Coronel v.

CA
Facts:
The case arose from a complaint for specific performance filed
by private respondent Alcaraz against petitioners to
consummate the sale of a parcel of land in Quezon City.
On January 19 19!" petitioners e#ecuted a $%eceipt of &o'n
(ayment) of ("**** in favor of plaintiff %amona Alcaraz
binding themselves to transfer the o'nership of the land in
their name from their deceased father after'hich the balance
of (119**** shall be paid in full by Alcaraz. On +ebruary ,
19!" the property 'as transferred to petitioners. On +ebruary
1! 19!" petitioners sold the property to -abanag. +or this
reason Concepcion %amona.s mother filed an action for
specific performance.
Issue:
/hether the contract bet'een petitioners and private
respondent 'as that of a conditional sale or a mere contract to
sell
Held:
0ale by its very nature is a consensual contract because it is
perfected by mere consent. The essential elements of a
contract of sale are the follo'ing1 a2 Consent or meeting of the
minds that is consent to transfer o'nership in e#change for
the price3 b2 &eterminate sub4ect matter3 and c2 (rice certain in
money or its e5uivalent.
6nder this definition a Contract to 0ell may not be considered
as a Contract of 0ale because the first essential element is
lac7ing. 8n a contract to sell the prospective seller e#plicity
reserves the transfer of title to the prospective buyer meaning
the prospective seller does not as yet agree or consent to
transfer o'nership of the property sub4ect of the contract to
sell until the happening of an event 'hich for present
purposes 'e shall ta7e as the full payment of the purchase
price. /hat the seller agrees or obliges himself to do is to fulfill
his promise to sell the sub4ect property 'hen the entire amount
of the purchase price is delivered to him. 8n other 'ords the full
payment of the purchase price parta7es of a suspensive
condition the non9fulfillment of 'hich prevents the obligation
to sell from arising and thus o'nership is retained by the
prospective seller 'ithout further remedies by the prospective
buyer. A contract to sell may thus be defined as a bilateral
contract 'hereby the prospective seller 'hile e#pressly
reserving the o'nership of the sub4ect property despite
delivery thereof to the prospective buyer binds himself to sell
the said property e#clusively to the prospective buyer upon
fulfillment of the condition agreed upon that is full payment of
the purchase price.
A contract to sell may not even be considered as a conditional
contract of sale 'here the seller may li7e'ise reserve title to
the property sub4ect of the sale until the fulfillment of a
suspensive condition 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 'hich
may or may not occur. 8f the suspensive condition is not
fulfilled the perfection of the contract of sale is completely
abated. :o'ever if the suspensive condition is fulfilled the
contract of sale is thereby perfected such that if there had
already been previous delivery of the property sub4ect of the
sale to the buyer o'nership thereto automatically transfers to
the buyer by operation of la' 'ithout any further act having to
be performed by the seller. 8n a contract to sell upon the
fulfillment of the suspensive condition 'hich is the full payment
of the purchase price o'nership 'ill not automatically transfer
to the buyer although the property may have been previously
delivered to him. The prospective seller still has to convey title
to the prospective buyer by entering into a contract of absolute
sale.
8t is essential to distinguish bet'een a contract to sell and a
conditional contract of sale specially in cases 'here the
sub4ect property is sold by the o'ner not to the party the seller
contracted 'ith but to a third person as in the case at bench.
8n a contract to sell there being no previous sale of the
property a third person buying such property despite the
fulfillment of the suspensive condition such as the full payment
of the purchase price for instance cannot be deemed a buyer
in bad faith and the prospective buyer cannot see7 the relief of
reconveyance of the property. There is no double sale in such
case. Title to the property 'ill transfer to the buyer after
registration because there is no defect in the o'ner9seller;s
title per se but the latter of course may be used for damages
by the intending buyer.
8n a conditional contract of sale ho'ever upon the fulfillment
of the suspensive condition the sale becomes absolute and
this 'ill definitely affect the seller;s title thereto. 8n fact if there
had been previous delivery of the sub4ect property the seller;s
o'nership or title to the property is automatically transferred to
the buyer such that the seller 'ill no longer have any title to
transfer to any third person. 0uch second buyer of the property
'ho may have had actual or constructive 7no'ledge of such
defect in the seller;s title or at least 'as charged 'ith the
obligation to discover such defect cannot be a registrant in
good faith. 0uch second buyer cannot defeat the first buyer;s
title. 8n case a title is issued to the second buyer the first buyer
may see7 reconveyance of the property sub4ect of the sale.
