjudicated. In as much as

neither Reyes nor Cordero, during her lifetime, had exercised her right of redemption within the

period of4 years, and inasmuch as they had asked for an extension of time, on 29 November

1926, Gregorio Venturanza, as attorney in fact of Reyes and Cordero, on one side, and Jesus

Azcona, on the other, executed a deed whereby the deeds of sale with the right of repurchase

dated October 22 and 23, 1920, respectively, were cancelled and their respective amounts of

P6,500 and P5,000, together with the sum of P1,000 representing the unpaid accrued interest

thereon, or a total amount of P12,500, were converted into a mortgage credit. In order to secure

the cancellation of the registration of the alleged sales with the right of repurchase, the parcels of
land described in the respective deeds were resold to the vendors and a mortgage was constituted

thereon to secure the payment of said mortgage credit of P12,500 within the period of 2 years,

extensible to another two years, with interest at 12% per annum. Under said contract the

mortgagors Reyes and Cordero were permitted to liquidate said debt by installments in the sum

of P2,500 with the interest due, to be paid on December 1 of every year, beginning in 1927.

Reyes and Cordero, through Venturanza, paid by way of amortization and interest (P2,500 on 15

February 1927, P2,200 on 17 October 1927, P1,200 on 9 February 1929, P350 on 30 June 1929,

and P600 on 20 September 1929; leaving a balance of P8,935.12). Since the last-mentioned date,

the mortgagors failed to pay amortization and interest so that on 30 June 1932, the unpaid

balance thereof together with the unpaid accrued interest amounted to P11,958.05.

The facts do not provide the manner on how the issue was raised in the CFI Mindoro. The

parties (Jesus Azcona, on one hand; and Alberta Reyes and Gervasio Larracas as special

administrator of the estate of Florentina Cordero, on the other) admit and the trial court so found

that, although the instruments are in the form of deeds of sale with pacto de retro, in reality they

represent mortgage loans. The CFI ordered Reyes, as administratix of Cordero’s estate, to pay

Azcona the um of P11,985.05 with 12% interest until fully paid, 10$ of the sum representing

expenses and attorney’s fees, and P2 as fees for the registration of the mortgage deed. The court

also ordered that in case Reyes fails to pay the sums within 90 days from final judgment, the

parcels of land shall be sold at public auction and the proceeds thereof applied to the payment of

the sum andthe balance delivered to Reyes. Reyes and Larracas appealed separately.

Issue:

Whether or not the deed of resale and mortgage dated November 29, 1926 (Exhibit A) is

legal and valid

The Supreme Court found no error in the judgment appealed from, and thus affirmed it in toto,

with the costs against Reyes and Larracas.

1. Deeds of sale are not true deeds of pacto de retro sale but of mortgage; Resale mere

formality to cancellation of registration and the notation of the mortgage deed

The instruments are not true deeds of sale with pacto de retro but of mortgage, the resale

of the parcels of land, made by Jesus Azcona in favor of Reyes and Cordero, is null and void on

the ground that, as mere mortgagors, they never ceased to be the owners thereof and that Enrique

Azcona, as a mere mortgagee, never acquired any title of ownership thereto. In order for a sale to

be valid, it is necessary that the vendor be the owner of the thing sold, inasmuch as it is a

principle of law that nobody can dispose of that which does not belong to him. However, the

sales with pacto de retro were fictitious for the reason that the contracts entered into by Reyes

and the deceased Enrique Azcona were really mortgage in their nature. Therefore, the resale was

a mere formality resorted to for the purpose of obtaining the lawful cancellation of the

registration thereof in the registry of deeds and the notation of the mortgage deed.

