SALES CASE DIGEST

1) Perfection of Contract

Toyota Shaw vs. CA Case Digest

Petitioner: Toyota Shaw, Inc.
Respondent: Luna L. Sosa
Legal Basis of Supreme Court: Article 1458, Article 1475, Article 2229 of the Civil Code
Doctrine Applied in The Case:
 Definition of a Contract of Sale: For a contract of sale to be valid and enforceable, there must be a
meeting of the minds, where one party agrees to transfer ownership of a determinate thing and the other
agrees to pay a certain price.
 Stages of a Contract of Sale: A contract of sale goes through three stages: (1) preparation/negotiation,
(2) perfection (agreement on terms), and (3) consummation (fulfillment of terms).
 Essential Element of Price: A definite agreement on the price and its manner of payment is an essential
element for a binding sale contract. Disagreement on payment terms equates to a failure to agree on the
price.
 Agent's Authority: Individuals dealing with an agent bear the responsibility to verify the extent of the
agent's authority.
 Exemplary Damages: Exemplary damages are awarded in addition to other types of damages (moral,
temperate, liquidated, or compensatory) as a form of correction or public example.
 Attorney's Fees: Courts must explicitly state the legal basis for awarding attorney's fees within the body
of the decision, not just the dispositive portion.
Facts of the Case (Only relevant and be detailed):
 Luna Sosa wanted to purchase a Toyota Lite Ace and contacted Toyota Shaw, Inc. to inquire about
availability.
 Sosa met with Toyota sales representative Popong Bernardo and expressed his need for the vehicle by
June 17th. Bernardo assured Sosa of the vehicle's availability and they both signed a document outlining
the delivery date and down payment.
 The following day, Sosa paid the down payment of P100,000 and signed a Vehicle Sales Proposal (VSP).
The VSP outlined financing terms through B.A. Finance.
 On the agreed-upon delivery date, Bernardo informed Sosa that the vehicle would not be delivered due
to the disapproval of Sosa's credit financing application by B.A. Finance. Toyota offered Sosa the option
to purchase the car with full cash payment, which Sosa refused.
 Toyota refunded Sosa’s down payment. Sosa then sent letters demanding compensation for damages,
ultimately filing a complaint for damages based on Toyota's refusal to deliver the vehicle.
Petitioner’s Contention:
 The document signed by the sales representative was not a perfected contract of sale and thus not
binding on Toyota.
 The sales representative did not have the authority to bind the company in a contract of sale.
 The Vehicle Sales Proposal (VSP) was the true agreement, and it was contingent on financing approval.
 The vehicle was not delivered because the financing company did not approve Sosa’s application.
Respondent’s Contention:
 The document signed by the sales representative was a perfected contract of sale, and Toyota breached
the contract by failing to deliver the vehicle.
 The sales representative acted as an agent of Toyota and, therefore, his actions were binding upon the
company.
 Sosa suffered damages due to Toyota’s failure to deliver the vehicle, including embarrassment and
humiliation.
Issues:
 Was the document signed by the sales representative a perfected contract of sale?
 Did the sales representative have the authority to bind Toyota to the agreement?
 Was Toyota liable for damages to Sosa for not delivering the vehicle?
Held (Yes/No answers to the Issue):
  No. The document signed by the sales representative was not a perfected contract of sale.
 No. The sales representative did not have the authority to bind Toyota.
 No. Toyota was not liable for damages to Sosa.
Reason for Supreme Court Decision:
 The Supreme Court found that the initial document signed by the sales representative did not meet the
legal definition of a perfected contract of sale. It lacked essential elements like a price, payment terms,
and Sosa's signature.
 The court determined that Sosa, as a reasonable person, should have been aware that a sales
representative did not have the inherent authority to finalize a sale. It was Sosa's responsibility to verify
the representative's authority.
 While the VSP did contain more details, it was contingent on financing approval, which was not granted.
Toyota was within its rights to cancel the VSP and refund the down payment. The court also found
Sosa's claim of damages to be without merit.
Significance of the Case:
 This case reaffirms the essential elements of a valid contract of sale, highlighting the requirement for a
meeting of the minds on all terms, especially price and payment.
 It clarifies that a sales representative's actions are not automatically binding on a company, placing the
onus on the buyer to ascertain the scope of an agent’s authority.
 The case emphasizes the principle of "caveat emptor" (buyer beware), reminding buyers of their
responsibility to exercise caution and due diligence in transactions.

Alfredo vs Borras Case Digest (Nature and Form of the Contract)

