Professional Documents
Culture Documents
A contract of sale is consensual in nature and is perfected upon mere 1. Effect of document denominated Agreement between Mr. Sosa &
meeting of the minds. When there is merely an offer by one party without Popong Bernardo of Toyota Shaw, Inc.
acceptance of the other, there is no contract. When the contract of sale is
not perfected, it cannot, as an independent source of obligation, serve as a Toyota Shaw, Inc. vs. CA, L-11650, May 23, 1995
binding juridical relation between the parties.
FACTS: Luna L. Sosa, respondent, wanted to purchase a Toyota Lite Ace.
To convert the offer into a contract, the acceptance must be absolute He transacted business with Popong Bernardo, sales representative of
and must not qualify the terms of the offer; it must be plain, unequivocal, Toyota. A Vehicle Sales Proposal (VSP) was accomplished and Mr. Sosa
unconditional and without variance of any sort from the proposal.
paid a down payment of P100,000. On the scheduled date and time for
A qualified acceptance or one that involves a new proposal the delivery of the car, Toyota refused to release the car because the
constitutes a counter-offer and a rejection of the original offer. A counter- financing company, B.A. Finance Corporation, refused to finance the
offer is considered in law, a rejection of the original offer and an attempt to outstanding balance. Mr. Sosa demanded the return of the down
end the negotiation between the parties on a different basis. Consequently, payment, which Toyota honored, without prejudice to future claim for
when something is desired which is not exactly what is proposed in the offer, damages.
such acceptance is not sufficient to guarantee consent because any
modification or variation from the terms of the offer annuls the offer. The ISSUE: Was this document, executed and signed by the petitioner's sales
acceptance must be identical in all respects with that of the offer so as to representative, a perfected contract of sale, binding upon the petitioner,
produce consent or meeting of the minds.
breach of which would entitle the private respondent to damages and
Stages of a contract of sale: attorney's fees?
C. Characteristics
B. Elements
a. Consensualperfected by mere consent.
a. Essential Elements (without which there can be no valid of sale)
b. Bilateral (reciprocal)both parties are bound by obligations dependent
1. Consent or meeting of the mindsconsent to transfer ownership in
upon each other. The power to rescind is implied, neither party incurs delay
exchange for the price.
if the party does not comply, from the moment one of the parties fulfills his
obligation, the default by the other begins w/out need of prior demand.
2. Determinate subject matter includes generic objects that are least
determinable
c. Onerousvaluable consideration must be given in order to acquire rights.
*segregated/separated of the same class
d. Nominatethe Code refers to it by special designation or name, that is,
the contract of sale.
3. Price certain in money or its equivalent
e. Principalfor the contract of sale to validly exist, there is no necessity for
b. Natural Elements (those which are inherent in the contract, and which in it to depend upon the existence of another contract.
the absence of any contrary provision, are deemed to exist in the contract)
C. Sale vs. Agency to sell (1466) In order to classify a contract, due regard must be given to its essential
clauses. In the contract in question, what was essential, as constituting its
Art. 1466. In construing a contract containing provisions characteristic of cause and subject matter, is that the plaintiff was to furnish the defendant
both the contract of sale and of the contract of agency to sell, the essential with the beds which the latter might order, at the price stipulated, and that
clauses of the whole instrument shall be considered. (n) the defendant was to pay the price in the manner stipulated. There was the
obligation on the part of the plaintiff to supply the beds, and, on the part of
Cases: the defendant, to pay their price. These features exclude the legal
conception of an agency or order to sell whereby the mandatory or agent
1) effect of agreement for exclusive sale of beds where the other party is received the thing to sell it, and does not pay its price, but delivers to the
entitled to commission, among others principal the price he obtains from the sale of the thing to a third person,
and if he does not succeed in selling it, he returns it.
Quiroga vs. Parsons Hardware co.
Sale vs. Lease of service or contract for a piece of work (1467)
Facts:
Art. 1467. A contract for the delivery at a certain price of an article which the
The defendant was granted by the plaintiff of the exclusive right to sell as an vendor in the ordinary course of his business manufactures or procures for
agent Quiroga beds in the Visayas at the invoice price in Manila. The the general market, whether the same is on hand at the time or not, is a
agreement was for the defendant to pay for the beds at a discount from 20% contract of sale, but if the goods are to be manufactured specially for the
to 25% as commission on the sales. The defendant shall pay the plaintiff customer and upon his special order, and not for the general market, it is a
claims that the defendant is his agent while defendant says he was merely contract for a piece of work. (n)
a purchaser.
Cases:
Issue:
1) Nature of transactions of company engaged in the design, supply
Is this a contract of sale or agency? and installation of certain type of air conditioning system.
Held:
e. lease of things - in that delivery in this latter contract does not involve a Contract of Lease with an Option
transfer of ownership
An option is a contract by which the owner of the property agrees
f. donation- in that this latter contract is gratuitous and requires special with another person that the latter shall have the right to buy the formers
formalities property at a fixed price within a certain time. It is a condition offered or
contract by which the owner stipulates with another that the latter shall
E. Promise to sell: when binding (Art. 1479) have the right to buy the property at a fixed price within a certain time, or
under, or in compliance with certain terms and conditions; or which gives to
--a bilateral promise to buy and sell requires NO CONSIDERATION the owner of the property the right to sell or demand a sale.
distinct from the selling price
An option is not of itself a purchase, but merely secures the privilege to buy.
--only the accepted unilateral promise to buy or sell that needs It is not a sale of property but a sale of the right to purchase. It is simply a
consideration distinct from the selling price contract by which the owner of the property agrees with another person
that he shall have the right to buy his property at a fixed price within a
a. If bilateral certain time. He does not sell his land; he does not then agree to sell it; but
he does sell something, i.e., the right or privilege to buy at the election or
--a bilateral promise to buy or to sell a certain thing for a option of the other party. Its distinguishing characteristic is that it imposes
price certain gives to the contracting parties personal rights no binding obligation on the person holding the option, aside from the
in that each has the right to demand from the other the consideration for the offer.
fulfillment of the obligation.
"An accepted unilateral promise" can only have a binding effect if supported
b. If unilateral by a consideration, which means that the option can still be withdrawn, even
if accepted, if the same is not supported by any consideration.
--the acceptance of a unilateral promise to sell must be plain, clear and
unconditional. Therefore, if there is qualified acceptance with terms different ii) Remedy of optionee
from the offer there is no acceptance, that there is no promise to buy and
there is no perfected sale. -Specific performance.