2. Mortgage deed not void, does not lack consideration or principal obligation which it

purports to secure

Reyes received the sum of P6,500 and another sum of P5,000 from the deceased Enrique

Azcona, both sums representing the purchase price of certain parcels of land, which were sold

with the right of repurchase. The sum of P12,500 which constitutes the cause or consideration of

the deed of resale and mortgage Exhibit A is the total of the sums of P6,500 and P5,000 which

Reyes, personally and as attorney in fact of Cordero, received from Enrique Azcona, together
with the sum of P1,000 representing the unpaid credits passed by inheritance to Jesus Azcona. It

cannot be said that the mortgage, executed by Venturanza, as attorney in fact of Reyes and

Cordero, in favor of Jesus Azcona, lacks consideration or principal obligation for the fulfillment

of which said instrument was executed as security.

3. Contracts of mortgage loans executed in form (attachment of SPA), binds Cordero

Upon examination of said documents, Reyes made it appear that she acted as Florentina

Cordero’s attorney in fact under a power of attorney issued to her by attaching a copy of said

power of attorney to the deed in question. In the case of Orden de Dominicos vs. De Coster (50

Phil., 115), the Court held that such form is valid and sufficient under the law. Considered as

mere contracts of mortgage loans, the deeds dated 22-23 October 1920 are binding upon

Cordero, and compliance with the obligations contracted thereunder may be demanded in her

intestate proceedings either as credit in favor of the intestate estate of Enrique Azcona or as

credit in favor of Jesus Azcona against Cordero under the mortgage deed.

4. No statement of facts of alleged usury

In regard to the question of usury raised, although it is true that failure to file a sworn

answer to a cross-complaint for the recovery of usurious interest paid implies an admission of the

existence of a usurious rate of interest (Lo Bun Chay vs. Paulino, 54 Phil., 144, cited with

approval in the case of Ramirez and Polido vs. Bergado, 56 Phil., 810), however, the

counterclaim and cross-complaint filed in the present case failed to state facts constituting the

alleged usury but merely allege that in payment of a debt of P9,500 Azcona and his predecessor

in interest received the amount of P20,130. Such statement does not in itself constitute an
allegation of usury and failure to file a reply thereto implies denial of such allegation (Sec. 104,

Act No. 190)

5. Existence of usurious interest not proven; 12% per annum stipulated, Charging

compound interest does not make loan usurious.

The existence of usurious interest has not been proven during the trial inasmuch as it is

stipulated that the vendors, as lessees, would have to pay the sum of P1,380 as yearly rental.

Such sum, computed on the basis of a capital of P11,500 gives a rate of interest of only 12% per

annum, which is allowed by law (Robinson vs. Sackermann and Postal Savings Bank, 46 Phil.,

539). Furthermore, in the deed of resale and mortgage loan, interest at the rate of only 12% per

annum is stipulated. The existence of a stipulation to the effect that accrued interest shall bear

interest does not imply that the loans in question are usurious inasmuch as it is permitted to

charge compound interest (sec. 5, Act No. 2655, as amended by sec. 3 of Act No. 3291; Cu

Unjieng e Hijos vs. Mabalacat Sugar Co., 54 Phil., 976

Reflection:

Title:Yu Tek and Co. vs. Gonzales, 29 Phil. 348

Synopsis:

The basis of this action is a written contract, Exhibit A, the pertinent paragraphs of which

follow:
1. That Mr. Basilio Gonzalez hereby acknowledges receipt of the sum of P3,000 Philippine

currency from Messrs. Yu Tek and Co., and that in consideration of said sum be obligates

himself to deliver to the said Yu Tek and Co., 600 piculs of sugar of the first and second grade,

according to the result of the polarization, within the period of three months, beginning on the 1st

day of January, 1912, and ending on the 31st day of March of the same year, 1912.

2. That the said Mr. Basilio Gonzales obligates himself to deliver to the said Messrs. Yu Tek and

Co., of this city the said 600 piculs of sugar at any place within the said municipality of Santa

Rosa which the said Messrs. Yu Tek and Co., or a representative of the same may designate.

3. That in case the said Mr. Basilio Gonzales does not deliver to Messrs. Yu Tek and Co. the 600

piculs of sugar within the period of three months, referred to in the second paragraph of this

document, this contract will be rescinded and the said Mr. Basilio Gonzales will then be

obligated to return to Messrs. Yu Tek and Co. the P3,000 received and also the sum of P1,200 by

way of indemnity for loss and damages.