Petitioner: Spouses Godofredo Alfredo and Carmen Limon Alfredo, Spouses Arnulfo Savellano and Editha B.
Savellano, Danton D. Matawaran, Spouses Delfin F. Espiritu, Jr. and Estela S. Espiritu and Elizabeth Tuazon
Respondent: Spouses Armando Borras and Adelia Lobaton Borras
Legal Basis of Supreme Court: Article 1458 of the Civil Code of the Philippines
Doctrine Applied in The Case:
 Definition of a Contract of Sale: A contract of sale is perfected at the moment there is a meeting of the
minds upon the thing which is the object of the contract and upon the price.
 Essential Elements: A contract of sale requires:
o Consent of the contracting parties.
o Object certain (the thing sold).
o Cause of the obligation (the price certain in money or its equivalent).
 Perfection and Consummation of Contract: A contract is perfected by mere consent. The contract is
consummated upon the contracting parties' performance of their respective obligations under the
contract, such as the delivery of the object of the sale to the buyer, and the payment of the purchase price
by the buyer to the seller.
 Statute of Frauds: The Statute of Frauds, which requires certain contracts like the sale of real property
to be in writing, applies only to executory contracts, or those contracts where the parties have yet to
perform their respective obligations. If one party has performed his obligation, oral evidence is
admissible to prove the agreement. The Statute of Frauds does not apply to contracts that have been
either partially or totally performed.
 Ratification of Contracts Violating Statute of Frauds: A contract that violates the Statute of Frauds is
ratified by the acceptance of benefits under the contract.
 Voidable Contracts: Voidable contracts are those where all of the essential elements for validity are
present, although the element of consent is vitiated by reason of mistake, violence, intimidation, undue
influence or fraud. Voidable contracts are susceptible of ratification.
 Sale of Conjugal Property Without Marital Consent: Under the Civil Code, a contract of sale of
conjugal property made by the wife without the husband’s consent is not void but merely voidable.
Such a sale is binding upon the conjugal partnership if the proceeds of the sale are used for the
benefit of the conjugal partnership.
Facts of the Case (Only relevant and be detailed):
 Spouses Godofredo and Carmen Alfredo (the sellers) were the registered owners of a parcel of land (the
 Subject Land).
 The Subject Land was mortgaged by the sellers to the Development Bank of the Philippines (DBP).
 In order to pay their DBP loan, the sellers sold the Subject Land for P15,000 to Spouses Armando and
Adelia Borras (the buyers).
 Under the agreement, the buyers assumed payment of the sellers' DBP loan and its accumulated interest,
with the balance of the purchase price to be paid in cash to the sellers.
 The buyers paid the sellers the money to pay the loan to DBP. DBP canceled the mortgage, and returned
the owner’s duplicate copy of the title to the sellers.
 The buyers subsequently paid the balance of the purchase price, as evidenced by a receipt dated 11
March 1970 issued by Carmen to the buyers. The sellers then delivered to the buyers the owner’s
duplicate copy of the title, as well as other documents related to the Subject Land. The sellers introduced
the buyers to the tenants of the Subject Land as the new owners, and the buyers then took possession of
the Subject Land.
 Twenty-four (24) years later, the buyers found out that the sellers resold portions of the Subject Land to
other buyers (the Subsequent Buyers), who were able to register their deeds of sale and secure transfer
certificates of title to the lots they purchased.
Petitioner’s Contention:
 The sellers and the Subsequent Buyers argued that there was no valid and enforceable sale of the Subject
Land to the buyers because there was no written instrument evidencing the alleged contract of sale.
 The sellers and the Subsequent Buyers also argued that the buyers' action for specific performance had
already prescribed.
 Finally, the Subsequent Buyers argued that they were innocent purchasers in good faith and for value,
and therefore, they have a better right to the Subject Land than the buyers.
Respondent’s Contention:
 The buyers argued that there was a perfected contract of sale between them and the sellers, as evidenced
by their payment of the purchase price and their possession of the Subject Land for twenty-four (24)
years.
 The buyers also argued that their action had not yet prescribed because they only learned about the
second sale to the Subsequent Buyers twenty-four (24) years after their agreement with the sellers.
 Finally, the buyers argued that the Subsequent Buyers were not innocent purchasers for value because
they had constructive notice of the buyers' adverse claim over the Subject Land.
Issues:
 Was there a valid and enforceable contract of sale between the sellers and the buyers?
 Had the action filed by the buyers to enforce the alleged contract of sale prescribed?
 Were the Subsequent Buyers innocent purchasers for value?
Held (Yes/No answers to the Issue):
 Yes. There was a valid and enforceable contract of sale between the sellers and the buyers.
 No. The action filed by the buyers had not yet prescribed.
 No. The Subsequent Buyers were not innocent purchasers for value.
Reason for Supreme Court Decision:
 Applying Article 1458 of the Civil Code, the Supreme Court ruled that the contract of sale between the
sellers and the buyers was perfected from the moment there was a meeting of the minds on the object of
the contract (the Subject Land) and on the price (P15,000). All the essential elements of a contract of
sale were present. The contract of sale was also consummated because the sellers delivered the Subject
Land to the buyers, placing the latter in actual physical possession thereof, while the buyers, in turn, paid
the full purchase price.
 The Statute of Frauds did not apply in this case because the sale was already consummated, with both
the sellers and the buyers performing their respective obligations under the contract of sale.
 Even assuming that the verbal contract of sale between the sellers and the buyers violated the Statute of
Frauds, the same was deemed ratified because the sellers received benefits under the said verbal
contract.
 The sale of the Subject Land by Carmen without Godofredo’s consent was not void, but merely
voidable. A voidable contract is susceptible of ratification, and in this case, Godofredo ratified the said
sale when he introduced the buyers to his tenants as the new owners of the Subject Land. The Supreme
Court likewise ruled that the sale was binding upon the conjugal partnership because most of the
proceeds of the sale was used to pay the DBP loan, which redounded to the benefit of the conjugal
 partnership.
 The buyers' action to recover the Subject Land from the Subsequent Buyers had not yet prescribed. An
action for reconveyance based on an implied trust prescribes in ten (10) years from the date of the
registration of the deed or issuance of the title. The Subsequent Buyers purchased the subdivided
portions of the Subject Land on February 22, 1994, and the titles were issued to them on February 24,
1994. Since the Amended Complaint was filed on March 7, 1994, the action had not yet prescribed.
 Finally, the Subsequent Buyers were not innocent purchasers for value. While the Subsequent Buyers
argued that there was no evidence showing that they had knowledge of the prior sale to the buyers, the
Supreme Court ruled that the registration of the adverse claim by the buyers on February 8, 1994
constituted constructive notice to the whole world of the said adverse claim. Since the Subsequent
Buyers bought their respective lots only on February 22, 1994, they already had constructive notice at
that time of the adverse claim of the buyers.
Significance of the Case:
This case highlights the following:
 Stages of a Contract: A contract undergoes three distinct stages: (a) preparation or negotiation, (b)
perfection, and (c) consummation. A contract of sale is perfected at the moment there is a meeting of the
minds upon the thing which is the object of the contract and upon the price. A contract is consummated
upon the contracting parties' performance of their respective obligations under the contract.
 Statute of Frauds: The Statute of Frauds, which requires certain contracts to be in writing to be
enforceable, only applies to executory contracts. If the contract has been either partially or totally
performed, the Statute of Frauds will not apply. Likewise, a contract that violates the Statute of Frauds
may be ratified by the acceptance of benefits under the contract.
 Voidable Contracts: Voidable contracts, which are susceptible of ratification, are different from void
contracts. For example, under the Civil Code, a contract of sale of conjugal property made by the wife
without the husband’s consent is not void but merely voidable.
 Constructive Notice: A person dealing with registered land is considered to have constructive notice of
all facts that are annotated in the original certificate of title. Thus, for a buyer of registered land to be
considered an innocent purchaser for value, he must not only buy the land in good faith and for value,
but he must also register the same without notice of any defect in the title of the seller. If at the time of
the registration, there is already an adverse claim annotated on the title, then the buyer cannot claim to
be an innocent purchaser for value.