The agreement could not have been a contract to sell because
the sellers herein made no express reservation of ownership
or title to the subject parcel of land. +urthermore the
circumstance 'hich prevented the parties from entering into
an absolute contract of sale pertained to the sellers
themselves <the certificate of title 'as not in their names2 and
not the full payment of the purchase price. 6nder the
established facts and circumstances of the case the Court
may safely presume that had the certificate of title been in the
names of petitioners9sellers at that time there 'ould have
been no reason 'hy an absolute contract of sale could not
have been e#ecuted and consummated right there and then.
/hat is clearly established by the plain language of the
sub4ect document is that 'hen the said =%eceipt of &o'n
(ayment= 'as prepared and signed by petitioners %omeo A.
Coronel et al. the parties had agreed to a conditional contract
of sale consummation of 'hich is sub4ect only to the
successful transfer of the certificate of title from the name of
petitioners; father Constancio (. Coronel to their names.
The provision on double sale presumes title or o'nership to
pass to the first buyer the e#ceptions being1 <a2 'hen the
second buyer in good faith registers the sale ahead of the
first buyer and <b2 should there be no inscription by either of
the t'o buyers 'hen the second buyer in good faith ac5uires
possession of the property ahead of the first buyer. 6nless the
second buyer satisfies these re5uirements title or o'nership
'ill not transfer to him to the pre4udice of the first buyer. 8n a
case of double sale 'hat finds relevance and materiality is not
'hether or not the second buyer 'as a buyer in good faith but
'hether or not said second buyer registers such second sale
in good faith that is 'ithout 7no'ledge of any defect in the
title of the property sold. 8f a vendee in a double sale registers
that sale after he has ac5uired 7no'ledge that there 'as a
previous sale of the same property to a third party or that
another person claims said property in a pervious sale the
registration 'ill constitute a registration in bad faith and 'ill not
confer upon him any right.
ROMERO vs. CA
G.R. No. 107207 November 2! 1""#
Facts:
%omero a ci vi l engineer 'as engaged i n the business
of producti on manufacture and e#portati on of
perli te filter aids permalite insulation and processed perlite
ore. 8n 19!! he decided to put up a central 'arehouse in
-etro -anila. +lores and his 'ife offered a parcel of land
measuring 19"> s5uare meters. The lot 'as covered in a TCT
in the name of private respondent ?nri5ueta Chua vda. de
Ongsiong. (etitioner visited the property and e#cept for
the presence of s5uatters in the area he found the place
suitable for a central 'arehouse. +lores called on
petitioner 'ith a proposal that should he advance the amount
of ("****.** 'hich could be used in ta7ing up an
e4ectment case agai nst the s5uatters private
respondent 'oul d agree to sel l the property for onl y
(!**@s5uare meter. %omero agreed. Aater a =&eed of
Conditional 0ale= 'as e#ecuted bet'een +lores and
Ongsiong.(urchase price B (1",1,**.**3
&o'npayment B ("*C3 Dal ance B to be pai d E" days
after the removal of all the s5uatters3 upon full payment
Ongsiong shall e#ecute deed of absolute sale in favor of
%omero.Ongsiong sought to return the ("****.** she
received from petitioner since she said she could not =get rid
of the s5uatters= on the lot. 0he opted to rescind the sale in
vie' of her failure to get rid of the s5uatters. %egionalTrial
Court of -a7ati rendered deci si on holding that pri vate
respondent had no ri ght to resci nd the contract since it
'as she 'ho =violated her obligation to e4ect the s5uatters
from the sub4ect property= and that petitioner being the in4ured
party 'as the party 'ho could under Article 1191 of the Civil
Code rescind the agreement.
Issue:
8s there a perfected contract of saleF
Held:
G?0. A sale is at once perfected 'hen a person <the
sel ler2 obl igates himself for a pri ce certai n to deli ver
and to t r a n s f e r o 'n e r s h i p o f a s p e c i f i e d
t h i n g o r r i g h t t o a n o t h e r < t h e b u y e r 2 o v e r
'h i c h t h e l a t t e r a g r e e s . <D8AAT?%AA and
%?C8(%OCAA C:A%ACT?%80T8C O+ 0AA?2.
8n determining the real character of the contract the title given
to it by the parties is not as much significant as its substance.
+or e#ample a deed of sale although denominated as a deed
of conditional sale may be treated as absolute in nature if title
to the property sold is not reserved in the vendor or if the
vendor is not granted the right to unilaterally rescind the
contract predicated on the fulfillment or non9fulfillment as the
case may be of the prescribed condition. +rom the moment
the contract i s perfected the parti es are bound not
onl y to the fulfil lment of 'hat has been e#pressl y
stipul ated but al so to all the conse5uences 'hi ch
accordi ng to their nature may be i n 7eeping 'i th good
fai th usage and la'. 6nder the agreement pri vate
respondent is obl igated to evi ct the s5uatters on
the property. The e4ectment of the s5uatters is a condition the
operative act of 'hich sets into motion the period
of compl i ance by pet i t i oner of hi s o'n
obl i gat i on i .e t o p a y t h e b a l a n c e o f t h e
p u r c h a s e p r i c e . (r i v a t e respondent.s failure =to
remove the s5uatters from the property= 'ithin the stipulated
period gives petitioner the right to either refuse to proceed 'ith
the agreement or 'aive that condition in consonance 'ith
Article 1"E" of the Civil Code.