Plaintiff proved that no sugar had been delivered to it under this contract nor had it been able to

recover the P3,000. Plaintiff prayed for judgment for the P3,000 and, in addition, for P1,200

under paragraph 4, supra. Judgment was rendered for P3,000 only, and from this judgment both

parties appealed.

Facts:

A contract was executed between the herein parties, whereby Mr. Basilio Gonzales

acknowledges the receipt of P3,000 from Yu Tek & Co., and that in consideration of which he

obligates himself to deliver to the latter 600 piculs of sugar of the first and second grade,

according to the result of polarization, within 3 months. There is a stipulation providing for
rescission with P1,200 penalty in case of failure to deliver. No sugar was delivered, so plaintiff

filed a case praying for the judgment of P3,000 plus P1,200. P3,000 was awarded, thus, both

parties appealed.

Defendant alleges that the court erred in refusing to permit parol evidence

showing that the parties intended that the sugar was to be secured from the

crop which the defendant raised on his plantation, and that he was unable to

fulfill the contract by reason of the almost total failure of his crop.

The second contention of the defendant arises from the first. He assumes

that the contract was limited to the sugar he might raise upon his own

plantation; that the contract represented a perfected sale; and that by failure

of his crop he was relieved from complying with his undertaking by loss of the

thing due. (Arts. 1452, 1096, and 1182, Civil Code.)

Issues:

1) Whether compliance of the obligation to deliver depends upon the production in defendant’s

plantation

2) Whether there is a perfected sale

3) Whether liquidated damages of P1,200 should be awarded to the plaintiff

Ruling:
The Supreme Court affirmed the judgment appealed from with the modification allowing the

recovery of P1,200 under paragraph 4 of the contract, without costs.

1. Rights determined by the writing itself

Parties are presumed to have reduced to writing all the essential conditions of their contract. The

rights of the parties must be determined by the writing itself.

2. Parol evidence not admissible as it should not serve to incorporate additional

conditions into a contract

While parol evidence is admissible in a variety of ways to explain the meaning of written

contracts, it cannot serve the purpose of incorporating into the contract additional

contemporaneous conditions which are not mentioned at all in the writing, unless there has been

fraud or mistake. In the present case, Gonzales alleged that the court erred in refusing to permit

parol evidence showing that the parties intended that the sugar was to be secured from the crop

which the defendant raised on his plantation, and that he was unable to fulfill the contract by

reason of the almost total failure of his crop. The case appears to be one to which the rule which

excludes parol evidence to add to or vary the terms of a written contract is decidedly applicable.

There is not the slightest intimation in the contract that the sugar was to be raised by Gonzales.

In the contract, Gonzales undertook to deliver a specified quantity of sugar within a specified

time. The contract placed no restriction upon him in the matter of obtaining the sugar, as he was

at liberty to purchase it on the market or raise it himself, notwithstanding that he owned a

plantation himself

3. Cases where parol evidence was denied by the Court

a party to a written contract was to become a partner in a firm instead of a creditor of the firm. In

Eveland vs. Eastern Mining Co. (14 Phil 509) a contract of employment provided that the

plaintiff should receive from the defendant a stipulated salary and expenses The defendant in

said casesought to interpose as a defense to recovery that the payment of the salary was

contingent upon the plaintiff’s employment redounding to the benefit of the defendant company.

The contract contained no such condition and the court declined to receive parol evidence

thereof.

4. Perfected contract of sale defined; Relief for non-delivery

Article 1450 defines a perfected sale as follows: “The sale shall be perfected between

vendor and vendee and shall be binding on both of them, if they have agreed upon the thing

which is the object of the contract and upon the price, even when neither has been delivered.”

Article 1452 provides that “the injury to or the profit of the thing sold shall, after the contract has

been perfected, be governed by the provisions of articles 1096 and 1182.” There is a perfected

sale with regard to the “thing” whenever the article of sale has been physically segregated from

all other articles.