2) Earnest Money

Spouses Doromal, Sr. v. Court of Appeals Case Digest (Earnest Money as Guarantee)
Here is the case digest template filled out for Spouses Ramon Doromal, Sr., and Rosario Salas, and Spouses
Ramon Doromal, Jr., and Gaudelia Vega, petitioners, vs. Hon. Court of Appeals and Filomena Javellana,
respondents., focusing on “Earnest money - Earnest money given as guarantee”:
Petitioner: Spouses Ramon Doromal, Sr., and Rosario Salas, and Spouses Ramon Doromal, Jr., and Gaudelia
Vega
Respondent: Hon. Court of Appeals and Filomena Javellana
Legal Basis of Supreme Court: Article 1623 of the Civil Code of the Philippines
Doctrine Applied in The Case:
 Earnest Money as Guarantee: Earnest money, under the Old Civil Code, served as a guarantee that the
buyer would not back out of a sale. It did not necessarily signify the perfection of the sale, especially
when a definite agreement on the price was not yet established.
 Notice for Redemption: For a co-owner's right of redemption, the notice required isn't just about a
finalized sale but about the execution and delivery of the deed of sale. This notice starts the 30-day
redemption period.
 Consequences of Tax Evasion: The courts will not condone the practice of understating sale
considerations to evade taxes and fees. Those involved in such an act are considered in pari delicto and
will not receive favorable consideration from the court.
 Redemption Price Based on Deed: The redemption price should be based on the amount stated in the
deed of sale, especially when there's evidence of a deliberate understatement to evade taxes. The court
prioritizes upholding the law and discourages fraudulent practices.
Facts of the Case (Only relevant and be detailed):
 The case involved a dispute over the sale of a piece of land (Lot 3504 of the cadastral survey of Iloilo)
originally owned by Justice Antonio Horilleno and his siblings.
 Filomena Javellana, one of the co-owners, disagreed with the sale of the land to the Doromals.
 Despite Javellana's refusal, the other co-owners, represented by Carlos Horilleno, proceeded with the
sale to the Doromals.
 While the deed of sale mentioned a price of P30,000, evidence suggests the actual price paid was much
higher (P115,250), with the lower amount declared to minimize taxes.
 Javellana, upon learning of the sale, offered to redeem the property within the stipulated period.
However, the Doromals refused, leading to a legal battle over the redemption price and Javellana's right
to redeem.
Petitioner’s Contention:
 The Doromals (petitioners) argued that Javellana was informed about the intended sale through letters
from Carlos and that a sum of P5,000 was given as earnest money, signifying a perfected sale.
 They further contended that the inscription of the sale in the Registry of Property should be binding
against third parties, including Javellana.
 Lastly, they argued that if Javellana had the right to redeem, the price should be the actual amount paid
(P115,250), not the understated price in the deed.
Respondent’s Contention:
 Javellana (respondent) argued that the letters sent by Carlos didn't constitute sufficient notice of a
perfected sale as there was no written notice of the actual execution and registration of the deed.
 She emphasized her right to redeem as a co-owner and maintained that the redemption price should be
the one stated in the deed, regardless of the actual amount paid.
Issues:
 Did the letters sent to Javellana constitute sufficient notice for the sale, marking the start of the 30-day
period for redemption?
 Should the redemption price be based on the amount stated in the deed of sale or the actual amount paid,
considering the evidence of tax evasion?
Held (Yes/No answers to the Issue):
 No. The letters did not constitute sufficient notice.
 No. The redemption price should be based on the amount stated in the deed of sale.
Reason for Supreme Court Decision:
 The court ruled that the letters from Carlos, while informing Javellana about a potential sale, didn't
mention a finalized sale price nor confirm the execution and delivery of the deed.
 The P5,000 given to Carlos was viewed as a guarantee that the Doromals wouldn't back out, not as
earnest money signifying a perfected sale under the Civil Code.
 The court upheld Javellana’s right to redeem the property as she was not adequately notified about the
finalized sale.
 Regarding the redemption price, the court ruled that it should be the amount mentioned in the
deed (P30,000) despite knowing that the actual amount was higher. This decision was made because:
o The court denounced the practice of understating the sale price to evade taxes, considering it
against public policy.
o The parties involved in the sale (the Doromals and the other co-owners) were deemed in pari
delicto (equally at fault) for tax evasion and, therefore, not deserving of a favorable outcome.
o Allowing the Doromals to benefit from their fraudulent act by demanding the higher price
would set a dangerous precedent.
Significance of the Case:
 The case clarifies the concept of earnest money as a guarantee in the context of the Old Civil Code.
 It emphasizes the importance of a formal notice of sale, particularly the execution and delivery of the
deed, to trigger the countdown for a co-owner's right of redemption.
 The case highlights the court's stance against tax evasion, indicating that it will not condone such
actions, even if it means a party might experience a financial disadvantage due to their involvement in
the fraudulent act.
 It reinforces the principle that the redemption price should be based on the amount stated in the deed,
especially when there's clear evidence of an unethical or illegal attempt to circumvent legal obligations.
First Optima Realty Corp. v. Securitron Security Services, Inc. Case Digest (Failure to Return Earnest
Money)
Here is the case digest template filled out for First Optima Realty Corporation, Petitioner, vs. Securitron Security
Services, Inc., Respondent., G.R. No. 199648, January 28, 2015, focusing on “Earnest money - Failure to return
earnest money”:
Petitioner: First Optima Realty Corporation
Respondent: Securitron Security Services, Inc.
Legal Basis of Supreme Court: Article 1482 of the Civil Code of the Philippines
Doctrine Applied in The Case:
 Earnest Money in Perfected Sale: Earnest money signifies a perfected contract of sale and forms part
of the purchase price. However, it's essential to differentiate earnest money from other forms of payment
made before a sale is finalized, such as a guarantee, deposit, or option money.
 Prior Agreement Necessary: The payment of earnest money suggests a prior perfected contract of sale.
Without a meeting of the minds on the object, price, and consent, the payment cannot be considered
earnest money.
 Irregular Payment and Consent: Courts won't uphold agreements where one party uses irregular
payment methods to force a sale, especially when clear consent from the seller is absent. The seller's
right to freely consent to the transaction is paramount.
 Clean Hands Doctrine: The legal principle of "clean hands" requires both parties in a dispute to have
acted ethically and in good faith. A party that has acted improperly may not receive favorable
consideration from the court, even if the other party has also acted improperly.
Facts of the Case (Only relevant and be detailed):
 First Optima Realty, a real estate company, owned a property that Securitron Security Services wanted to
purchase.
 Securitron, through its General Manager, Antonio Eleazar, made an initial offer to purchase the property.
 While negotiations took place, First Optima, represented by its Executive Vice-President, Carolina T.
Young, did not agree to sell and informed Securitron that board approval was necessary.
 Despite the lack of agreement, Securitron sent a check for ₱100,000 to First Optima, referring to it as
earnest money for the property.
 This check, along with a letter, was delivered to First Optima’s receiving clerk, not directly to Young.
 The receiving clerk issued a provisional receipt acknowledging the payment as earnest money.
 After a year, First Optima informed Securitron that it would not sell the property and offered to return
the money.
 Securitron filed a case for specific performance, arguing that the payment constituted earnest money and
proved a perfected sale agreement.
Petitioner’s Contention:
 First Optima argued that it never agreed to sell the property, and the check was not earnest money but a
deposit made without a finalized agreement.
 They emphasized that the check was given to a receiving clerk, not an authorized representative, and that
board approval, which was never given, was necessary for the sale.
Respondent’s Contention:
 Securitron argued that First Optima's acceptance of the check, deposit into their account, and failure to
return it for over a year indicated their consent to the sale.
 They claimed that negotiations had occurred, and First Optima's silence on certain matters implied
agreement.
Issues:
 Did Securitron's actions constitute a valid payment of earnest money, signifying a perfected contract of
sale?
 Should First Optima be compelled to return the money, given the circumstances of the payment and the
lack of a finalized agreement?
Held (Yes/No answers to the Issue):
 No. The check was not considered earnest money.
 Yes. First Optima was ordered to return the money.
Reason for Supreme Court Decision:
  The Supreme Court ruled that Securitron’s actions did not establish a perfected contract of sale.
 There was no meeting of the minds, as First Optima never agreed to the sale price, and their actions did
not imply consent.
 The court highlighted Securitron’s irregular actions in sending the check and letter to the receiving clerk,
bypassing the authorized negotiator, Young.
 This, coupled with the lack of a prior agreement, suggested an attempt to force the sale upon First
Optima, which the court refused to condone.
 While the court ordered the return of the ₱100,000, it acknowledged Securitron’s improper conduct in
the attempted transaction.
Significance of the Case:
 The case emphasizes the importance of a clear and perfected contract of sale before any payment can be
considered earnest money.
 It clarifies that the mere acceptance or deposit of a check, without a binding agreement, does not
constitute a perfected sale.
 The ruling underscores the court’s stance against upholding agreements reached through irregular or
forceful tactics that undermine free consent.
 The case highlights the importance of conducting business through proper channels, particularly in real
estate transactions involving substantial sums and corporate entities.
 Finally, it exemplifies the court's application of the "clean hands" doctrine, where it may consider both
parties' conduct when deciding a case, even if a strict legal interpretation might favor one side.