This option clearly belongs to petitioner and not to private
respondent. There 'as no potestative condition on the part of
Ongsiong but a =mi#ed= condition =dependent not on the
'ill of t he vendor al one but al so of t hi r d per sons
l i 7e t he s5uat t er s and gover nment agenci es and
per sonnel concerned.=
+ule v. CA
Facts:
Hregorio +ule a ban7er and a 4e'eller offered to sell his
parcel of land to &r. Cruz in e#change for (E**** and a
diamond earring o'ned by the latter. A deed of absolute sale
'as prepared by Atty. Delarmino and on the same day +ule
'ent to the ban7 'ith &ichoso and -endoza and &r. Cruz
arrived shortly thereafter. &r. Cruz got the earrings from her
safety deposit bo# and handed it to +ule 'ho 'hen as7ed if
those 'ere alright nodded and too7 the earrings. T'o hours
after +ule complained that the earrings 'ere fa7e. :e files a
complaint to declare the sale null and void on the ground of
fraud and deceit.
Issue:
/hether the sale should be nullified on the ground of fraud
Held:
A contract of sale is perfected at the moment there is a
meeting of the minds upon the thing 'hich is the ob4ect of the
contract and upon the price. Deing consensual a contract of
sale has the force of la' bet'een the contracting parties and
they are e#pected to abide in good faith by their respective
contractual commitments. 8t is evident from the facts of the
case that there 'as a meeting of the minds bet'een petitioner
and &r. Cruz. As such they are bound by the contract unless
there are reasons or circumstances that 'arrant its
nullification.
Contracts that are voidable or annullable even though there
may have been no damage to the contracting parties are1 <12
those 'here one of the parties is incapable of giving consent
to a contract3 and <>2 those 'here the consent is vitiated by
mista7e violence intimidation undue influence or fraud. The
records ho'ever are bare of any evidence manifesting that
private respondents employed such insidious 'ords or
machinations to entice petitioner into entering the contract of
barter. 8t 'as in fact petitioner 'ho resorted to machinations to
convince &r. Cruz to e#change her 4e'elry for the Tanay
property.
+urthermore petitioner 'as afforded the reasonable
opportunity re5uired in Article 1"!E of the Civil Code 'ithin
'hich to e#amine the 4e'elry as he in fact accepted them
'hen as7ed by &r. Cruz if he 'as satisfied 'ith the same. Dy
ta7ing the 4e'elry outside the ban7 petitioner e#ecuted an act
'hich 'as more consistent 'ith his e#ercise of o'nership over
it. This gains credence 'hen it is borne in mind that he himself
had earlier delivered the Tanay property to &r. Cruz by affi#ing
his signature to the contract of sale. That after t'o hours he
later claimed that the 4e'elry 'as not the one he intended in
e#change for his Tanay property could not sever the 4uridical
tie that no' bound him and &r. Cruz. The nature and value of
the thing he had ta7en preclude its return after that
supervening period 'ithin 'hich anything could have
happened not e#cluding the alteration of the 4e'elry or its
being s'itched 'ith an inferior 7ind.
O'nership over the parcel of land and the pair of emerald9cut
diamond earrings had been transferred to &r. Cruz and
petitioner respectively upon the actual and constructive
delivery thereof. 0aid contract of sale being absolute in nature
title passed to the vendee upon delivery of the thing sold since
there 'as no stipulation in the contract that title to the property
sold has been reserved in the seller until full payment of the
price or that the vendor has the right to unilaterally resolve the
contract the moment the buyer fails to pay 'ithin a fi#ed
period.
/hile it is true that the amount of (E****.** forming part of
the consideration 'as still payable to petitioner its
nonpayment by &r. Cruz is not a sufficient cause to invalidate
the contract or bar the transfer of o'nership and possession of
the things e#changed considering the fact that their contract is
silent as to 'hen it becomes due and demandable.
Ong v. CA
Facts:
(etitioner Jaime Ong on the one hand and respondent
spouses -iguel C. %obles and Ale4andra %obles on the other
hand e#ecuted an =Agreement of (urchase and 0ale=
respecting t'o parcels of land situated at Darrio (uri 0an
Antonio Quezon. On -ay 1" 19!I petitioner Ong too7
possession of the sub4ect parcels of land together 'ith the
piggery building ricemill residential house and other
improvements thereon.