1. Option defined
"After the issues were joined, defendants filed a motion for summary Even on the premise that such right of first refusal has been decreed under a
judgment which was granted by the lower court. The trial court found that final judgment, like here, its breach cannot justify correspondingly an
defendants' offer to sell was never accepted by the plaintiffs for the reason issuance of a writ of execution under a judgment that merely recognizes its
that the parties did not agree upon the terms and conditions of the existence, nor would it sanction an action for specific performance without
proposed sale, hence, there was no contract of sale at all. Nonetheless, the thereby negating the indispensable element of consensuality in the
a. Absolute; or
Heirs of Mascunana vs. CA, G.R. No. 158646, June 23, 2005
Ramos vs. Heruela, G.R. No. 145330, Oct. 14, 2005
Facts: It is settled that a perfected contract of sale cannot be challenged on
the ground of the non-transfer of ownership of the property sold at that
Absolute Sale Conditional Sale time of the perfection of the contract, since it is consummated upon
delivery of the property to the vendee. It is through tradition or delivery
when title to the ownership remains that the buyer acquires ownership of the property sold. As provided in
property passes to the with the vendor and Article 1458 of the New Civil Code, when the sale is made through a public
vendee upon delivery of does not pass to the instrument, the execution thereof is equivalent to the delivery of the thing
the thing sold vendee until full which is the object of the contract, unless the contrary appears or can be
payment of the inferred. The record of the sale with the Register of Deeds and the issuance
purchase price. of the certificate of title in the name of the buyer over the property merely
bind third parties to the sale. As between the seller and the buyer, the
when there is no The full payment of transfer of ownership takes effect upon the execution of a public instrument
stipulation in the the purchase price covering the real property. Long before the petitioners secured a Torrens
contract that title to the partakes of a title over the property, the respondents had been in actual possession of
property remains with suspensive condition, the property and had designated Barte as their overseer.
the seller until full and non-fulfillment of
payment of the the condition Although denominated a Deed of Conditional Sale, a sale is still absolute
purchase price prevents the where the contract is devoid of any proviso that title is reserved or the right
obligation to sell from to unilaterally rescind is stipulated, e.g., until or unless the price is paid.
1. An executed contract, or which property (ownership) in the thing is Contract to Sell Contract of Sale
transferred from seller to buyer, and nonpayment of the price is a
negative resolutory condition. The payment in full of the The non-payment of the price
price is a positive suspensive is a RESOLUTORY condition,
2. An executory contract- ownership does not pass until some future time condition. Hence, if the i.e. the contract of sale may
price is not paid, it is as if by such occurrence put an
-the fulfillment of some condition, such as full payment of the the obligation of the seller end to a transaction that
purchase price. to deliver and to transfer once upon a time existed
ownership never became
c. Distinctions effective and binding.
Executed Contract Executory Contract Ownership is retained by Title over the property
the seller, regardless of generally passes to the buyer
Property ownership is No property is conveyed delivery and is not pass until upon delivery
conveyed fill payment of the price
Ong vs. CA, G.R. No. 97347, July6, 1999 Coronel vs. CA, G.R. No. 103577, Oct. 7, 1996
It is in the nature of a contract to sell. FACTS: Defendants Coronels issued a document, receipt of down payment,
in favor of Ramona. In the said document, it was stipulated that the
In a contract of sale, the title to the property passes to the vendee Coronels, upon receipt of the down payment in the amount of 50k (1.24M
upon the delivery of the thing sold; while in a contract to sell, ownership is, total price) for their inherited house and lot, bind themselves to the effect
by agreement, reserved in the vendor and is not to pass to the vendee that they will transfer, from their father, the transfer certificate title to their
until full payment of the purchase price. In a contract to sell, the payment names. After the TCT is under their name, they will execute immediately a
of the purchase price is a positive suspensive condition, the failure of deed of absolute sale in favor of Ramona and she will pay the balance of
which is not a breach, casual or serious, but a situation that prevents the 1.19M. The mother of Ramona, Concepcion, paid the 50k as down
obligation of the vendor to convey title from acquiring an obligatory force. payment. Thereafter, the Coronels transferred the said property in their
names.
Spouses Robles, respondents in the case at bar bound themselves
to deliver a deed of absolute sale and clean title covering the two parcels Coronels sold the property to Catalina for the amount of 1.58M after the
of land upon full payment by the buyer of the purchase price of latter paid a down payment of 300k. For this reason, Coronels canceled
P2,000,000.00. This promise to sell was subject to the fulfillment of the
Concepcion et al. filed a case against specific performance. A notice of lis Compared to Contract to sell
pendens was annotated at the back of the title. An adverse claim by
Catalina was also annotated. The Coronels executed a deed of absolute -ownership is transferred upon creation of necessary documents.
sale in favor of Catalina. Thus, a new title was issued in the name of
Catalina. Coronel vs CA
Both trial court and CA ruled in favor of Concepcion. It ordered the specific A contract to sell as defined hereinabove, may not even be considered as a
performance of the agreement. conditional contract of sale where the seller may likewise reserve title to the
property subject of the sale until the fulfillment of a suspensive condition,
ISSUE: legal determination of the document, Receipt of Downpayment because in a conditional contract of sale, the first element of consent is
present, although it is conditioned upon the happening of a contingent event
SC RULED that when the "Receipt of Down Payment" is considered in its which may or may not occur. If the suspensive condition is not fulfilled, the
entirety, it becomes more manifest that there was a clear intent on the part perfection of the contract of sale is completely abated (cf. Homesite and
of petitioners to transfer title to the buyer, but since the transfer certificate Housing Corp. vs. Court of Appeals, 133 SCRA 777 [1984]). However, if the
of title was still in the name of petitioner's father, they could not fully effect suspensive condition is fulfilled, the contract of sale is thereby perfected,
such transfer although the buyer was then willing and able to immediately such that if there had already been previous delivery of the property subject
pay the purchase price. This is a contract OF sale, SC affirmed the decision of of the sale to the buyer, ownership thereto automatically transfers to the
CA. buyer by operation of law without any further act having to be performed by
the seller.
In a contract of sale, the title passes to the vendee upon the delivery of the
thing sold; whereas in a contract to sell, ownership is not transferred upon Nabus vs. Pacson
delivery of the property but upon full payment of the purchase price. In the
former, the vendor has lost and cannot recover ownership until and unless Facts:
the contract is resolved or rescinded; whereas in the latter, title is retained
by the vendor until the full payment of the price, such payment being a The spouses Bate and Julie Nabus were the owners of parcels of land with a
positive suspensive condition and failure of which is not a breach but an total area of 1,665 square meters, situated in Pico, La Trinidad, Benguet, duly
event that prevents the obligation of the vendor to convey title from registered in their names under TCT No. T-9697 of the Register of Deeds of
becoming effective. the Province of Benguet. The property was mortgaged by the Spouses Nabus
to the Philippine National Bank (PNB), La Trinidad Branch, to secure a loan in
H. Contract to sell vs. Conditional sale the amount of P30,000.00.
As vendees given possession of the subject property, the ownership of which The requisite that a thing be determinate is satisfied if at the time the
was still with the vendors, the Pacsons should have protected their interest contract is entered into, the thing is capable of being made determinate
Art. 1463. The sole owner of a thing may sell an undivided interest therein. Art. 1459. The thing must be licit and the vendor must have a right to
(n) transfer the ownership thereof at the time it is delivered. (n)
Art. 1464. In the case of fungible goods, there may be a sale of an undivided Object must be licit
share of a specific mass, though the seller purports to sell and the buyer to Vendor must have the right to transfer ownership at the time the
buy a definite number, weight or measure of the goods in the mass, and object is delivered
though the number, weight or measure of the goods in the mass is
undetermined. By such a sale the buyer becomes owner in common of such Unlawful object:
a share of the mass as the number, weight or measure bought bears to the i. Future inheritance
number, weight or measure of the mass. If the mass contains less than the ii. Homestead (sale within 5 year prohibitory period)
number, weight or measure bought, the buyer becomes the owner of the
whole mass and the seller is bound to make good the deficiency from goods
of the same kind and quality, unless a contrary intent appears. (n) Manalapat v. CA
National Grains Authority v. IAC Sale a consensual contract; Acceptance is on the offer and not the
goods delivered. Sale is a consensual contract, there is perfection when
Facts: Leon Soriano submitted the documents required by the NFA for pre- there is consent upon the subject matter and price, even if neither is
qualifying as a seller. These were processed and he was given a quota of delivered. (Obana vs. C.A., L-36249, March 29, 1985, 135 SCRA 557, 560).