3) Constructive Delivery

Spouses Santiago v. Villamor Case Digest (Rules on Constructive Delivery)

Here is the filled-out case digest template for Spouses Eros to Santiago and Nelsie Santiago, Petitioners, vs.
Mancer Villamor, Carlos Villamor, John Villamor and Domingo Villamor, Jr., Respondents., G.R. No. 168499, 26
November 2012, focusing on “Delivery – Rules on Constructive Delivery”:
Petitioner: Spouses Eros to Santiago and Nelsie Santiago
Respondent: Mancer Villamor, Carlos Villamor, John Villamor, and Domingo Villamor, Jr.
Legal Basis of Supreme Court: Articles 1477, 1497, and 1498 of the Civil Code of the Philippines
Doctrine Applied in The Case:
 Constructive Delivery: While a public instrument like a deed of sale usually implies delivery, this is
merely a prima facie presumption. It can be negated if the seller doesn’t have actual possession of the
property, meaning they can't transfer what they don't possess. Actual delivery to the buyer is essential for
ownership transfer.
 Good Faith of a Buyer: A buyer is considered in good faith if they are unaware of conflicting claims or
interests in the property and pay a fair price. However, if someone other than the seller possesses the
property, the buyer must investigate. Failing to do so negates the claim of good faith.
Facts of the Case (Only relevant and be detailed):
 The case involves a dispute over a 4.5-hectare coconut land in Masbate.
 The original owners, the spouses Villamor Sr., mortgaged the land, which was later foreclosed and
acquired by San Jacinto Bank.
 The respondents (children of Villamor Sr.) made installment payments to the bank to buy the land.
Simultaneously, the bank, under questionable circumstances, issued a deed of sale to Villamor Sr.,
who then sold the land to the petitioners.
 This led to two separate cases: a specific performance case by the respondents against the bank (which
they won, confirming their ownership) and the present case, a quieting of title case by the petitioners.
Petitioner’s Contention:
 The petitioners argued they were rightful owners as they bought the land from Villamor Sr., who had a
deed of sale from the bank.
 They claimed their purchase was in good faith and that the respondents’ possession was simply a
customary practice of children using their parents' property.
Respondent’s Contention:
 The respondents argued they had legal title because they completed the land purchase from the bank and
were in actual possession.
 They contested the petitioners' claim of good faith, arguing they should have investigated their
(respondents’) possession.
Issues:
 Did the execution of the deed of sale in favor of the petitioners constitute a valid delivery, considering
the respondents' actual possession of the land?
 Were the petitioners considered buyers in good faith, given the respondents' possession?
Held (Yes/No answers to the Issue):
 No. There was no valid delivery to the petitioners.
 No. The petitioners were not considered buyers in good faith.
Reason for Supreme Court Decision:
 The court ruled that although a deed of sale usually implies delivery, this didn’t apply because the sellers
(Villamor Sr.) weren't in actual possession. The respondents were, making the “constructive
delivery” to the petitioners void.
 The court rejected the petitioners' good faith argument, stating they should have investigated why
the respondents possessed the land. Their failure to do so made them negligent, not good faith
buyers.
Significance of the Case:
 This case clarifies the concept of constructive delivery in property sales, highlighting that it's not enough
to solely rely on documents. The seller must have actual possession and deliver it to the buyer.
 It underscores the importance of a buyer's responsibility to investigate when someone other than the
seller possesses the property. Ignoring this responsibility can negate a claim of good faith, even if the
buyer was genuinely unaware of any issues.