+or failure of the vendee to pay the price as agreed upon a
complaint for rescission of contract and recovery of properties
'ith damages. Aater 'hile the case 'as still pending 'ith the
trial court petitioner introduced ma4or improvements on the
sub4ect properties. These prompted the respondent spouses to
as7 for a 'rit of preliminary in4unction. The trial court granted
the application and en4oined petitioner from introducing
improvements on the properties e#cept for repairs. ?ventually
the trial court ordered the rescission of the contract.
Issues:
<12 'hether the contract entered into by the parties may be
validly rescinded under Article 1191 of the Je' Civil Code
<>2 'hether the parties had novated their original contract as to
the time and manner of payment
Held:
Article 1191 of the Je' Civil Code refers to rescission
applicable to reciprocal obligations. %eciprocal obligations are
those 'hich arise from the same cause and in 'hich each
party is a debtor and a creditor of the other such that the
obligation of one is dependent upon the obligation of the other.
They are to be performed simultaneously such that the
performance of one is conditioned upon the simultaneous
fulfillment of the other.
A careful reading of the parties; =Agreement of (urchase and
0ale= sho's that it is in the nature of a contract to sell as
distinguished from a contract of sale. 8n a contract of sale the
title to the property passes to the vendee upon the delivery of
the thing sold3 'hile in a contract to sell o'nership is by
agreement reserved in the vendor and is not to pass to the
vendee until full payment of the purchase price. 8n a contract
to sell the payment of the purchase price is a positive
suspensive condition the failure of 'hich is not a breach
casual or serious but a situation that prevents the obligation of
the vendor to convey title from ac5uiring an obligatory force.
The non9fulfillment of the condition of full payment rendered
the contract to sell ineffective and 'ithout force and effect. 8t
must be stressed that the breach contemplated in Article 1191
of the Je' Civil Code is the obligor;s failure to comply 'ith an
obligation. +ailure to pay in this instance is not even a breach
but merely an event 'hich prevents the vendor;s obligation to
convey title from ac5uiring binding force. :ence the
agreement of the parties in the case at bench may be set
aside but not because of a breach on the part of petitioner for
failure to complete payment of the purchase price. %ather his
failure to do so brought about a situation 'hich prevented the
obligation of respondent spouses to convey title from ac5uiring
an obligatory force.
Jovation is never presumed it must be proven as a fact either
by e#press stipulation of the parties or by implication derived
from an irreconcilable incompatibility bet'een the old and the
ne' obligation. 8n order for novation to ta7e place the
concurrence of the follo'ing re5uisites is indispensable1 <12
there must be a previous valid obligation3 <>2 there must be an
agreement of the parties concerned to a ne' contract3 <I2
there must be the e#tinguishment of the old contract3 and <E2
there must be the validity of the ne' contract. The aforesaid
re5uisites are not found in the case at bench. The subse5uent
acts of the parties hardly demonstrate their intent to dissolve
the old obligation as a consideration for the emergence of the
ne' one.
Haite v. +onacier
Facts:
Haite 'as appointed by +onacier as attorney9in9fact to
contract any party for the e#ploration and development of
mining claims. Haite e#ecuted a deed of assignment in favor
of a single proprietorship o'ned by him. +or some reasons
+onacier revo7ed the agency 'hich 'as acceded to by Haite
sub4ect to certain conditions one of 'hich being the transfer of
ores e#tracted from the mineral claims for (K"*** of 'hich
(1**** has already been paid upon signing of the agreement
and the balance to be paid from the first letter of credit for the
first local sale of the iron ores. To secure payment +onacier
delivered a surety agreement 'ith Aarap -ines and some of
its stoc7holders and another one 'ith +ar ?astern 8nsurance.
/hen the second surety agreement e#pired 'ith no sale being
made on the ores Haite demanded the (,"*** balance.
&efendants contended that the payment 'as sub4ect to the
condition that the ores 'ill be sold.
Issue:
<12 /hether the sale is conditional or one 'ith a period
<>2 /hether there 'ere insufficient tons of ores
Held:
<12 The shipment or local sale of the iron ore is not a condition
precedent <or suspensive2 to the payment of the balance of
(,"***.** but 'as only a suspensive period or term. /hat
characterizes a conditional obligation is the fact that its
efficacy or obligatory force <as distinguished from its
demandability2 is subordinated to the happening of a future
and uncertain event3 so that if the suspensive condition does
not ta7e place the parties 'ould stand as if the conditional
obligation had never e#isted.