2,640 cavans of palay. On August 1979, Soriano delivered 630 cavans of
Facts: Consequently, said contract made in 1962 is not valid and cannot be the
source of any right nor the creator of any obligation between the parties.
Hence, the affidavit of conformity dated February 28, 1980, insofar as it
On October 20, 1962, Lazaro Taedo executed a notarized deed of absolute sought to validate or ratify the 1962 sale, is also useless and, in the words of
sale in favor of his eldest brother, Ricardo Taedo, and the latters wife, the respondent Court, suffers from the same infirmity. Even private
Teresita Barera, private respondents herein, whereby he conveyed to the respondents in their memorandum concede this.
latter in consideration of P1,500.00, one hectare of whatever share I shall
have over Lot No. 191 of the cadastral survey of Gerona, Province of Tarlac
and covered by Title T-l3829 of the Register of Deeds of Tarlac, the said d. Transferability of Ownership
property being his future inheritance from his parents (Exh. 1). Upon the
death of his father Matias, Lazaro executed an Affidavit of Conformity Ownership
dated February 28, 1980 (Exh. 3) to re-affirm, respect. acknowledge and
validate the sale I made in 1962. On January 13, 1981, Lazaro executed 1. It need not exist at the perfection of the contract. Required at the
another notarized deed of sale in favor of private respondents covering his time of delivery
undivided ONE TWELVE (1/12) of a parcel of land known as Lot 191 x x (Exh. 2. Subsequent acquisition of title by a vendor w/out title validates the
4). He acknowledged therein his receipt of P 10,000.00 as consideration sale
therefor. In February 1981, Ricardo learned that Lazaro sold the same
property to his children, petitioners herein, through a deed of sale dated 3. Acquisition of title by the vendee may depend upon a contingency
December 29, 1980 (Exh. E). On June 7, 1982, private respondents recorded (right of redemption)
Cavite Development Bank v. Lim, 324 scra 346 That after the payment of the 10% option money, the Offer to
Purchase provides for the payment only of the balance of the purchase price,
Facts: Rodolfo Guansing obtained a fraudulent title by executing an Extra- implying that the "option money" forms part of the purchase price. This is
Judicial Settlement of the Estate With Waiver where he made it appear that precisely the result of paying earnest money under Art. 1482 of the Civil
he and Perfecto Guansing were the only surviving heirs entitled to the Code. It is clear then that the parties in this case actually entered into a
property, and that Perfecto had waived all his rights thereto. Consequently contract of sale, partially consummated as to the payment of the price.
he acquired title and used this to acquire a loan. CDB foreclosed the
mortgage and granted him the period of redemption, which he did not 2. Conveyance of privilege to purchase land before it is awarded to the
exercise. tenant or occupant.
It is not required that, at the perfection stage, the seller be the Hermosilla v. Remoquillo
owner of the thing sold or even that such subject matter of the sale exists at
that point in time. Thus, under Art. 1434 of the Civil Code, when a person Facts: Apolinario Hermosilla was occupying a lot in San Pedro Tunasan
sells or alienates a thing which, at that time, was not his, but later acquires Homesite, a land of the Republic. He divided the lot into 2. The 1st portion
title thereto, such title passes by operation of law to the buyer or grantee. was given to his son Salvador and the other(questioned lot) to his grandson
This is the same principle behind the sale of "future goods" under Art. 1462 Jaime Remoquillo through a Deed of Assignment. A law was passed
of the Civil Code. However, under Art. 1459, at the time of delivery or prohibiting the transfer of ownership of the said lot. Salvador and Jaime after
consummation stage of the sale, it is required that the seller be the owner of made a Kasunduan ng Paglipat Ng Karapatan sa Isang Lagay na Lupang Solar
the thing sold. Otherwise, he will not be able to comply with his obligation to (Kasunduan) whereby Jaime transferred ownership of the 65 square meters
transfer ownership to the buyer. It is the consummation stage where the (the questioned property) in favor of Salvador. NHA awarded Jaime title.
Art. 1471. If the price is simulated, the sale is void, but the act may be shown
to have been in reality a donation, or some other act or contract. (n)
WON: Petitioner, as seller, forged a perfect contract to sell over a real
Art. 1472. The price of securities, grain, liquids, and other things shall also be property to respondents, as buyer.
considered certain, when the price fixed is that which the thing sold would
have on a definite day, or in a particular exchange or market, or when an HELD: We agree with petitioners contention that, for a perfected contract
amount is fixed above or below the price on such day, or in such exchange or of sale or contract to sell to exist in law, there must be an agreement of the
market, provided said amount be certain. (1448) parties, not only on the price of the property sold, but also on the manner
the price is to be paid by the vendee.
Art. 1473. The fixing of the price can never be left to the discretion of one of
the contracting parties. However, if the price fixed by one of the parties is A definite agreement as to the price is an essential element of a binding
accepted by the other, the sale is perfected. (1449a) agreement to sell personal or real property because it seriously affects the
rights and obligations of the parties. Price is an essential element in the
Art. 1474. Where the price cannot be determined in accordance with the formation of a binding and enforceable contract of sale. The fixing of the
preceding articles, or in any other manner, the contract is inefficacious. price can never be left to the decision of one of the contracting parties. But a
However, if the thing or any part thereof has been delivered to and price fixed by one of the contracting parties, if accepted by the other, gives
appropriated by the buyer he must pay a reasonable price therefor. What is a rise to a perfected sale.57
reasonable price is a question of fact dependent on the circumstances of
each particular case. (n)
Doles v. Angeles, G. R. No. 149353, June 26, 2006 b. In money or its equivalent (1458)
FACTS: On April 1, 1997, Ma. Aura Tina Angeles (respondent) filed with the Torres vs CA
RTC a complaint for Specific Performance with Damages against Jocelyn B.