San Lorenzo Development Corp. v. CA Case Digest (Constructive Delivery)

Here is the completed case digest template for San Lorenzo Development Corporation, Petitioner, vs. Court of
Appeals, Pablo S. Babasanta, SPS. Miguel Lu and Pacita Zavalla Lu, Respondents, G.R. No. 124242, January 21,
2005, focusing on “Constructive Delivery”:
Petitioner: San Lorenzo Development Corporation (SLDC)
Respondent: Court of Appeals, Pablo S. Babasanta, Spouses Miguel Lu and Pacita Zavalla Lu
Legal Basis of Supreme Court: Articles 1477, 1497, 1498, and 1544 of the Civil Code of the Philippines
Doctrine Applied in The Case:
 Perfection vs. Consummation of Sale: While a contract of sale is perfected by mere consent, the actual
transfer of ownership happens upon delivery. A public instrument like a deed of sale can signify delivery
but doesn't guarantee ownership transfer if the seller isn't in possession.
 Double Sale: When a property is sold to two different buyers, several factors determine ownership. For
immovable property:
o Registration: The buyer who registers the sale in good faith first gains ownership. "Good faith"
means being unaware of any conflicting claims and exercising due diligence.
o Possession: If no registration exists, the buyer who first took possession in good faith becomes
the owner.
o Date of Title: If neither registration nor possession is clear, the buyer with the older title,
acquired in good faith, is preferred.
 Notice of Lis Pendens: A notice of lis pendens warns potential buyers that the property is under
litigation. While it doesn't automatically invalidate a sale, it emphasizes the need for caution and due
diligence. If a buyer registers the sale after becoming aware of a previous sale, the registration is in bad
faith and doesn't guarantee ownership.
 Contract to Sell vs. Contract of Sale: Distinguishing between these is crucial. In a contract of sale,
ownership passes to the buyer upon delivery. In a contract to sell, ownership remains with the seller until
full payment, which acts as a suspensive condition.
Facts of the Case (Only relevant and be detailed):
  Spouses Lu owned two parcels of land in Laguna.
 They entered into an agreement with Babasanta, where he made partial payments towards purchasing the
land.
 While this agreement was in place, the Spouses Lu sold the same land to SLDC, who was unaware of
the previous deal with Babasanta.
 SLDC paid a significant portion of the purchase price and received a Deed of Absolute Sale with
Mortgage. They also took possession of the property.
 Later, SLDC became aware of Babasanta's claim and a notice of lis pendens was annotated on the
property title.
Petitioner’s Contention:
 SLDC argued they were buyers in good faith, having no knowledge of Babasanta’s claim when they
bought and took possession of the land.
 They emphasized they were under no obligation to look beyond the clean title they received from the
Spouses Lu.
Respondent’s Contention:
 Babasanta argued SLDC couldn't claim ownership because they became aware of his claim before
registering the sale, making their registration one done in bad faith.
 He contended that SLDC should have investigated the reason behind a manager’s check issued in his
favor by SLDC, suggesting knowledge of the prior transaction.
Issues:
 Was the agreement between Babasanta and the Spouses Lu a contract of sale or a contract to sell?
 Did SLDC acquire ownership through constructive delivery despite the prior agreement between
Babasanta and the Spouses Lu?
 Was SLDC a buyer in good faith, given the circumstances surrounding the sale and the later annotation
of lis pendens?
Held (Yes/No answers to the Issue):
 No. The agreement was deemed a contract to sell, not a contract of sale.
 Yes. SLDC acquired ownership through constructive delivery and their prior possession in good faith.
 Yes. SLDC was considered a buyer in good faith.
Reason for Supreme Court Decision:
 The Court determined that the agreement between Babasanta and the Spouses Lu was a contract to sell
because ownership wasn't meant to transfer until full payment, which Babasanta never completed.
 While acknowledging the notice of lis pendens, the Court ruled it didn’t affect SLDC's claim because
they already had possession in good faith before the notice was annotated.
 The Court upheld SLDC's status as a buyer in good faith as they were unaware of Babasanta's claim
when they purchased the land. Additionally, they were not obligated to investigate beyond the clean title
they received.
 Even considering a potential double sale scenario, the Court ruled in favor of SLDC due to their prior
possession in good faith, which outweighed Babasanta’s claim based on a contract to sell.
Significance of the Case:
 The case stresses the difference between perfecting and consummating a sale, highlighting the necessity
of delivery for ownership transfer.
 It clarifies that a public instrument, while implying delivery, doesn't guarantee it, especially if the seller
isn't in actual possession.
 The ruling underscores the importance of good faith in property transactions and the various factors that
determine ownership in a double sale situation, particularly the significance of possession.
 It illustrates that a notice of lis pendens, while a warning, doesn't automatically void a sale, particularly
when a buyer acts in good faith and completes the transaction (including taking possession) before the
annotation.
 Finally, the case distinguishes between a contract to sell and a contract of sale, a differentiation crucial in
determining rights and obligations in property disputes.