A contract of sale is normally commutative and onerous1 not
only does each one of the parties assume a correlative
obligation <the seller to deliver and transfer o'nership of the
thing sold and the buyer to pay the price2but each party
anticipates performance by the other from the very start. /hile
in a sale the obligation of one party can be la'fully
subordinated to an uncertain event so that the other
understands that he assumes the ris7 of receiving nothing for
'hat he gives <as in the case of a sale of hopes or
e#pectationsemptio spei2 it is not in the usual course of
business to do so3 hence the contingent character of the
obligation must clearly appear. Jothing is found in the record
to evidence that Haite desired or assumed to run the ris7 of
losing his right over the ore 'ithout getting paid for it or that
+onacier understood that Haite assumed any such ris7. This is
proved by the fact that Haite insisted on a bond a to guarantee
payment of the (,"***.** an not only upon a bond by
+onacier the Aarap -ines L 0melting Co. and the company;s
stoc7holders but also on one by a surety company3 and the
fact that appellants did put up such bonds indicates that they
admitted the definite e#istence of their obligation to pay the
balance of (,"***.**.
The appellant have forfeited the right court belo' that the
appellants have forfeited the right to compel Haite to 'ait for
the sale of the ore before receiving payment of the balance of
(,"***.** because of their failure to rene' the bond of the
+ar ?astern 0urety Company or else replace it 'ith an
e5uivalent guarantee. The e#piration of the bonding
company;s underta7ing on &ecember ! 19"" substantially
reduced the security of the vendor;s rights as creditor for the
unpaid (,"***.** a security that Haite considered essential
and upon 'hich he had insisted 'hen he e#ecuted the deed of
sale of the ore to +onacier.
<>2 The sale bet'een the parties is a sale of a specific mass or
iron ore because no provision 'as made in their contract for
the measuring or 'eighing of the ore sold in order to complete
or perfect the sale nor 'as the price of (K"***** agreed
upon by the parties based upon any such measurement.<see
Art. 1E!* second par. Je' Civil Code2. The sub4ect matter of
the sale is therefore a determinate ob4ect the mass and not
the actual number of units or tons contained therein so that all
that 'as re5uired of the seller Haite 'as to deliver in good
faith to his buyer all of the ore found in the mass
not'ithstanding that the 5uantity delivered is less than the
amount estimated by them.
Acap v. CA
Facts:
+eli#berto Oruma sold his inherited land to Cosme (ido 'hich
land is rented by petitioner Teodoro Acap. /hen Cosme died
intestate his heirs e#ecuted a $&eclaration of :eirship and
/aiver of %ights) in favor of private respondent ?dy delos
%eyes. %espondent informed petitioner of his claim over the
land and petitioner paid the rental to him in 19!>. :o'ever in
subse5uent years petitioner refused to pay the rental 'hich
prompted respondent to file a complaint for the recovery of
possession and damages. (etitioner averred that he continues
to recognize (ido as the o'ner of the land and that he 'ill pay
the accumulated rentals to (ido.s 'ido' upon her return from
abroad. The lo'er court ruled in favor of private respondent.
Issues:
<12 /hether the $&eclaration of :eirship and /aiver of %ights)
is a recognized mode of ac5uiring o'nership by private
respondent
<>2 /hether the said document can be considered a deed of
sale in favor of private respondent
Held:
An asserted right or claim to o'nership or a real right over a
thing arising from a 4uridical act ho'ever 4ustified is not per
se sufficient to give rise to o'nership over the res. That right or
title must be completed by fulfilling certain conditions imposed
by la'. :ence o'nership and real rights are ac5uired only
pursuant to a legal mode or process. /hile title is the 4uridical
4ustification mode is the actual process of ac5uisition or
transfer of o'nership over a thing in 5uestion.
8n a Contract of 0ale one of the contracting parties obligates
himself to transfer the o'nership of and to deliver a
determinate thing and the other party to pay a price certain in
money or its e5uivalent.6pon the other hand a declaration of
heirship and 'aiver of rights operates as a public instrument
'hen filed 'ith the %egistry of &eeds 'hereby the intestate
heirs ad4udicate and divide the estate left by the decedent
among themselves as they see fit. 8t is in effect an e#tra4udicial
settlement bet'een the heirs under %ule KE of the %ules of
Court. :ence there is a mar7ed difference bet'een a saleof
hereditary rights and a waiver of hereditary rights. The first
presumes the e#istence of a contract or deed of sale bet'een
the parties. The second is technically spea7ing a mode of
e#tinction of o'nership 'here there is an abdication or
intentional relin5uishment of a 7no'n right 'ith 7no'ledge of
its e#istence and intention to relin5uish it in favor of other
persons who are co-heirs in the succession. (rivate
respondent being then a stranger to the succession of Cosme
(ido cannot conclusively claim o'nership over the sub4ect lot
on the sole basis of the 'aiver document 'hich neither recites
the elements of either a sale or a donation or any other
derivative mode of ac5uiring o'nership.