6. Perfected sale; Cases

In McCullough vs. Aenlle & Co. (3 Phil 285), a particular tobacco factory with its

contents was held sold under a contract which did not provide for either delivery of the price or

of the thing until a future time. In Barretto vs. Santa Marina (26 Phil 200), specified shares of

stock in a tobacco factory were held sold by a contract which deferred delivery of both the price

and the stock until the latter had been appraised by an inventory of the entire assets of the
company. In Borromeo vs. Franco (5 Phil. Rep., 49) a sale of a specific house was held perfected

between the vendor and vendee, although the delivery of the price was withheld until the

necessary documents of ownership were prepared by the vendee. In Tan Leonco vs. Go Inqui (8

Phil. Rep., 531) the plaintiff had delivered a quantity of hemp into the warehouse of the

defendant. The defendant drew a bill of exchange in the sum of P800, representing the price

which had been agreed upon for the hemp thus delivered. Prior to the presentation of the bill for

payment, in said case, the hemp was destroyed. Whereupon, the defendant suspended payment of

the bill. It was held that the hemp having been already delivered, the title had passed and the loss

was the vendees. It is our purpose to distinguish the case at bar from all these cases.

7. Contract in present case merely an executory agreement: a promise of sale and not a

sale

The contract in the present case was merely an executory agreement; a promise of sale

and not a sale. As there was no perfected sale, it is clear that articles 1452, 1096, and 1182 are

not applicable. The agreement upon the “thing” which was the object of the contract was not

within the meaning of article 1450. Sugar is one of the staple commodities of this country. For

the purpose of sale its bulk is weighed, the customary unit of weight being denominated a

‘’picul.'’ There was no delivery under the contract. If called upon to designate the article sold, it

is clear that Gonzales could only say that it was “sugar.” He could only use this generic name for

the thing sold. There was no “appropriation” of any particular lot of sugar. Neither party could

point to any specific quantity of sugar

8. Present case different from cases cited with perfected contracts

In the McCullough case, for instance, the tobacco factory which the parties dealt with was

specifically pointed out and distinguished from all other tobacco factories. So, in the Barretto

case, the particular shares of stock which the parties desired to transfer were capable of

designation. In the Tan Leonco case, where a quantity of hemp was the subject of the contract, it

was shown that quantity had been deposited in a specific warehouse, and thus set apart and

distinguished from all other hem.

9. American jurisprudence; Executory contracts

In Witt Shoe Co. vs. Seegars & Co. (122 La., 145; 47 Sou., 444), a contract was entered into by a

traveling salesman for a quantity of shoes, the sales having been made by sample. Since Mitchell

was offering to sell by sample shoes, part of which had not been manufactured and the rest of

which were incorporated in Witt Shoe Co.’s stock in Lynchburg, Va., it was impossible that he

and Seegars & Co. should at that time have agreed upon the specific objects, the title to which

was to pass, and hence there could have been no sale.In State vs. Shields, et al. (110 La., 547, 34

Sou., 673), it was held that in receiving an order for a quantity of goods, of a kind and at a price

agreed on, to be supplied from a general stock, warehoused at another place, the agent receiving

the order merely enters into an executory contract for the sale of the goods, which does not divest

or transfer the title of any determinate object, and which becomes effective for that purpose only

when specific goods are thereafter appropriated to the contract; and, in the absence of a more

specific agreement on the subject, that such appropriation takes place only when the goods as

ordered are delivered to the public carriers at the place from which they are to be shipped,

consigned to the person by whom the order isgiven, at which time and place, therefore, the sale is

perfected and the title passes.”