4) Gross Inadequacy of Price

Bravo-Guerrero v. Bravo Case Digest (Gross Inadequacy vs. Simulated Price)
Here is the filled-out case digest template for Lily Elizabeth Bravo-Guerrero, et al., Petitioners, vs. Edward P.
Bravo, represented by his attorney-in-fact Fatima C. Bravo, respondent, and David B. Diaz, Jr., intervenor-
respondent., G.R. No. 152658, July 29, 2005, focusing on “Gross Inadequacy vs. Simulated Price”:
Petitioner: Lily Elizabeth Bravo-Guerrero, Ben Mauricio P. Bravo, Roland P. Bravo, Jr., Ofelia Bravo-Quiestas,
Heirs of Corpusinia Bravo-Nior, represented by Lily Elizabeth Bravo-Guerrero as their attorney-in-fact, and
Honorable Florentino A. Tuason, Jr., Presiding Judge, Regional Trial Court, Branch 139, Makati City
Respondent: Edward P. Bravo, represented by his attorney-in-fact Fatima C. Bravo, and David B. Diaz, Jr.
Legal Basis of Supreme Court: Articles 166, 173, 1878, 1357, 1475, and 1409 of the Civil Code of the
Philippines
Doctrine Applied in The Case:
 Simulated Sale vs. Gross Inadequacy of Price: The court distinguishes between a simulated sale,
where parties have no real intention to be bound by the contract, and a sale with grossly inadequate
price, where a genuine agreement exists despite the low price. While a simulated sale is void, a sale with
inadequate price might be valid unless proven to be a result of fraud, mistake, undue influence, or a
defect in consent.
 Effect of Gross Inadequacy of Price: Gross inadequacy of price, by itself, doesn’t invalidate a sale
contract. It might raise concerns about the parties’ true intentions but won't automatically void the
agreement unless other factors like fraud or mistake are present.
 Burden of Proof in Alleged Simulation: The burden of proving a contract’s simulation rests on the
party making the allegation. Clear and convincing evidence is needed to overcome the presumption of
regularity enjoyed by a notarized document like a deed of sale.
 Authority Granted by a General Power of Attorney: Even if labeled a "general power of attorney," a
document can still grant specific authority for acts like selling a property, fulfilling the requirement for a
"special power of attorney" as long as the intention is clear and specific.
Facts of the Case (Only relevant and be detailed):
 The case revolves around two parcels of land in Makati City inherited by the heirs of Mauricio and
Simona Bravo.
 Mauricio, holding a General Power of Attorney (GPA) from Simona, sold the land to three of their
grandchildren for ₱1,000 and the assumption of existing mortgages.
 Years later, another heir, Edward, filed for partition, claiming the sale was simulated due to the low price
and arguing a lack of Simona’s consent.
 The Court of Appeals annulled the sale, citing the absence of Simona’s consent and the grossly
inadequate price.
Petitioner’s Contention:
 The petitioners (the grandchildren who bought the land) argued the sale was valid.
 They claimed Simona’s consent was given through the GPA, which authorized Mauricio to sell the
properties.
 They also argued the price wasn't grossly inadequate, considering it included mortgage assumption, and
presented tax declarations from around the time of the sale to support their claim.
Respondent’s Contention:
 The respondents (Edward and another heir) argued the sale was simulated because of the significantly
low price compared to the properties' actual value.
 They also claimed the GPA didn’t cover the sale, as it lacked Simona's explicit consent.
Issues:
 Was the sale simulated due to the alleged gross inadequacy of price?
 Was the sale void because Simona didn't explicitly consent to it?
Held (Yes/No answers to the Issue):
 No. The sale was not simulated.
 No. Simona’s consent was given through the GPA.
Reason for Supreme Court Decision:
 The Court differentiated between "simulation of a contract," where the parties never intended to be
bound, and a contract with "grossly inadequate consideration," which can still be valid.
 The Court found a genuine agreement existed in the sale, as the parties agreed on a price, even if
allegedly inadequate. The Court emphasized that inadequacy of price alone doesn't invalidate a
sale unless other factors like fraud, mistake, or undue influence are proven.
  The Court rejected the argument of gross inadequacy, stating that the respondents failed to establish it.
The price included not just the ₱1,000 cash but also the assumption of a ₱15,000 mortgage, making the
total consideration ₱16,000.
 The Court recognized that the properties' value might have increased significantly since the sale, but it
considered the value during the time of the sale (1970) as relevant. Tax declarations from 1967, closer to
the sale date, placed the properties' value at ₱16,160, making the ₱16,000 consideration reasonable.
 The Court also dismissed the claim of lack of consent. It found that the GPA, while broadly worded,
contained clear and specific authorization for Mauricio to sell the properties. This specificity, according
to the Court, satisfied the requirement of a "special power of attorney" for property sales.
 The Court emphasized that the respondents, as the ones claiming simulation, carried the burden of proof.
They failed to provide sufficient evidence to overturn the presumption of regularity that a notarized
document like a deed of sale enjoys.
Significance of the Case:
 This case distinguishes between a simulated sale, which is void, and a sale with inadequate price,
which can be valid unless proven otherwise.
 It emphasizes that while gross inadequacy of price raises questions, it doesn't automatically void a
contract. The presence of fraud, mistake, undue influence, or a defect in consent needs to be
established.
 It clarifies that a broadly-worded General Power of Attorney can still grant specific authority for actions
like property sales if the intention is clear.
 It highlights the importance of the burden of proof in contract disputes, particularly in cases alleging
simulation, where clear and convincing evidence is required.

Buenaventura v. CA Case Digest (Gross Inadequacy)