A notice of adverse claim is nothing but a notice of a claim
adverse to the registered o'ner the validity of 'hich is yet to
be established in court at some future date and is no better
than a notice of lis pendens 'hich is a notice of a case already
pending in court. 8t is to be noted that 'hile the e#istence of
said adverse claim 'as duly proven there is no evidence
'hatsoever that a deed of sale 'as e#ecuted bet'een Cosme
(ido;s heirs and private respondent transferring the rights of
(ido;s heirs to the land in favor of private respondent. (rivate
respondent;s right or interest therefore in the tenanted lot
remains an adverse claim 'hich cannot by itself be sufficient
to cancel the OCT to the land and title the same in private
respondent;s name. Conse5uently 'hile the transaction
bet'een (ido;s heirs and private respondent may be binding
on both parties the right of petitioner as a registered tenant to
the land cannot be perfunctorily forfeited on a mere allegation
of private respondent;s o'nership 'ithout the corresponding
proof thereof.
Qui4ada v. CA
Facts:
On April " 19", Trinidad Qui4ada and her sisters e#ecuted a
deed of conditional donation in favor of the -unicipality of
Talacogon the condition being that the land shall be used
e#clusively for the construction of a provincial high school.
Trinidad remained in possession of the land. On July >9 19,>
Trinidad sold the land to respondent %egalado -onde4ar. 8n
19!* the heirs of Trinidad herein petitioners filed a complaint
for forcible entry against the respondent. 8n 19!K the
proposed campus did not materialize and the 0angguniang
Dayan enacted a resolution donating bac7 the land to the
donor. 8n the meantime respondent -onde4ar conveyed
portions of the land to the other respondents. On July " 19!!
petitioners filed a complaint for 5uieting of title recovery of
possession and o'nership of the land.
Issue:
/hether the sale bet'een Trinidad and %egalado is valid
considering the capacity of the vendor to e#ecute the contract
in vie' of the conditional deed of donation
Held:
The donor may have an inchoate interest in the donated
property during the time that o'nership of the land has not
reverted to her. 0uch inchoate interest may be the sub4ect of
contracts including a contract of sale. 8n this case ho'ever
'hat the donor sold 'as the land itself 'hich she no longer
o'ns. 8t 'ould have been different if the donor9seller sold her
interests over the property under the deed of donation 'hich is
sub4ect to the possibility of reversion of o'nership arising from
the non9fulfillment of the resolutory condition.
0ale being a consensual contract is perfected by mere
consent 'hich is manifested the moment there is a meeting of
the minds as to the offer and acceptance thereof on three <I2
elements1 sub4ect matter price and terms of payment of the
price. O'nership by the seller on the thing sold at the time of
the perfection of the contract of sale is not an element for its
perfection. /hat the la' re5uires is that the seller has the right
to transfer o'nership at the time the thing sold is delivered.
(erfection per se does not transfer o'nership 'hich occurs
upon the actual or constructive delivery of the thing sold. A
perfected contract of sale cannot be challenged on the ground
of non9o'nership on the part of the seller at the time of its
perfection3 hence the sale is still valid.
The consummation ho'ever of the perfected contract is
another matter. 8t occurs upon the constructive or actual
delivery of the sub4ect matter to the buyer 'hen the seller or
her successors9in9interest subse5uently ac5uires o'nership
thereof. 0uch circumstance happened in this case 'hen
petitioners 'ho are Trinidad Qui4ada;s heirs and successors9in9
interest became the o'ners of the sub4ect property upon the
reversion of the o'nership of the land to them. Conse5uently
o'nership is transferred to respondent -onde4ar and those
'ho claim their right from him. Article 1EIE of the Je' Civil
Code supports the ruling that the seller;s =title passes by
operation of la' to the buyer.= This rule applies not only 'hen
the sub4ect matter of the contract of sale is goods but also to
other 7inds of property including real property.
Celestino Co L Company v. C8%
Facts:
Celestino Co L Company is a general co9partnership
registered under the trade name $Oriental 0ash +actory). +rom
19E, to 19"1 it paid ta#es e5uivalent to KM on the gross
receipts under 0ec. 1!, of the J8%C 'hich is a ta# on the
original sales of articles by manufacturer producer or importer.
:o'ever in 19"> it began to claim only IM ta# under 0ec.
191 'hich is a ta# on sales of services. (etitioner claims that
it does not manufacture ready9made doors sash and 'indo's
for the public but only upon special orders from the
customers hence it is not engaged in manufacturing but only
in sales of services.
Issue:
/hether the petitioner company is engaged in manufacturing
or is merely a special service provider
Held:
Celestino Co L Company habitually makes sash 'indo's and
doors as it has represented in its stationery and
advertisements to the public. That it =manufactures= the same
is practically admitted by appellant itself. The fact that 'indo's
and doors are made by it only 'hen customers place their
orders does not alter the nature of the establishment for it is
obvious that it only accepted such orders as called for the
employment of such material9moulding frames panels9as it
ordinarily manufactured or 'as in a position habitually to
manufacture.