Doles (petitioner), docketed as Civil Case No. 97-82716. Respondent alleged Facts:
that petitioner was indebted to the former in the concept of a personal loan
amounting to P405,430.00 representing the principal amount and interest; Petitioners and respondent entered into a joint venture agreement for the
that on October 5, 1996, by virtue of a "Deed of Absolute Sale", petitioner, as development of a parcel land located at Lapu-Lapu City island of Mactan into
seller, ceded to respondent, as buyer, a parcel of land, as well as the a subdivision. Pursuant to the contract, petitioners executed a deed of sale
improvements thereon, with an area of 42 square meters, covered by covering the said parcel of land in favor of the respondent, who then had it
Transfer Certificate of Title No. 382532,4 and located at a subdivision project registered in his name. Thereafter, respondent mortgaged the property in
known as Camella Townhomes Sorrente in Bacoor, Cavite, in order to satisfy the bank, and according to the joint agreement, the money obtained
her personal loan with respondent; that this property was mortgaged to amounting to P40,000.00 was to be used for the development of the
subdivision. However, the project did not push through, and the land was
SC: The Joint Venture Agreement clearly states that the consideration for the Barreto v. Sta. Marina, G. R. No. L-8169, December 29, 1913
sale was the expectation of profits from the subdivision project. Its first
stipulation states that petitioners did not actually receive payment for the (***CAVEAT EMPTOR: PLS READ THE FULL TEXT. CASE DOCTRINE RELATED
parcel of land sold to respondent. Consideration, more properly TO SALES NOT CLEARLY ESTABLISHED IN THE CASE)
denominated as cause, can take different forms, such as the prestation or
promise of a thing or service by another. In this case, the cause of the FACTS: The La Insular cigar and cigarette factory is a joint account association
contract of sale consisted not in the stated peso value of the land, but in the with a nominal capital of P865,000, the plaintiffs share being P20,000, or
expectation of profits from the subdivision project, for which the land was 4/173 of the whole. On March 14, 1910, the plaintiffs attorneys wrote the
intended to be used. As explained by the trial court, "the land was in effect defendants local representative a letter offering to sell to the defendant
given to the partnership as [petitioner's] participation therein. . . . There was plaintiffs participation in the factory. The result of the correspondence
therefore a consideration for the sale, the [petitioners] acting in the between the parties and their representatives was that Exhibit G was duly
expectation that, should the venture come into fruition, they [would] get executed on May 3, 1910. In accordance with the terms of this exhibit a
sixty percent of the net profits." committee of appraisers was appointed to ascertain and fix the actual value
of La Insular. The committee rendered its report on November 14, 1910,
-expectations of profits from the subdivision projects is a valid form of fixing the net value at P4,428,194.44. Of this amount 4/173 part represented
consideration. the plaintiffss share on his P20,000 of the nominal capital. In Exhibit J which
was executed on November 22, 1910, the plaintiff acknowledged to have
-it is sufficient if it can be determined by the stipulations of the contract received from the defendant that amount.
made by the parties thereto/ by reference to an agreement incorporated in
the contract. 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
3. Certain or ascertainable (determinable) November 22, 1910. This demand was refused and thereupon this action
was instituted to recover said profits. Upon the evidence submitted at the
iii) By reference to a definite day, a particular exchange or market (1472) In December, 1901, the plaintiff, with others, organized a company,
to which the plaintiff sold all the tobacco bought by him from the defendant.
iv) By reference to invoices The purchaser, the new company, on examining these two lots, rejected
them because the tobacco was not of the quality indicated in the inventory.
McCulough v. Aenlle & Co.,G. R. No. 1300, February 3, 1904 Thereupon the plaintiff, claiming that the tobacco in these two lots was
worthless, brought this action against the defendant to recover what he
FACTS: For the purpose of carrying into effect the said contract of sale paid.
entered into with the other party hereto, said Francisco Gonzalez y de la
Fuente and Don Antonio la Puente y Arce, in the name and on behalf of the WON: There was a perfected contract of sale entered into by the parties on
mercantile partnership denominated R. Aenlle & Co., by virtue of the powers August 27,1901.
conferred upon them and in compliance with the instructions given them by
Don Matias Saenz de Vizmanos y Lecaros, the manager of the said HELD: The document of August 27 was a completed contract of sale. The
partnership, solemnly declare that they sell, absolutely and in fee simple, to articles which were the subject of the sale were definitely and finally agreed
E. C. McCullough, the tobacco and cigarette factory known as "La Maria upon. The appellee agreed to buy, among other things, all of the leaf tobacco
Cristina," located at No. 36 Calle Echague, Plaza de Goiti, Santa Cruz district, in the factory. This was sufficient description of the thing sold. The price for
this city, said sale including the trade-mark "La Maria Cristina," which was each article was fixed. It is true that the price of this tobacco, for example,
been duly registered, the stock of tobacco in leaf and manufacture, was not stated in dollars and cents in the contract. But by its terms the
machinery, labels, wrappers, furniture, fixtures, and everything else appellee agreed to pay therefor the amount named in the invoices then in
2. properties are more than 3x more valuable than the measly purchase 2. Petitioners are not parties in interest since theyre not parties to the deeds
price (purchase price was grossly inadequate) of sale nor are they creditors of their parents.
3. deeds of sale do not reflect & express the true intent of the parties Issues :
4. deliberate conspiracy designed to unjustly deprive the rest of the 1.WON petitioners have a legal interest over the properties subject of the
compulsory heirs of their legitime. Deeds of Sale. NO.
Defense of the respondents: The complaint betrays their motive for filing the case. They are interested in
obtaining the properties by hereditary succession but they have failed to
1. no cause of action, requisite standing & interest show any legal right to these properties.
2. sales were w/sufficient considerations & made by their parents voluntarily Real party-in-interest is one who is either benefited or injured by the
in good faith & w/full knowledge of the consequences judgment of the party entitled to the avails of the suit. This includes parties
to the agreement or are bound either principally/subsidiarily. Parties must
A contract of sale is not a real contract but a consensual contract. Its binding Vales vs. Villa: Courts cannot be guardians of people who are not legally
& valid upon the meeting of the minds as to the price regardless of the incompetent. Courts operate not because a person has been
manner of payment or breach of such. Its still valid even if the real price is defeated/overcome by another, but because he has been defeated or
not stated in the contract, making it subject to reformation. But if the price is overcome ILEGALLY. There should be a violation of the law, commission of
simulated, there is no meeting of the minds, thus the contract is void (CC Art. what the law knows as an actionable wrong, before the courts are
1471). authorized to lay hold of the situation & remedy it.
Act of payment of the price does not determine the validity of a contract of Note: Failure of consideration is different from the lack of consideration,
sale. Failure to pay the consideration is different from lack of consideration. the former results in a right to demand the fulfillment/ cancellation of the
The former results in a rt to demand fulfillment or cancellation of the obligation under the existing valid contract. This is different from lack of
contract while the latter prevents the existence of a valid contract. consideration w/c prevents the existence of a valid contract.
Petitioners failed to show that the prices in the deeds of sale were simulated. B. Effect of earnest money (1482)
They dont even know the financial capacity of their siblings to buy these
lots. Respondents minds met as to the purchase price w/c was stated in the Art. 1482. Whenever earnest money is given in a contract of sale, it shall be
deeds of sale & the buyer siblings have paid the price to their parents. considered as part of the price and as proof of the perfection of the contract
3. WON the Deeds of Sale are void for gross inadequacy of the price. NO. a. It is considered part of the price, unless the contract is otherwise
b. It is proof of perfection of the contract
CC Art. 1355: Except in cases specified by law, lesion/ INADEQUACY OF
CAUSE shall not invalidate a contract, unless there has been fraud, mistake or Earnest money- it is something of value that the buyer was really in earnest
undue influence. and given after the perfection of the contract.
-part of the purchase price.