Here is the filled-out case digest template for Spouses Bernardo Buenaventura and Consolacion Joaquin, et al.,
petitioners, vs. Court of Appeals, Spouses Leonardo Joaquin and Feliciana Landrito, et al., respondents., G.R.
No. 126376, November 20, 2003, focusing on “Gross Inadequacy”:
Petitioner: Spouses Bernardo Buenaventura and Consolacion Joaquin, Spouses Juanito Edra and Nora Joaquin,
Spouses Rufino Valdoz and Emma Joaquin, and Natividad Joaquin
Respondent: Court of Appeals, Spouses Leonardo Joaquin and Feliciana Landrito, Spouses Fidel Joaquin and
Conchita Bernardo, Spouses Tomas Joaquin and Soledad Alcoran, Spouses Artemio Joaquin and Socorro
Angeles, Spouses Alexander Mendoza and Clarita Joaquin, Spouses Telesforo Carreon and Felicitas Joaquin,
Spouses Danilo Valdoz and Fe Joaquin, and Spouses Gavino Joaquin and Lea Asis
Legal Basis of Supreme Court: Articles 1355 and 1470 of the Civil Code of the Philippines
Doctrine Applied in The Case:
 Gross Inadequacy of Price and its Effect: Gross inadequacy of price, on its own, doesn't invalidate a
contract of sale. While it might raise concerns about the true intentions of the parties involved, it won't
automatically nullify the agreement unless proven to be a result of fraud, mistake, undue influence, or a
defect in consent.
 Real Party in Interest: In cases concerning the annulment of contracts, the individuals considered "real
parties" are those who are directly involved in the agreement, are bound by it (either primarily or
secondarily), or whose rights are affected by the contract. They should also be able to demonstrate the
harm they would suffer because of the contract, even if they were not directly involved in it.
Facts of the Case (Only relevant and be detailed):
 This case involves multiple parcels of land originally owned by spouses Leonardo Joaquin and Feliciana
Landrito.
 The parents sold these lots to six of their children.
 The other children, feeling disadvantaged, filed a complaint. They argued the sales were void, alleging a
lack of genuine consideration and that the prices were incredibly low compared to the actual value of the
properties. They aimed to have their parents' land transfers declared invalid.
 The trial court ruled in favor of the defendant children who bought the land and dismissed the case. It
determined that the sales were made with valid consideration and that the plaintiffs didn’t have a valid
cause of action because their right to inheritance (legitime) could only be claimed upon their parents’
death.
 The Court of Appeals supported the trial court’s decision, highlighting that the plaintiffs lacked the
 standing to challenge the sales since they weren't parties to the deeds and hadn't demonstrated any direct
injury.
Petitioner’s Contention:
 The petitioners (the siblings who challenged the sales) claimed the sales were part of a deliberate plan to
unfairly deprive them of their rightful inheritance from their parents' estate. They argued the sales should
be voided due to the allegedly very low prices.
Respondent’s Contention:
 The respondents (the siblings who bought the land) argued the sales were legitimate, conducted with fair
consideration, and that their parents willingly agreed to them.
Issues:
 Did the petitioners possess legal standing to challenge the land sales?
 Were the Deeds of Sale void because of the alleged lack of consideration?
 Were the Deeds of Sale void due to the claimed gross inadequacy of price?
Held (Yes/No answers to the Issue):
 No. Petitioners lacked legal standing to challenge the land sales.
 No. The Deeds of Sale were not void for lack of consideration.
 No. The Deeds of Sale were not void due to gross inadequacy of price.
Reason for Supreme Court Decision:
 The Court explained that the petitioners' claim of being unjustly deprived of their inheritance (legitime)
was premature. They hadn’t suffered any actual harm because inheritance rights come into effect only
after the parents' death. Until then, the parents had the right to manage and dispose of their assets as they
saw fit.
 The Court emphasized that a contract of sale is validated by a mutual agreement on a price between the
buyer and seller. The act of paying the price itself is part of executing the contract, separate from the
agreement that creates the contract. A failure to pay is a breach of contract, distinct from a lack of
consideration, which prevents a valid contract from existing in the first place.
 The Court also pointed out that petitioners did not prove the prices were completely fake. Evidence
showed the Deeds of Sale recorded a price for each property sold. The respondent siblings also
confirmed that they had reached a mutual price agreement with their father and had fully paid him at the
time of the complaint.
 The court acknowledged that the petitioners were concerned about receiving less inheritance, but they
failed to demonstrate any legal entitlement to the properties. Their right to the property was deemed
"inchoate," meaning it only became active upon their parents' death.
 The Court stated that while a significantly low price in a sale might raise concerns, it wouldn't
automatically void the contract unless fraud, mistake, undue influence, or a defect in consent were
proven.
 The Court determined that the petitioners failed to prove any of the conditions that would invalidate the
sales under Articles 1355 and 1470 of the Civil Code. Despite the argument of a low price, the
respondents believed they had received a fair deal for what they gave, and there's no legal requirement
for the price to match the exact value of the sale item.
Significance of the Case:
 This case reaffirms that gross inadequacy of price, by itself, doesn’t automatically void a contract
of sale. The presence of other factors such as fraud, mistake, undue influence, or defect in consent needs
to be proven for the contract to be invalidated.
 It stresses that while courts can intervene to rectify situations where the law has been violated, they
cannot get involved in private matters like bad bargains or unwise investments.
 This case underscores the importance of "real party in interest," meaning that the person filing a
case should have a direct stake in the matter and should be able to show how they are harmed by
the issue at hand.
 It clarifies that legal heirs have an "inchoate right," meaning a right that's not yet active, over their
parents' property. This right becomes active only upon the parents' death, and until then, the parents have
the right to sell or dispose of their property as they choose.
 5) Simulated/Fictitious Sale

Spouses Lequin Vs. Sps. Vizconde Case Digest (Simulated/Fictitious Sale)

Here is the filled-out case digest template for Spouses Ramon Lequin and Virginia Lequin, Petitioners, vs.
Spouses Raymundo Vizconde and Salome Lequin Vizconde, Respondents., G.R. No. 177710, October 12, 2009,
focusing on “Simulated/Fictitious Sale”:
Petitioner: Spouses Ramon Lequin and Virginia Lequin
Respondent: Spouses Raymundo Vizconde and Salome Lequin Vizconde
Legal Basis of Supreme Court: Articles 1330, 1338, 1339, 1471, and 22 of the Civil Code of the Philippines
Doctrine Applied in The Case:
 Simulated Sale/Lack of Consent: A contract of sale is simulated, and therefore void, when the parties
involved do not genuinely intend to be bound by the agreement, as demonstrated by the lack of true
consent from one of the parties.
 Fraud and Misrepresentation: Fraudulent actions, such as concealing or misrepresenting crucial
information that directly influences another party's agreement to a contract, are grounds for declaring it
null and void.
Facts of the Case (Only relevant and be detailed):
 Ramon Lequin and Salome Vizconde are siblings. Raymundo Vizconde is Ramon's brother-in-law. This
family connection is important to the events of the case.
 Petitioners bought a 10,115 sq. meter lot from Carlito de Leon in 1995. Respondent Raymundo Vizconde
acted as the negotiator for this purchase.
 Later, Respondents told the Petitioners they had also bought a 1,012 sq. meter lot next to the Petitioners'
land from the same seller. The Petitioners, trusting their relatives, believed their claim and even built
their house on a 500 sq. meter part of what they thought was a separate lot.
 Eventually, it was discovered that the 1,012 sq. meter lot the Respondents claimed as theirs was actually
part of the larger piece of land the Petitioners had originally purchased.
 On the advice of their lawyer, the Petitioners entered into a contract of sale (Kasulatan) with the
Respondents. The contract made it seem like the Petitioners were selling the Respondents the 512 sq.
meters where their house was built. The document stated a price of PhP 15,000, but the Respondents
never paid this amount. In truth, the Petitioners gave the Respondents PhP 50,000 for the portion of land
where the Petitioners’ house was built.
 The situation escalated when the Respondents opposed the Petitioners trying to develop a dried-up canal
bordering their property. The Respondents claimed they owned the canal. This action led the Petitioners
to investigate the actual land ownership.
 The Petitioners learned from the original seller, Carlito de Leon, that he had only sold the dried-up canal
to the Respondents, not the 1,012 sq. meter lot they had claimed. This discovery prompted the
Petitioners to file a lawsuit asking the court to nullify the contract of sale, order the return of the PhP
50,000 they had paid, and award damages.
Petitioner’s Contention:
 The Petitioners argued that the contract of sale (Kasulatan) was invalid because their agreement to the
contract had been improperly influenced by the Respondents’ false claims about the land they owned.
The Petitioners also claimed that the contact was not valid because the Respondents did not pay the
agreed upon price.
Respondent’s Contention:
 The Respondents maintained that the contract of sale was legitimate and binding. They claimed it was a
real transaction and denied any fraud or simulation.
Issues:
1. Was the contract of sale (Kasulatan) for the 512 sq. meter lot retractable because the Respondents’ fraud
invalidated the Petitioners’ consent?
2. Was the contract of sale invalid due to a lack of proper exchange of value?
Held (Yes/No answers to the Issue):
 Yes. The Kasulatan was voidable due to vitiated consent.
 Yes. The Kasulatan was void for lack of consideration.
Reason for Supreme Court Decision:
 Simulated Sale and Vitiated Consent: The Court determined that Raymundo Vizconde, having been
involved in the initial sale of the 10,115 sq. meter lot to the Petitioners, was fully aware that the
 Respondents' claim to the 1,012 sq. meter lot was false. The Court found that Raymundo concealed and
misrepresented this important fact, which directly influenced the Petitioners’ decision to enter into the
contract. This deception, the Court found, meant the Petitioners did not truly consent to the contract,
making it null and void.
 Lack of Consideration: The Supreme Court agreed with the trial court's finding that the PhP 15,000
recorded as the purchase price in the Kasulatan was never actually paid by the Respondents. The Court
found that even though the contract mentioned a price, the lack of actual payment showed that there was
no true exchange of value (consideration). The Court also noted that the Respondents failed to offer any
evidence that they had paid, leading the Court to conclude that the sale was a sham from the beginning,
and, therefore, void.
Significance of the Case:
 Fraudulent Misrepresentation Invalidates Contracts: This case emphasizes how important it is that
the information exchanged in a contract is truthful, especially when a relationship of trust exists between
the parties. The Court found that when one party misrepresents significant facts about the transaction, it
can result in the contract being declared void.
 Consideration is Essential: The case reaffirms that a contract of sale absolutely must involve a real
exchange of something of value. Simply writing a price in a contract is not enough to make it binding.
The court’s decision reinforces the concept that there must be actual payment, or a legitimate and clear
agreement for payment in the future.
 Simulated Sales are Not Enforceable: The Court’s ruling in this case underscores the principle that
courts will not uphold agreements that are not genuine or are intended to misrepresent the true nature of
a transaction. Simulated or fictitious sales lack the fundamental element of genuine consent and are
therefore not enforceable.