Any builder or homeo'ner 'ith sufficient money may order
'indo's or doors of the 7ind manufactured by this appellant.
Therefore it is not true that it serves special customers only or
confines its services to them alone. And anyone 'ho sees
and li7es the doors ordered by &on Toribio Teodoro L 0ons
8nc. may purchase from appellant doors of the same 7ind
provided he pays the price. 0urely the appellant 'ill not
refuse for it can easily duplicate or even mass9produce the
same doors9it is mechanically e5uipped to do so.
The Oriental 0ash +actory does nothing more than sell the
goods that it mass9produces or habitually ma7es3 sash
panels mouldings frames cutting them to such sizes and
combining them in such forms as its customers may desire.
/hen this +actory accepts a 4ob that re5uires the use of
e#traordinary or additional e5uipment or involves services not
generally performed by it9it thereby contracts for a piece of
work filing special orders 'ithin the meaning of Article 1E,K.
The orders herein e#hibited 'ere not sho'n to be special.
They 'ere merely orders for 'or7 nothing is sho'n to call
them special re5uiring e#traordinary service of the factory.
Any'ay supposing for the moment that the transactions 'ere
not sales they 'ere neither lease of services nor contract 4obs
by a contractor. Dut as the doors and 'indo's had been
admittedly =manufactured= by the Oriental 0ash +actory such
transactions could be and should be ta#ed as =transfers=
thereof under section 1!, of the Jational %evenue Code.
?ngineering ?5uipment and 0upply Company v. C8% and CTA
Facts:
?ngineering ?5uipment and 0upply Company is engaged in
the design and installation of central type air conditioning
system pumping plants and steel fabrications. 6pon a letter
from a certain Juan dela Cruz denouncing the company for ta#
evasion and fraud in obtaining its dollar allocations D8% CD
and JD8 conducted a raid and confiscated voluminous
documents from the firm. The Commissioner contends that
?ngineering is a manufacturer and seller of air conditioning
units and parts or accessories thereof and therefore it is
sub4ect to the I*M advance sales ta# prescribed by 0ection
1!"<m2 of the Ta# Code in relation to 0ection 19E of the same.
?ngineering claims that it is not a manufacturer and setter of
air9conditioning units and spare parts or accessories thereof
sub4ect to ta# under 0ection 1!"<m2 of the Ta# Code but a
contractor engaged in the design supply and installation of the
central type of air9conditioning system sub4ect to the IM ta#
imposed by 0ection 191 of the same Code 'hich is
essentially a ta# on the sale of services or labor of a contractor
rather than on the sale of articles sub4ect to the ta# referred to
in 0ections 1!E 1!" and 1!, of the Code.
Issue:
/hether or not ?ngineering is a manufacturer of air
conditioning units under 0ection 1!"<m2 supra in relation to
0ections 1!I<b2 and 19E of the Code or a contractor under
0ection 191 of the same Code
Held:
The distinction bet'een a contract of sale and one for 'or7
labor and materials is tested by the in5uiry 'hether the thing
transferred is one not in e#istence and 'hich never 'ould
have e#isted but for the order of the party desiring to ac5uire it
or a thing 'hich 'ould have e#isted and has been the sub4ect
of sale to some other persons even if the order had not been
given. 8f the article ordered by the purchaser is e#actly such as
the plaintiff ma7es and 7eeps on hand for sale to anyone and
no change or modification of it is made at defendant;s re5uest
it is a contract of sale even though it may be entirely made
after and in conse5uence of the defendants order for it.
The 'ord =contractor= has come to be used 'ith special
reference to a person 'ho in the pursuit of the independent
business underta7es to do a specific 4ob or piece of 'or7 for
other persons using his o'n means and methods 'ithout
submitting himself to control as to the petty details. The true
test of a contractor 'ould seem to be that he renders service
in the course of an independent occupation representing the
'ill of his employer only as to the result of his 'or7 and not as
to the means by 'hich it is accomplished.
?ngineering in a nutshell fabricates assembles supplies and
installs in the buildings of its various customers the central
type air conditioning system3 prepares the plans and
specifications therefor 'hich are distinct and different from
each other3 the air conditioning units and spare parts or
accessories thereof used by petitioner are not the 'indo' type
of air conditioner 'hich are manufactured assembled and
produced locally for sale to the general mar7et3 and the
imported air conditioning units and spare parts or accessories
thereof are supplied and installed by petitioner upon previous
orders of its customers conformably 'ith their needs and
re5uirements. The facts and circumstances afore5uoted
support the theory that ?ngineering is a contractor rather than
a manufacturer.