Note: absence of proof of the concurrence of all the essential elements of a I. RULES IN ORDINARY SALES
contract of sale, the giving of earnest money cannot establish the existence
of a perfected contract of sale. A. Form
Serrano v Caguiat G.R. No. 139173 Art. 1483. Subject to the provisions of the Statute of Frauds and of any other
applicable statute, a contract of sale may be made in writing, or by word of
Facts: Caguiat offered to buy the lot owned by spouses Serrano. Respondent mouth, or partly in writing and partly by word of mouth, or may be inferred
gave P100K as partial payment, in turn, petitioners gave a receipt with a from the conduct of the parties. (n)
statement that respondent promised to pay the balance of the purchase
price. Respondents were leaving for abroad and sought to cancel the -written agreement is not essential
transaction. Petitioners contend that there is no perfected contract as there
was no clear agreement between the parties as to the amount of -sale is consensual contract
consideration.
SC: In holding that there is a perfected contract of sale, both courts mainly 1. Verbal agreement of sale
relied on the earnest money given by respondent to petitioners (Art. 1482).
We are not convinced. Caoili v. CA
One who alleges any defect, or the lack of consent to a contract by Goods and chattels at a price of not less than P 500.
reason of fraud or undue influence, must establish by full, clear and
convincing evidence, such specific acts that vitiated the partys consent. 2) Sale of land through an Agent (1874) authority shall be in writing.
Petitioners adduced no proof that Roque had lost control of his mental
faculties at the time of the sale. Undue influence is not to be inferred from B. Perfection of a contract of sale (Art. 1475)
age, sickness, or debility of body, if sufficient intelligence remains.
- At the moment there is a meeting of the minds (consensual)
The Deed of Sale which states receipt of which in full I hereby
acknowledge to my entire satisfaction is an acknowledgment receipt in - The parties may reciprocally demand performance, subject to the
itself. Moreover, the presumption that a contract has sufficient consideration provisions of law governing the form of contracts
cannot be overthrown by a mere assertion that it has no consideration.
Requirements for perfection:
Heirs are bound by contracts entered into by their predecessors-in-
interest. Having been sold already to Belardo, the two properties no longer a.When parties are face to face when an offer is accepted without
formed part of Roques estate which petitioners could have inherited. conditions nor qualifications
b) Statute of Frauds applied b.Thru correspondence or telegram when the offeror has knowledge of
the acceptance
Statute of Frauds applies only in cases for
FACTS: MMC ordered and received various electrical materials from Miguel
Tan, and upon failure to pay the full amount despite several demands, Tan
Romulo Coronel, et al vs. CA and Alcaraz G.R. No. 103577, October 7, 1996 filed a collection suit. MMC contended that the absence of stamp marks on
the original invoices and purchase orders negated the receipt of said
FACTS: The Coronels sold their inherited house and lot to Ramona Patricia documents by MMCs representatives, a requisite for payment. Having not
Alcaraz, with the conditions that they will effect the transfer of the title received them thereby having no consent, their contract could not have
from their deceased father to their names upon receipt of the down been perfected.
payment, and after the transfer they will execute a Deed of Sale in favor of
Alcaraz. The conditions were embodied in a document labeled Receipt of HELD: The purchase orders constituted accepted offers when Tan supplied
Down Payment. Alcaraz paid, and the title was transferred in the Coronels the electrical materials to MMC. Hence, petitioner cannot evade its
name. However, the Coronels sold the property to Catalina Mabanag, obligation to pay by claiming lack of consent to the perfected contracts of
rescinded the contract with Alcaraz, and eventually executed a Deed of Sale sale. The invoices furnished the details of the transactions.
in favor of Mabanag. In the complaint for specific performance filed against
them, the Coronels contended that theirs was merely an executory contract Note: the purchase orders constituted accepted offers when Tan supplied
to sell, hence there was no perfected contract of sale. electrical materials to MMC.
HELD: The parties had agreed to a conditional contract of sale, 1) The buyer has the right to a reasonable opportunity for examination
consummation of which is subject only to the successful transfer of the before acceptance (1584) except when a carrier delivers C.O.D.
certificate of title from the name of the petitioners father to their names.
2)Sale by description and/or sample (1481): The bulk of the goods must
Since the condition contemplated by the parties which is the issuance of a correspond to either or both.
certificate of title in petitioners names was fulfilled on February 6, 1985,
the respective obligations of the parties under the contract of sale became b. Place of Perfection
mutually demandable.
1) where there was meeting of the minds
Note: even if document was denominated Receipt of down payment
from that moment on, there was a perfected contract of sale albeit 2) in case of acceptance through letter or telegram, in the place where the
conditional (i.e. transfer of title to heirs and payment of balance of purchase offer was made.
price)
a. Of Execution and Registration of the sale (1487) are borne by the Seller e. Limitations of the auctioneer (if he is not the seller);
b.Of putting the goods in a deliverable state (1521, last par.) are also borne 1. The auctioneer cannot bid
by the Seller.
2. He cannot employ or induce to bid on behalf of the seller
II Rules on Special Sales
3. He cannot knowingly take any bid from the seller or any
A. Sales at Auction person employed by him.
a. Rules Cases:
a. Sales of separate lots are separate contracts of sale The sale by auction is perfected when the auctioneer announces its
perfection by the fall of the hammer or in other customary manner (Case:
b. When perfected when the auctioneer announces its Dizon vs. Dizon Considering that the auction sale has been perfected, a
perfection by the fall of the hammer, or in other customary manner supplemental sale with higher consideration at the instance of only one
party(herein petitioner) could no longer be validly executed)
c. Before the fall of the hammer
- Before the hammer falls:
The bidder may retract his bid
o The bidder may retract his bid. The reason behind this is that every bidder
The auctioneer may withdraw the goods from the sale is merely an offer and therefore, before it is accepted, it may be withdrawn
EXCEPTION: If the auction has been announced to be without o The auctioneer may also withdraw the goods from the sale EXCEPT if the
reserve auction has been announced to be WITHOUT RESERVE.
d. Limitations of the seller: 2) Auction Sale where the seller reserved the right to reject any and all the
bids
1. The seller himself cannot bid
Case: Leoquinco vs. Postal Savings Bank
2. He cannot employ or induce any person to bid on his behalf
- Because of the expressed stipulation that PSB reserved to themselves the
right to reject any and all bids, the bid of petitioner may be rejected.
o The seller himself cannot bid Note: it is the seller who will set the terms and condition of the sale. If the
seller will bid in the auction without reserving such right and informing the
o He cannot employ or induce any person to bid on his behalf (people who public, the sales will be considered as fraudulent.
bid for the seller, but are not themselves bound, are called by-bidders or
puffers) Q: Will such fraud affect the perfection of the contract?
o EXCEPTION: if right to bid has been expressly reserved and that notice of A: Yes, the contract will be VOID with NO force and effect
such was given
B. Sales by sample and/ or description (1481)
- Limitations of the auctioneer (if he is not the seller)
Sales by Sample and/or Description (1481)
o The auctioneer cannot bid
a. The bulk of the goods must correspond to either or both
o He cannot employ or induce to bid on behalf of the seller
b. The buyer must have an opportunity to compare
o He cannot knowingly take any bid from the seller or any person employed
by him c. Effect: the contract may be rescinded at the option of the buyer
In an execution sale: PACIFIC COMMERCIAL COMPAN vs. ERMITA MARKET & COLD STORES, INC.