In Larue & Prevost vs. Rugely, Blair & Co. (10 La. Ann., 242), the defendants therein had made

a contract for the sale, by weight, of a lot of cotton, had received $3,000 on account of the price,

and had given an order for its delivery, which had been presented to the purchaser, and

recognized by the press in which the cotton was stored, but that the cotton had been destroyed by

fire before it was weighed. It was held that it was still at the risk of the seller, and that the buyer

was entitled to recover the $3,000 paid on account of the price. Similarly, in the present case,

Gonzales having defaulted in his engagement, Yu Tek & Co. is entitled to recover the P3,000

which it advanced to Gonzalez

11.Contracting parties free to stipulate; Stipulation clear, no room for interpretation;

Liquidated damage

The contract plainly states that if Gonzales fails to deliver the 600 piculs of sugar within the time

agreed on, the contract will be rescinded and he will be obliged to return the P3,000 and pay the

sum of P1,200 by way of indemnity for loss and damages. There cannot be the slightest doubt

about the meaning of this language or the intention of the parties. There is no room for either

interpretation or construction. Under the provisions of article 1255 of the Civil Code contracting

parties are free to execute the contracts that they may consider suitable, provided they are not in

contravention of law, morals, or public order. In our opinion there is nothing in the contract

under consideration which is opposed to any of these principles. Thus, this is a clear case of

liquidated damages.

Reflection:
  There is not the slightest intimation in the contract that the sugar was to be raised by the

defendant. Parties are presumed to have reduced to writing all the essential conditions of their

contract. While parol evidence is admissible in a variety of ways to explain the meaning of

written contracts, it cannot serve the purpose of incorporating into the contract additional

contemporaneous conditions which are not mentioned at all in the writing, unless there has been

fraud or mistake. It may be true that defendant owned a plantation and expected to raise the sugar

himself, but he did not limit his obligation to his own crop of sugar. Our conclusion is that the

condition which the defendant seeks to add to the contract by parol evidence cannot be

considered. The rights of the parties must be determined by the writing itself.

(2) I conclude that the contract in the case at bar was merely an executory agreement; a promise

of sale and not a sale. At there was no perfected sale, it is clear that articles 1452, 1096, and 1182

are not applicable. The defendant having defaulted in his engagement, the plaintiff is entitled to

recover the P3,000 which it advanced to the defendant, and this portion of the judgment appealed

from must therefore be affirmed.

(3) The contract plainly states that if the defendant fails to deliver the 600 piculs of sugar within

the time agreed on, the contract will be rescinded and he will be obliged to return the P3,000 and

pay the sum of P1,200 by way of indemnity for loss and damages. There cannot be the slightest

doubt about the meaning of this language or the intention of the parties. There is no room for

either interpretation or construction. Under the provisions of article 1255 of the Civil Code

contracting parties are free to execute the contracts that they may consider suitable, provided

they are not in contravention of law, morals, or public order. In my own opinion there is nothing

in the contract under consideration which is opposed to any of these principles.

Synopsis:

Plaintiff alleged that the defendant Vitaliano Mamawal, deputy sheriff of the Province of Tarlac,

by virtue of a writ of execution issued by the Court of First Instance of Pampanga, attached and sold to

the defendant Emiliano J. Valdez the sugar cane planted by the plaintiff and his tenants on seven parcels

of land. Plaintiff offered to redeem said sugar cane and tendered to the defendant Valdez the amount

sufficient to cover the price paid by the latter, the interest thereon and any assessments or taxes which he

may have paid thereon after the purchase, and the interest corresponding thereto. However, Valdez

refused to accept the money and to return the sugar cane to the plaintiff.

Meanwhile, defendant argued that the sugar cane was personal property hence not subject

to redemption.

Facts:

On 11 May 1923, the deputy-sheriff of the Province of Tarlac, by virtue of a writ of

execution in civil case 20203 of the CFI Manila (Macondray & Co., Inc. vs. Leon Sibal), levied
an attachment on Leon Sibal’s 8 parcels of land for the sum of P4,273.93. 2 months later, or on

30 July 1923, Macondray & Co., Inc., bought said parcels of land, at the auction held by the

sheriff of the Province of Tarlac. Within 1 year from the sale of said parcels of land, or on 24

September 1923, Sibal paid P2,000 to Macondray for the account of the redemption price of said

parcels of land, without specifying which said amount was to be applied. The redemption price

of the parcels was reduced to P2,579.97 including interest.

