Province of Cebu v. Heirs of Rufina Morales

Summary

The Province of Cebu challenged the Court of Appeals decision ordering it to convey Lot 646-A-3 to the heirs of Rufina Morales. Originally, the Province leased the lot to Morales in 1961, then donated it to City of Cebu in 1964. The City sold the lot to Morales at public auction in 1965, but through a 1974 compromise agreement, the lot was returned to the Province. The Supreme Court affirmed that a valid contract of sale was perfected between the City and Morales when she matched the highest bid and paid partial payment. As successor-in-interest, the Province was bound by this contract. Under Article 1592 of the Civil Code, the heirs could still tender payment since no demand for rescission had been made. The case establishes that contracts of sale are consensual and perfected upon meeting of minds, regardless of formal documentation, and that successor-in-interest are bound by their predecessor's valid contracts.