Judgment Creditor will have a writ to garnish or attach the property of the Plaintiff contracted to sell to defendant an automatic refrigerating machine
debtor and sheriff sells it in a public sale as per description stated in the sales contract. The machine was delivered
and by mutual agreement the vendor installed the machine. The machine
Judgment debtor has the right to redeem the property within 1 year did not give the results expected from it, and the defendant refused to pay
the balance of its purchase price and the cost of the installation of the
Note: The owner of the property offered for sale at auction has the right to machine. Thereupon plaintiff brought this action.
prescribed the manner, condition and terms of sale and where these are
reasonable and are made known to the buyer, they are binding upon them. Held: The fact that the defendant could not use the machine satisfactorily in
the three cold stores divisions cannot be attributed to plaintiff's fault; the
Sale of Personalty payable by Installments (Recto Law) In order to apply the provisions of article 1454-A of the Civil Code it must
appear that there was a contract for the sale of personal property payable in
a. Alternative remedies in case of non-payment (1484) installments and that there has been a failure to pay two or more
installments.
1) To exact fulfillment of the obligation
2) Sale of car on straight term
2) Cancel the sale should the vendee fail to pay two or more
installments LEVY HERMANOS V GERVACIO
i) This is an exception to 1191 In Macondray & Co. vs. De Santos (33 OG 2170), it was held that in order to
apply the provisions of article 1454-A of the Civil Code it must appear that
3) Foreclose the chattel mortgage (if one was constituted) there was a contract for the sale of personal property payable in installments
should the vendee fail to pay two or more installments. But and that there has been a failure to pay two or more installments. The
there may be no further action to recover the unpaid contract, in the present case, while a sale of personal property, is not,
balance. A contrary stipulation is void. however, one on installments, but on straight term, in which the balance,
after payment of the initial sum, should be paid in its totality at the time
Cases: specified in the promissory note.
1) Promissory note with chattel mortgage The transaction is not, therefore, the one contemplated in Act 4122 and
accordingly the mortgagee is not bound by the prohibition therein contained
MACONDRAY V DE SANTOS as to its right to the recovery of the unpaid balance.
Granting that there was a contract between the parties for the sale of Theoretically, there is no difference between paying the price in two
personal property payable in installments, which does not clearly appear in installments and paying the same partly in cash and partly in one installment,
the record before this court, the complaint does not allege nor does it in so far as the size of each partial payment is concerned; but in actual
appear in the record that there was a failure to pay twoor more installments. practice the difference exists, for, according to the regular course of business,
On the contrary the promissory note, copied in the complaint, was executed in contracts providing for payment of the price in two installments, there is
January 11, 1934, and, according to the complaint, on or about January 21, generally a provision for initial payment.
1934,the automobile, while in the possession of the defendant, was wrecked
and by reason of the failure of the defendant to replace said automobile or
1. The buyer has the right to sell/assign his right to another person 1)Rights of buyer:
(must be done by notarial act)
2. The buyer has the right to reinstate the contract by upgrading the ii) Default in payment
account during the grace period and before actual cancellation of
the contract. aa) To pay without additional interest, the unpaid installments (cash
surrender value) within the grace period
Right to advance payment w/out interest
bb) Grace period is one month for every year of installment payments made
"(a) To pay, without additional interest, the unpaid installments due
within the total grace period earned by him, which is hereby fixed at Limitation: The right can be exercised only once every 5 years
the rate of one month grace period for every one year of installment
payments made; x x x ii) Cancellation of sale
1. The buyer has the right to pay in advance any installment/ the full aa) Up to 5 years installments, refund of 50% of payments
balance of the purchase price anytime w/out interest and to have
such full payment annotated in the certificate of title.
*In both cases after full payment of cash surrender value Petitioner claimed that respondent paid only P12,950. She allegedly stopped
paying after December 1979 due to personal problems with the petitioner.
c. When the buyer has paid less than two years installments Petitioner asserted that when respondent ceased paying her installments,
her status of buyer was automatically transformed to that of a lessee.
1) The buyer has at least 60 days grace period within which to pay the Therefore, she continued to possess the property by mere tolerance of
installment due Patricio.
2) After the grace period, contract may be cancelled as in B above Issue: Whether the respondent has the right to occupy the premises?
(If the buyer fails to pay the installments due at the expiration of the grace SC: Yes, According to Republic Act No. 6552 -- "The Realty Installment Buyer
period, the seller may cancel the contract after thirty days from receipt by Protection Act," or more popularly known as the Maceda Law
the buyer of the notice of cancellation or the demand for rescission of the
contract by a notarial act.) (b) If the contract is cancelled, the seller shall refund to the buyer the cash
surrender value of the payments on the property equivalent to fifty percent
Pagtalunan vs. De Manzano of the total payments made and, after five years of installments, an
additional five percent every year but not to exceed ninety percent of the
(Patricio), petitioners stepfather and predecessor-in-interest, entered into a total payments made: Provided, That the actual cancellation of the contract
Contract to Sell with respondent, wife of Patricios former mechanic, Teodoro shall take place after thirty days from receipt by the buyer of the notice of
Manzano, whereby the former agreed to sell, and the latter to buy, a house cancellation or the demand for rescission of the contract by a notarial act
and lot which formed half of a parcel of land. The consideration of P17,800 and upon full payment of the cash surrender value to the buyer.9
was agreed to be paid in the following manner: P1,500 as downpayment
upon execution of the Contract to Sell, and the balance to be paid in equal
c. Rules when the buyer has paid less than 2 years of installments ( Refer to . . . Not only is an action for reconveyance conceptually different from an
case below) action for rescission but that, also, the effects that flow from an affirmative
judgment in either case would be materially dissimilar in various respects.
1) where the buyer paid less than 2 years installments The judicial resolution of a contract gives rise to mutual restitution which is
not necessarily the situation that can arise in an action for reconveyance.
Ramos vs Heruela Additionally, in an action for rescission (also often termed as resolution),
unlike in an action for reconveyance predicated on an extrajudicial rescission
Down payments, deposits or options on the contract shall be included in the (rescission by notarial act), the Court, instead of decreeing rescission, may
computation of the total number of installments made. authorize for a just cause the fixing of a period. 23
In the present case, there being no valid rescission of the contract to sell, the
Sec. 4.In case where less than two years of installments were paid, the seller action for reconveyance is premature. Hence, the spouses Heruela have not
shall give the buyer a grace period of not less than sixty days from the date lost the statutory grace period within which to pay. The trial court should
the installment became due. If the buyer fails to pay the installments due at have fixed the grace period to sixty days conformably with Section 4 of RA
the expiration of the grace period, the seller may cancel the contract after 6552.
thirty days from receipt by the buyer of the notice of cancellation or the
demand for rescission of the contract by a notarial act. 2) Sale of subdivision lot on installments where the buyer defaulted.
Issue: Whether or not the petitioner can be compelled to refund to the Sec. 4, 5, 7,18,23 ,24 ,25
respondent the value of the lot or to deliver a substitute lot at respondents
option? Section 4. Registration of Projects The registered owner of a parcel of land
who wishes to convert the same into a subdivision project shall submit his
SC: Yes, According to Republic Act No. 6552 -- "The Realty Installment Buyer subdivision plan to the Authority which shall act upon and approve the
Protection Act," or more popularly known as the Maceda Law same, upon a finding that the plan complies with the Subdivision Standards'
and Regulations enforceable at the time the plan is submitted. The same
More specifically, Section 3 of R.A. No. 6552 provided for the rights of the procedure shall be followed in the case of a plan for a condominium project
buyer in case of default in the payment of succeeding installments, where he except that, in addition, said Authority shall act upon and approve the plan
has already paid at least two (2) years of installments, thus: with respect to the building or buildings included in the condominium
project in accordance with the National Building Code (R.A. No. 6541).