On 29 April 1924, the deputy sheriff of the Province of Tarlac, by virtue of a writ of

execution in civil case 1301 of the Province of Pampanga (Emiliano J. Valdez vs. Leon Sibal

1.º), attached the personal property of Sibal located in Tarlac, among which was included the

sugar cane in question in the 7 parcels of land described in the complaint. He also attached

Sibal’s real property in Tarlac, including rights, interest and participation therein, which consists

of 11 parcels of land and a house and camarin situated in one of said parcels. On 9-10 May 1924,

the deputy sheriff sold at public auction said personal properties to Emiliano J. Valdez, who paid

therefor the sum of P1,550, of which P600 was for the sugar cane. On 25 June 1924, 8 of the 11

parcels, including the camarin and the house were bought by Valdez at the auction held by the

sheriff for the sum of P12,200. The 3 remaining parcels were released from attachment by virtue

of claims presented by Cayugan and Tizon.

On the same date, Macondray sold and conveyed to Valdezfor P2,579.97 all of its rights

and interest in the 8 parcels of land acquired by it in connection with civil case 20203 of the CFI

Manila.On 14 December 1924, action was commenced in the CFI of the Province of Tarlac. The

plaintiff alleged that the deputy sheriff of Tarlac Province attached and sold to Valdezthe sugar

cane planted by the plaintiff and his tenants on 7 parcels of land, and that within 1 year from the
date of the attachment and sale the plaintiff ordered to redeem said sugar cane and tendered to

Valdezthe amount sufficient to cover the price paid by the latter, with taxes and interests, and

that Valdez refused to accept the money and return the sugar cane to the plaintiff. After hearing

and on 28 April 1926, the judge (Lukban) rendered judgment in favor of the defendant holding

that the sugar cane in question was personal property and, as such, was not subject to

redemption; among others. Hence, the appeal.

Paragraph 2, Article 334 of the Civil Code interpreted by the Tribunal Supremo de

Espana as that growing crops may be considered as personal property. Sugar cane may come

under the classification of real property as "ungathered products" in paragraph 2 of article 334 of

the Civil Code, which enumerates as real property as "Trees, plants, and ungathered products,

while they are annexed to the land or form an integral part of any immovable property." That

article, however, has received in recent years an interpretation by the Tribunal Supremo de

España, which holds that, under certain conditions, growing crops may be considered as personal

property.

Issue:

Whether or not the sugar cane is personal o real property?

Ruling:

It is contended that sugar cane comes under the classification of real property as

"ungathered products" in paragraph 2 of article 334 of the Civil Code. Said paragraph 2 of article

334 enumerates as real property the following: Trees, plants, and ungathered products, while

they are annexed to the land or form an integral part of any immovable property." That article,

however, has received in recent years an interpretation by the Tribunal Supremo de España,
which holds that, under certain conditions, growing crops may be considered as personal

property.

In some cases, "standing crops" may be considered and dealt with as personal property.

In the case of Lumber Co. vs. Sheriff and Tax Collector (106 La., 418) the Supreme Court said:

"True, by article 465 of the Civil Code it is provided that 'standing crops and the fruits of trees

not gathered and trees before they are cut down are considered as part of the land to which they

are attached, but the immovability provided for is only one in abstracto and without reference to

rights on or to the crop acquired by others than the owners of the property to which the crop is

attached. . . . The existence of a right on the growing crop is a mobilization by anticipation, a

gathering as it were in advance, rendering the crop movable quoad the right acquired therein.

Our jurisprudence recognizes the possible mobilization of the growing crop."

For the purpose of attachment and execution, and for the purposes of the Chattel

Mortgage Law, "ungathered products" have the nature of personal property. SC lowered the

award for damages to the defendant to 8,900.80 by acknowledging the fact that some of the sugar

canes were owned by the petitioner and by reducing the calculated expected yield or profit that

defendant would have made if petitioner did not judicially prevent him from planting and

harvesting his lands.