Guerrero vs. Bravo Case Digest (Simulated/Fictitious Sale)

Here is the filled-out case digest template for Lily Elizabeth Bravo-Guerrero, et al., Petitioners, vs. Edward P.
Bravo, Respondent., G.R. No. 152658, July 29, 2005, focusing on the topic of "Simulated/Fictitious Sale":
Petitioner: Lily Elizabeth Bravo-Guerrero, Ben Mauricio P. Bravo, Roland P. Bravo, Jr., Ofelia Bravo-Quistas,
Heirs of Corpusinia Bravo-Nior, represented by Lily Elizabeth Bravo-Guerrero as their attorney-in-fact, and
Honorable Florentino A. Tuason, Jr., Presiding Judge, Regional Trial Court, Branch 139, Makati City
Respondent: Edward P. Bravo, represented by his attorney-in-fact Fatima C. Bravo, and David B. Diaz, Jr.,
intervenor-respondent
Legal Basis of Supreme Court: Articles 166, 173, 1878, 1345, 1346, 1352, 1413 of the Civil Code of the
Philippines
Doctrine Applied in The Case:
 Voidable vs. Void Contracts: Contracts alienating conjugal real property without the wife's consent are
voidable (binding unless annulled by a competent court), not void ab initio (invalid from the beginning).
 Simulation of Contract vs. Gross Inadequacy of Price: A simulated contract is void because there is
no real agreement between the parties. A contract with inadequate consideration, however, might still
reflect a true agreement. Gross inadequacy of price alone does not void a contract unless there is fraud,
mistake, or undue influence.
 Presumption of Regularity: A notarized document, like a deed of sale, is presumed to be regular and
duly executed unless proven otherwise by clear and convincing evidence.
Facts of the Case (Only relevant and be detailed):
 Spouses Mauricio and Simona Bravo owned two parcels of land. After Simona gave Mauricio a general
power of attorney (GPA) to manage the properties, Mauricio mortgaged the properties, and later sold
them to his children (Roland, Ofelia, and Elizabeth) in a Deed of Sale.
 Although the deed was notarized, it was not annotated on the titles, and mortgage payments continued in
Mauricio's name.
 After the death of both parents, one of their grandchildren, Edward, filed for judicial partition of the
properties, claiming the Deed of Sale was simulated to prejudice other heirs. He later amended his
complaint to include annulment of the Deed of Sale.
 Another grandchild, David Jr., intervened, also challenging the Deed of Sale's validity.
Petitioner’s Contention: The Petitioners (children who purchased the property) maintained that the sale was
valid and that the Deed of Sale was in effect for many years without being questioned. They also argued that
Simona authorized Mauricio to sell the properties through the GPA.
Respondent’s Contention: The Respondents (grandchildren left out of the sale) argued that: 1) the sale was void
because it lacked Simona's consent, and 2) the sale was simulated, as demonstrated by the allegedly inadequate
consideration given for the properties.
Issues:
1. Was the Court of Appeals correct in deeming the Deed of Sale void due to the lack of Simona's consent?
2. Was the Court of Appeals correct in ordering the properties' partition?
Held (Yes/No answers to the Issue):
1. No. The Supreme Court found that the sale was not void because Simona had authorized Mauricio to sell
the property in the GPA, and even if she had not, only Simona had the right to challenge the sale during
her lifetime.
2. Yes, but with modifications. The Supreme Court found that the partition should include Edward Bravo as
an heir.
Reason for Supreme Court Decision:
 Regarding the wife’s consent, the Court found that:
o Article 166 of the Civil Code, requiring spousal consent, was not applicable because the
properties might have been acquired before the law's effectivity.
o Even if applicable, only the wife (Simona) could have challenged the sale, and only within ten
years. She did neither.
o The GPA gave Mauricio the authority to sell, satisfying Article 1878.
 Regarding the sale’s legitimacy, the Court found that:
o Inadequacy of price alone does not invalidate a sale unless there is proof of fraud, mistake, or
undue influence, none of which were present.
o The Respondents failed to prove that the price was grossly inadequate.
o The Petitioners provided evidence supporting the sale’s validity (Deed of Sale, GPA, receipts,
Mortgage Release, tax declarations).
 Regarding the partition, the Court found that:
o The partition should recognize Edward's claim as an heir since his father was likely one of the
buyers.
Significance of the Case:
 Clarifies the difference between void and voidable contracts in the context of spousal consent in
property sales.
 Highlights the distinct legal concepts of simulated sale and gross inadequacy of price, emphasizing
that inadequacy of price alone does not automatically nullify a contract.
 Underscores the importance of clear and convincing evidence to overturn the presumption of
regularity in notarized documents.