"(a) To pay, without additional interest, the unpaid installments due within
the total grace period earned by him, which is hereby fixed at the rate of one The subdivision plan, as so approved, shall then be submitted to the Director
month grace period for every one year of installment payments made; x x x of Lands for approval in accordance with the procedure prescribed in Section
44 of the Land Registration Act (Act No. 496, as amended by R.A. No. 440):
(b) If the contract is cancelled, the seller shall refund to the buyer the cash Provided, that it case of complex subdivision plans, court approval shall no
surrender value of the payments on the property equivalent to fifty per cent longer be required. The condominium plan as likewise so approved, shall be
of the total payments made; provided, that the actual cancellation of the submitted to the Register of Deeds of the province or city in which the
contract shall take place after thirty days from receipt by the buyer of the property lies and the same shall be acted upon subject to the conditions and
notice of cancellation or the demand for rescission of the contract by a in accordance with the procedure prescribed in Section 4 of the
notarial act and upon full payment of the cash surrender value to the buyer." Condominium Act (R.A. No. 4726).
(a) A copy of the subdivision plan or condominium plan as approved in The subdivision project of the condominium project shall be deemed
accordance with the first and second paragraphs of this section. registered upon completion of the above publication requirement. The fact
of such registration shall be evidenced by a registration certificate to be
(b) A copy of any circular, prospectus, brochure, advertisement, letter, or issued to the applicant-owner or dealer.
communication to be used for the public offering of the subdivision lots or
condominium units; Section 5. License to sell. Such owner or dealer to whom has been issued a
registration certificate shall not, however, be authorized to sell any
(c) In case of a business firm, a balance sheet showing the amount and subdivision lot or condominium unit in the registered project unless he shall
general character of its assets and liabilities and a copy of its articles of have first obtained a license to sell the project within two weeks from the
incorporation or articles of partnership or association, as the case may be, registration of such project.
Since TSE did not obtain prior approval from the NHA the mortgage is void as SC: 1.) Yes.According Section 23 of PD 957
regarding to the property to the respondent as he has no standing to
question the validity of the other property. requires only due notice to the owner or developer for stopping further
2.) Respondent has a higher right over the property. Petitioner cannot be payments by reason of the latters failure to develop the subdivision
considered as a buyer in good faith. He should have considered that it was a according to the approved plans and within the time limit.
town house that was already in progress. The conversion of status from
mortgagee to buyer will not lessen the importance of such knowledge.
Cantemperante vs CRS realty Petitioners assail the Court of Appeals' ruling that the lack of the requisite
license to sell on the part of respondent CRS Realty rendered the sales void;
Facts: hence, neither party could compel performance of each other's contractual
Herein petitioners were among those who filed before the HLURB a obligations.
complaint 6 for the delivery of certificates of title against respondents CRS
Realty Development Corporation (CRS Realty), Crisanta Salvador and Cesar The only requisite for a contract of sale or contract to sell to exist in law is
Casal. the meeting of minds upon the thing which is the object of the contract and
the price, including the manner the price is to be paid by the vendee. Under
Petitioners averred that they had bought on an installment basis subdivision Article 1458 of the New Civil Code, in a contract of sale, whether absolute or
lots from respondent CRS Realty and had paid in full the agreed purchase conditional, one of the contracting parties obliges himself to transfer the
prices; but notwithstanding the full payment and despite demands, ownership of and deliver a determinate thing, and the other to pay therefor
respondents failed and refused to deliver the corresponding certificates of a price certain in money or its equivalent.
title to petitioners. The complaint prayed that respondents be ordered to In the instant case, the failure by respondent CRS Realty to obtain a license
deliver the certificates of title corresponding to the lots petitioners had to sell the subdivision lots does not render the sales void on that ground
purchased and paid in full and to pay petitioners damages. alone especially that the parties have impliedly admitted that there was
As found by the Court of Appeals, in the case at bar, the requirements of Case:
Sections 4 and 5 of P.D. [No.] 957 do not go into the validity of the contract, 1) Effect of sale of land to ones own spouse
such that the absence thereof would automatically render the contract null
and void. It is rather more of an administrative convenience in order to allow Uy Siu Pin vs. Cantollas, G.R. No. 46850, June 20, 1940
a more effective regulation of the industry.
Facts: There was a contract entered into between Uy Siu Pin and Casimira
and Blas, which the latter agreed to deliver the mortgaged land and to enjoy
Chapter 2 the same with its improvements to the during the period of 15 years on
condition that Uy Siu Pin would pay El Hogar Filipino the unpaid balance of
Capacity to Buy or Sell the indebtedness of casimira and Blas, together with all other expenses
including realty taxes.
Arts. 1489 1492
When the mortgage debtors, Casimira and Blas, failed to redeem the land
I. Parties and their Consent within the statutory period, a final deed of sale was issued in favor of the
mortgagee, El Hogar Filipino. The latter sold the land to Uy Siu Pin and in
A. Capacity in general (1489) turn sold the land to his wife Chua Hue.
Art. 1489. All persons who are authorized in this Code to obligate Issues: Is the sale valid between Uy Siu Pin and Chua Hue?
themselves, may enter into a contract of sale, saving the modifications
contained in the following articles. Held: SC said No. The sale from Uy Siu Pin to his wife Chua Hue is null and
void not only because theformer had no right to dispose of the land in
Where necessaries are sold and delivered to a minor or other person contorversy but because the sale comes within the prohibition of Article
without capacity to act, he must pay a reasonable price therefor. Necessaries 1458 of the Civil Code.
are those referred to in article 290.
Note: The case did not extensively explicate the reason why the sale
Note: A person who has both juridical capacity and capacity to act is said to between spouses are prohibited. However, Art 1490 provides that the
have full civil capacity. It is understood that he is of legal age and suffers no husband and wife cannot sell property to each other, except: (1) when a
FACTS: Respondents claim that their parents (Goyanko and Epifania) b. By Spouse without consent of the other spouse - Void
acquired a 661 square meter property but they (the parents) were Chinese
citizens at the time, the property was registered in the name of their aunt, C. Persons in Trust Relations
Sulpicia Ventura. Sulpicia executed a deed of sale over the property in favor
of reespondents father Goyanko that in turn executed a deed of sale over 2. Sale to agent: Exception to prohibition against sale by principal in
the same property in favor of his common-law-wife-herein petitioner Maria favor of his agent.