Reflection:
Title: Martin vs. Reyes, 91 Phil. 666.
Synopsis:

Facts:

According to the Court of Appeals, the respondents Pedro Revilla and Maria Reyes

obtained from the La Previsora Filipina sometime before November 18, 1939 a loan of P6,500;

and with the money, they paid the price of a lot, with improvements, which they had previously

purchased from the Archbishop of Manila. And they mortgaged the property to La Previsora for

the purpose of guaranteeing repayment of the debt in installments with interest at 12 per cent per

annum.
It turned out later that Monte de Piedad y Caja de Ahorros had obtained a judgment against

Pedro Revilla for the sum of P45,000 and had levied execution therefor upon the property and its

rentals. Apprised of this development, the La Previsora started foreclosure proceedings, alleging

non-payment of its credit by the mortgagors. The conflicting interests were later the object of

amicable settlement among the parties, as a result of which the herein respondents notarized the

deed Exhibit E whereby in satisfaction of their obligations to La Previsora (then amounting to

P8,204.60) they ceded the property to the said institution, reserving the right to repurchase for

P8,204.60 within sixty days. The deed was acknowledged on November 3, 1941.

It seems that La Previsora at the same time, or immediately thereafter conveyed the

property by Exhibit C to petitioner Canuto Martin, who then executed the document Exhibit D

undertaking to allow respondents to repurchase the property within sixty days from October 31,

1941, but at the price of P14,000. This document Exhibit D was signed by Maria Reyes

signifying her assent. At the trial she pleaded that the document, without embodying their true

agreement, had been obtained thru deceit and abuse of confidence. However, her assertions were

not credited by the Court of Appeals. Nevertheless, that court declared the document void

(Exhibit D) for the only reason that it had been signed by Canuto Martin before acquiring

ownership of the property by the cession of Maria Reyes and Pedro Revilla to the La Previsora,

and from the latter to him. The Court noted that whereas Exhibit E was acknowledged before the

notary on November 3, 1941, Exhibit D bore the date October 30, 1941, a few days before.

Issue:

Whether or not the had the authority to sell even if he is not the owner at the time of the

execution of the contract.

Ruling:
 The Court of Appeals pronounced Exhibit D invalid because at the time of its execution,

Martin had no title over the property. This is rather too technical a viewpoint. Remembering that

Exhibit D constituted a part of the whole friendly settlement and could be considered as

simultaneous with the other documents, specially the documents of 'transfer from Maria Reyes

and La Previsora, the disparity of dates should imply no annulling consequences. At any rate,

Exhibit D may be placed in the same category as a promise to convey land not yet owned by the

vendor, obligation which may be enforced, according to the authorities:

"Property or goods which, at the time of the sale, are not owned by the seller, but which are

thereafter to be acquired by him, cannot be the subject of an executed sale, but may be the

subject of a contract for the future sale and delivery thereof, and it has been held that even

though the contract is in the form of a present sale it will not pass the title, after the goods have

been acquired, until the seller has done some act appropriating them to the contract. Such a

contract for the future sale and delivery of goods, which the seller has not in possession but

which he intends to acquire by producing, manufacturing, or purchasing before the day of

delivery, is valid as an executory contract to be fulfilled by acquiring and delivering the goods

specified in the contract, even though the acquisition of the goods by the seller depends upon a

contingency which may or may not happen." (55 Corpus Juris 65). (Italics ours).

"It is not unusual for persons to agree to convey by a certain time, notwithstanding they

have no title to the land at the time of the contract, and the validity of such agreements is upheld.

In such cases, the vendor assumes the risk of acquiring the title and making the conveyance, or

responding in damages for the vendee's loss of his bargain. One having an option to purchase

real estate has a legal right to enter into an executory contract to sell the property. A fortiori, it is

not necessary that the vendor be the absolute owner of the property at the time he enters into the
agreement of sale. An equitable estate in land, or a right to become the owner of the land, is as

much the subject of sale as is the land itself, and whenever one is so situated with reference to a

tract of land that he can acquire the title thereto, either by the voluntary act of the parties holding

the title, or by proceedings at law or in equity, he is in a position to rake a valid agreement for

the sale thereof, without disclosing the nature of his title.

