1. What is the rule on sales by spouses with third parties?

General Rule: Under the law on sales, it would seem that a spouse may, without the consent of
the other spouse, enter into sales transactions in the regular or normal pursuit of their profession,
vocation or trade.
Sales by spouses with third parties shall be governed by either
a) Absolute community of property as provided under Article 75, Family Code of the Philippines.
Under this, all the properties which are owned by the spouses at the time of the celebration of
their marriage or acquired thereafter shall be owned in common by them. Because of this co-
ownership, both the consent of the spouses shall be obtained in the sale and other transactions
involving their co-owned properties.
b) Conjugal partnership of gains: properties acquired before marriage belongs exclusively to each,
and those acquired during marriage together with its fruits are considered conjugal property and
shall be equally owned by both.

2. May the husband and wife sell property to each other?

Void, inexistent.
Sales between spouses is prohibited under Art.1490 “the husband and wife cannot sell property
to each other, except: 1) when a separation of property was agreed upon in the marriage
settlements or 2) when there has been a judicial separation of property under article 191

3. What is the rationale/reason for the prohibition of sale between spouses?

- To prevent a spouse defrauding his creditors by transferring his properties to the other spouse
-to prevent the other taking undue influence over the other and
-to avoid indirect donations.

4. Does the prohibition of sale between spouses apply to common law spouses?
Yes, under the principle of substance over form. Common law spouses, even though they are not
legally married, are still considered as such. The prohibition applies to a couple living as husband
and wife without the benefit of marriage, otherwise, the condition of those who incurred guilt
would turn out to be better than those in legal union.

5. Who are the persons specifically prohibited from entering into contracts of sale under Art.1491 of
the new civil code?
Persons who, because of their position and relation with the persons under their charge or
property under their control, are prohibited from acquiring said property either directly/indirectly
and whether in private/public sale. They are:

 Guardians
 Agents
 Executors & administrators
 Public officers and employees
 Judicial officers, employees, and lawyers
 Any others specially disqualified by law

6. Subject matter
Refers to the determinate thing which is the object of the contract. It may be real/personal,
tangible/intangible, and present/future property.

7. What are the requisites of a valid subject matter?

 It must be licit
 It must be determinate/determinable
 It must not be impossible, must be within the commerce of men
8. Distinguish EMPTIO REI SPERATAE from EMPTIO SPEI
Things having a potential existence may be the object of the contract of sale; however, such
a sale is subject to the condition that the thing will come into existence. Therefore, a sale
emptio rei speratae is strictly a contract covering future things, and subject to a
suspensive condition that the subject matter will come into existence. If the subject matter does
not come into existence, the contract is deemed extinguished “as soon as the time expires or if it
has become indubitable that the event will not take place.

Emptio spei (sale of hope), on the other hand, is the sale of a mere hope (like buying a lottery
ticket.) The sale is effective even if the thing doesn't appear unless it's a vain hope. The object is a
present thing which is the hope or expectancy and the uncertainty is with regard to its existence.
No recovery of payment.
In case of doubt, emptio rei speratae is presumed.

9. What is a determinate thing?

A thing is determinate when it is particularly designated or physically segregated from all others
of the same class. A determinate thing is distinct because of its individuality.

10. What are the requisites of a determinate thing?

A thing is determinate if at the time the contract is entered into, the thing is capable of being
made determinate without the necessity of a new or further agreement between the parties.

11. What are future goods?

Goods to be manufactured, raised, acquired by seller after perfection of the contract or whose
acquisition by seller depends upon a contingency.

12. Can there be a sale of future goods?

Yes. Under Art 1462, the goods which form the subject of a contract of sale may be either
existing goods, owned or possessed by the seller, or goods to be manufactured, raised, or acquired
by the seller after the perfection of the contract of sale. There may be a contract of sale of goods,
whose acquisition depends upon a contingency which may or may not happen.

13. What is the validity of a contract the object of which is future goods?
A sale of future goods even though the contract is in the form of a present sale, is valid only as an
executory contract to be fulfilled by the acquisition and delivery of goods specified. Upon
acquisition of goods, either party acquires the right to demand the execution of the contract.

14. May future inheritance be sold?

No, because contracts pertaining to successional rights cannot be entered into except in cases
expressly authorized by law
Requisites for the exception:
1. The succession has not yet been opened
2. The object of the contract forms part of the inheritance
3. That the promissory has, with respect to the object, an expectancy of a right which is purely
hereditary in nature

15. Obligations of seller to transfer ownership

Principal obligations of seller are to
 Take care of the thing, pending delivery, with proper diligence
 Pay for the expenses for the execution and registration of the deed of sale, unless there is
stipulation to the contrary
 Deliver the thing
 Warrant against eviction and hidden defects
 Transfer ownership of the determinate thing sold – implied in every contract of sale. One who
sells something he does not yet own is bound by the sale when he acquires the thing later
16. Must the vendor be the owner at the time of delivery?
The vendor need not be the owner of the thing at the time of perfection of the contract; it is
sufficient that he has right to transfer ownership thereof at the time it is delivered. One who sells
something he does not yet own is bound by the sale when he acquires the thing later.

17. What is price?

Refers to cause or consideration in a contract of sale. Price is the cost at which something is
obtained in exchange for something else. It is the sum stipulated as the equivalent of the thing
sold, put to the debit of the vendee, and agreed to by him.

18. What is the effect if the price is simulated?

(1) If the price is simulated or false, such as when the vendor really intended to transfer the thing
gratuitously, then the sale is void but the contract shall be valid as a donation.
(2) If the contract is not shown to be a donation or any other act or contract transferring
ownership because the parties do not intend to be bound at all, the ownership of the thing is not
transferred. The contract is void and inexistent.

19. May the fixing of the price be left to the discretion of the parties?
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 accepted by the other, the sale is perfected.

20. May a contract of sale subsists despite the lack of price?

Contract of sale that lacks price, is void and non-existent as without cause or consideration. Of
course, if there is no stipulation or meeting of the minds regarding the purchase price, there is no
contract of sale. EXP: subject matter delivered, courts may fix a reasonable price

21. What are the requisites of a valid price?

1. It must be real
2. It must be in MONEY OR ITS EQUIVALENT
3. It must be certain or ascertainable

22. When is there gross inadequacy of price?

Price is considered to be inadequate when it is so low as to be “shocking to the court’s
conscience” that no man in his right mind would accept.

23. What is the effect of inadequacy of price in a contract of sale?

Gross inadequacy of price does not affect a contract of sale, except as it may indicate a defect in
the consent, or that the parties really intended a donation or some other act or contract.

24. When does inadequacy of price affect the validity of a contract of sale?
1. Where low price indicates a defect in the consent such as when fraud, mistake, or undue
influence is present. The contract may be annulled because the consent is vitiated.
2. When the parties really intended a donation or some other act or contact