B. Ching. It was only after Goyankos death that they discovered the transfer
of the said property to Ching. Respondents thus filed with the RTC of Cebu Pelayo vs. Perez, G.R. No. 141323, June 8, 2005
City a complaint for recovery of the property and the nullification of the
deed of sale. FACTS: David Pelayo, by a Deed of Absolute Sale, conveyed to Melki Perez
two parcels of agricultural land. Loreza, wife of David Pelayo,k and another
ISSUE: Whether or not the sale of the property by Goyanko to Ching is valid. one whose signature is illegible witnessed the execution of the deed. Loreza,
however, signed only the third page. Perez asked Loreza to sign on the first
HELD: and second pages of the deed but refused, hence, he instituted the instant
complaint for specific performance against the spouses. Petitioners, in
The conveyance of Goyanko in favor of his common-law-wife-herein adopting the trial courts narration of antecedent facts in their petition,
petitioner, was null and void. Article 1409 of the Civil Code states inter alia admitted that they authorized respondent to represent them in negotiations
that contracts whose cause, object, or purpose is contrary to law, morals, with the squatters occupying the disputed property and, in consideration
good customs, public order, or public policy are void and inexistent from the of respondents services, they executed the subject deed of sale. Defendant
very beginning. Article 1352 also provides that: Contracts without cause, or Pelayo claimed that the deed was without his wifes consent, hence, it is null
with unlawful cause, produce no effect whatsoever. The cause is unlawful if it and void.
HELD: Petitioner Lorenza, by affixing her signature to the Deed of Sale on the Philippine Trust Co. vs Roldan
space provided for witnesses, is deemed to have given her implied consent
to the contract of sale. Sale is a consensual contract that is perfected by Facts: Parcels located in Guiguinto, Bulacan, were part of the properties
mere consent, which may either be express or implied. A wifes consent to inherited by Mariano L. Bernardo from his father, Marcelo Bernardo,
the husbands disposition of conjugal property does not always have to be deceased. In view of his minority, guardianship proceedings were instituted,
explicit or set forth in any particular document, so long as it is shown by acts wherein Socorro Roldan was appointed his guardian. She was the surviving
of the wife that such consent or approval was indeed given. In the present spouse of Marcelo Bernardo, and the stepmother of said Mariano L.
case, although it appears on the face of the deed of sale that Lorenza signed Bernardo.
only as an instrumental witness, circumstances leading to the execution of On July 27, 1947, Socorro Roldan filed in said guardianship proceedings
said document point to the fact that Lorenza was fully aware of the sale of (Special Proceeding 2485, Manila), a motion asking for authority to sell as
their conjugal property and consented to the sale. guardian the 17 parcels for the sum of P14,700 to Dr. Fidel C. Ramos, the
purpose of the sale being allegedly to invest the money in a residential
Under Article 173, in relation to Article 166, both of the New Civil Code, house, which the minor desired to have on Tindalo Street, Manila. The
when the deed in question was executed, the lack of marital consent to the motion was granted.
disposition of conjugal property does not make the contract void ab initio
but merely voidable. It has been held that the contract is valid until the court Socorro Roldan, as guardian, executed the proper deed of sale in favor of her
annuls the same and only upon an action brought by the wife whose consent brother-in-law Dr. Fidel C. Ramos. Dr. Fidel C. Ramos executed in favor of
was not obtained. In the present case, despite respondents repeated Socorro Roldan, personally, a deed of conveyance covering the same
demands for Lorenza to affix her signature on all the pages of the deed of seventeen parcels, for the sum of P15,000.
sale, showing respondents insistence on enforcing said contract, Lorenza still
did not fle a case for annulment of the deed of sale. Thus, if the transaction The Philippine Trust Company replaced Socorro Roldan as guardian, on
was indeed entered into without Lorenzas consent, we find it quite puzzling August 10, 1948. And this litigation, started two months later, seeks to undo
why for more than three and a half years, Lorenza did nothing to seek the what the previous guardian had done. The step-mother in effect, sold to
nullification of the assailed contract. herself, the properties of her ward, contends the plaintiff, and the sale
With regards to petitioners asservation that the deed of sale is invalid under should be annulled because it violates Article 1459 of the Civil Code
Article 1491 (2) of the New Civil Code, we find such argument unmeritorious. prohibiting the guardian from purchasing "either in person or through the
Petitioners, by signing the Deed of Sale in favor of respondent, are also mediation of another" the property of her ward.
deemed to have given their consent to the sale of the subject property in
favor of respondent, thereby making the transaction an exception to the ISSUE:
general rule that agents are prohibited from purchasing the property of their Whether or not the sale was valid.
principals.
HELD:
ISSUE: Whether or not the subject property is still the object of litigation; If FACTS: The controversy involves Lot No. 2204 that had been originally in the
affirmative, whether or not the sale is void for being violative of the possession of Jose Alvarez, Eduardos grandfather, until his demise in 1916.
provisions of Article 1491 (5) of the Civil Code. It remained unregistered until October 8, 1976 when OCT No. P-153 was
issued in the name of Eduardo pursuant to a free patent issued in Eduardos
HELD: The sale to Atty. Suplico is null and void. name that was entered in the Registry of Deed. Before the subject lot was
titled, Eduardo sold 533 sq.m. of the land to Ricardo on December 19, 1954.
A thing is said to be in litigation only if there is some contest or litigation over The sale is evidence by a deed of sale entitled Kasulatan ng Bilihang
it in court, but also from the moment that it becomes subject to the judicial Tuluyan ng Lupang Walang Titulo which was signed by Eduardo himself as
action of the judge. In the present case, there is no proof to show that at the vendor and his wife Engracia Ancieto with a certain Santiago Enriquez
time the deed of Transfer of Rights and Interest was executed, the probate signing as witness. The Kasulatan was registered with the Register of Deeds.
court issued an order granting the Motion for Termination of Proceeding and On March 18, 1981, another Deed of Sale conveyed another portion of the
Discharge of the Executor and Bond. Since the judge has yet to act on the subject lot as right of way was executed by Eduardo in favor of Ricardo. The
above-mentioned motion, if follows that the subject property which is the deed was notarized. Leon Banaag, as attorney-in-fact of his father-in-law
subject matter of the deed of Transfer of Rights and Interest, is still the (Eduardo) mortgage with the Rural Bank for P100,000.00 with the subject
object of litigation. lot as collateral. Banaag deposited the owners duplicate certificate of OCT
No. P-153 with the bank. Ricardo and Eduardo died.
Having been established that the subject property was still the object of
litigation at the time the subject deed of Transfer of Rights and Interest was The Cruzes, upon learning their right to the subject lot immediately tried to
executed, the assignment of rights and interest over the subject property in confront petitioners mortgage and obtain the surrender of the OCT. Having
favor of respondent is null and void for being violative of the provisions of failed to physically obtain the title from petitioners, the Cruzes went to
Article 1491 of the Civil Code which expressly prohibits lawyers from RBSP which had custody of the owners duplicate certificate of the OCT.
acquiring property or rights which may be the object of any litigation in They were able to secure a clearance to borrow the title and was able to
which they may take party by virtue of their profession. have the Register of Deeds cancel the OCT and issue two separate titles in
the name of Ricardo andEduardo.
C. Incapacity to sell
a. Between husband and wife under the community regime, the sale is void
1) But strangers cannot assail the transfer
b. Between persons in trust relations, as regards
1) Those based on public trust
i) Public officers, employees, government experts (1491, par. 4), and
ii) Judges, Justices, Prosecutors, Clerks of Court, lawyers (1491, par. 5) -
such sales are void (1409, No. 7)
2) Those based on private trust -
i) Guardians (1491, par. 1)
ii) Agents (1491, par. 2)