Reflection:

Title: Baretto vs. Sta. Marina, 26 Phil 200.

Synopsis:
 The La Insular cigar and cigarette factory is a joint account association with a nominal

capital of P865,000, the plaintiff's share is P20,000, or 4/173 of the whole. The plaintiff’s

attorneys wrote the defendant's local representative a letter offering to sell plaintiff's share in the

factory. The result of the correspondence between the parties and their representatives was that

Exhibit G was duly executed on May 3, 1910. In accordance with the terms of this exhibit a

committee of appraisers was appointed to ascertain and fix the actual value of La Insular. The

committee rendered its report on November 14, 1910, fixing the net value at P4,428,194.44.

Subsequently to the execution of Exhibit J, demand was made by the plaintiff upon the defendant

for his share of the profits from June 30, 1909, to November 22, 1910. This demand was refused

and thereupon this action was instituted to recover said profits.

The plaintiff argued that if the agreement of May 3, 1910, was a perfected sale he cannot

recover any profits after that date; while on the other hand the defendant concedes that if said

agreement was only a promise to sell in the future it, standing alone, would not prevent recovery

in this action.

Facts:

On January 5, 1911, for the plaintiff Antonio M.a Barretto filed suit against Jose Santa

Marina, alleging that the defendant, a resident of Spain, was then the owner and proprietor of the

business known as the La Insular Cigar and Cigarette Factory, established in these Islands, which

business consisted in the purchase of leaf tobacco and other raw material, in the preparation of

the same, and in the sale of cigars and cigarettes in large quantities; that on January 8, 1910, and

for a long time prior thereto, the plaintiff held and had held the position of agent of the defendant

in the Philippine Islands for the management of the said business in the name and for the account

of the said defendant; that the plaintiff's services were rendered in pursuance of a contract
whereby the defendant obligated himself in writing to hire the said services for so long a time as

the plaintiff should not show discouragement and to compensate such services at the rate of

P37,000 Philippine currency per annum; that, on the aforesaid 8th day of January, 1910, the

defendant, without reason, justification, or pretext and in violation of the contract before

mentioned, summarily and arbitrarily dispensed with the plaintiff's services and removed him

from the management of the business, since which date the defendant had refused to pay him the

compensation, or any part thereof, due him and payable in full for services rendered subsequent

to December 31, 1909; and that, as a second cause of action based upon the facts foretasted, the

plaintiff had suffered losses and damages in the sum of P100,000 Philippine currency. Said

counsel therefore prayed that judgment be rendered against the defendant by sentencing him to

pay to the plaintiff P137,000 Philippine currency, and the interest thereon at the legal rate, in

addition to the payment of the costs, together with such other equitable remedies as the law

allows.

By an order of March 14, 1911, the Honorable A. S. Crossfield, judge overruled the

demurrer to the first cause of action, but sustained that to the second. Counsel for the plaintiff

entered an exception to this order in so far as it sustained the demurrer interposed by the

defendant to the second cause of action.

By his written answer to the complaint, on July 19, 1911, counsel for the defendant,

reserving his exception to the order of the court overruling his demurrer filed against the first

cause of action, denied each and all of the allegations contained in the complaint, relative to such

first cause of action.

with the defendant in which any period of time was stipulated during which the former was to

render his services as manager of the La Insular factory; that the defendant revoked for just cause

the power conferred upon the plaintiff; that subsequent to the revocation of such power, and on

the occasion of the plaintiff's having sold all his rights and interests in the business of the La

Insular factory to the defendant, in consideration of the sum received by him, the plaintiff

renounced all action, intervention and claim that he might have against the defendant relative to

the business aforementioned, whereby all the questions that might have arisen between them

were settled.

Issue:

Whether the contract of agency was validity revoked.

Ruling:

Yes, the contract of agency between the plaintiff and the defendant is validity revoked.

Baretto was not really dismissed in or removed by Santa Marina. Rather, Baretto resigned as

defendant’s agent and manager as evidenced by the letter he sent to the defendants.