?ngineering and -achinery Corporation v. CA
Facts:
(ursuant to a contract petitioner undertoo7 to install air
conditioning system in private respondent.s building. The
building 'as later sold to the Jational 8nvestment and
&evelopment Corporation 'hich too7 possession of it. 6pon
J8&C.s failure to comply 'ith certain conditions the sale 'as
rescinded. J8&C reported to respondent that there 'ere
certain defects in the air conditioning system. %espondent filed
a complaint against petitioner for non9compliance 'ith the
agreed plans and specifications. (etitioner moved to dismiss
the complaint on the ground of the ,9month prescription of
'arranty against hidden defects. (rivate respondent averred
that the contract 'as not of sale but for a piece of 'or7 the
action for damages of 'hich prescribes after 1* years.
Issue:
8s a contract for the fabrication and installation of a central air9
conditioning system in a building one of =sale= or =for a piece
of 'or7=F
Held:
A contract for a piece of 'or7 labor and materials may be
distinguished from a contract of sale by the in5uiry as to
'hether the thing transferred is one not in e#istence and 'hich
'ould never have e#isted but for the order of the person
desiring it. 8n such case the contract is one for a piece of
'or7 not a sale. On the other hand if the thing sub4ect of the
contract 'ould have e#isted and been the sub4ect of a sale to
some other person even if the order had not been given then
the contract is one of sale. The distinction bet'een the t'o
contracts depends on the intention of the parties. Thus if the
parties intended that at some future date an ob4ect has to be
delivered 'ithout considering the 'or7 or labor of the party
bound to deliver the contract is one of sale. Dut if one of the
parties accepts the underta7ing on the basis of some plan
ta7ing into account the 'or7 he 'ill employ personally or
through another there is a contract for a piece of 'or7.
Clearly the contract in 5uestion is one for a piece of 'or7. 8t is
not petitioner;s line of business to manufacture air9conditioning
systems to be sold =off9the9shelf.= 8ts business and particular
field of e#pertise is the fabrication and installation of such
systems as ordered by customers and in accordance 'ith the
particular plans and specifications provided by the customers.
Jaturally the price or compensation for the system
manufactured and installed 'ill depend greatly on the
particular plans and specifications agreed upon 'ith the
customers. The remedy against violations of the 'arranty
against hidden defects is either to 'ithdra' from the contract
<redhibitory action2 or to demand a proportionate reduction of
the price <accion quanti manoris2 'ith damages in either case.
/hile it is true that Article 1"K1 of the Civil Code provides for a
prescriptive period of si# months for a redhibitory action a
cursory reading of the ten preceding articles to 'hich it refers
'ill reveal that said rule may be applied only in case of implied
'arranties3 and 'here there is an e#press 'arranty in the
contract as in the case at bench the prescriptive period is the
one specified in the e#press 'arranty and in the absence of
such period =the general rule on rescission of contract 'hich
is four years <Article 1I!9 Civil Code2 shall apply=. 8t 'ould
appear that this suit is barred by prescription because the
complaint 'as filed more than four years after the e#ecution of
the contract and the completion of the air9conditioning system.
:o'ever a close scrutiny of the complaint filed in the trial
court reveals that the original action is not really for
enforcement of the 'arranties against hidden defects but one
for breach of the contract itself. The governing la' is Article
1K1". :o'ever inasmuch as this provision does not contain a
specific prescriptive period the general la' on prescription
'hich is Article 11EE of the Civil Code 'ill apply. 0aid
provision states inter alia that actions =upon a 'ritten
contract= prescribe in ten <1*2 years. 0ince the governing
contract 'as e#ecuted on 0eptember 1* 19,> and the
complaint 'as filed on -ay ! 19K1 it is clear that the action
has not prescribed. The mere fact that the private respondent
accepted the 'or7 does not ipso facto relieve the petitioner
from liability for deviations from and violations of the 'ritten
contract as the la' gives him ten <1*2 years 'ithin 'hich to
file an action based on breach thereof.
Quiroga v. (arsons
Facts:
(laintiff engaged into a contract for the e#clusive sale of its
beds 'ith defendants. (laintiff filed a complaint against the
defendant for violation of the follo'ing obligations1 not to sell
the beds at higher prices than those of the invoices3 to have an
open establishment in 8loilo3 itself to conduct the agency3 to
7eep the beds on public e#hibition and to pay for the
advertisement e#penses for the same3 and to order the beds
by the dozen and in no other manner. (laintiff alleged that the
defendant 'as his agent.
Issue:
/hether the defendant by reason of the contract hereinbefore
transcribed 'as a purchaser or an agent of the plaintiff for the
sale of his beds
Held:
There 'as the obligation on the part of the plaintiff to supply
the beds and on the part of the defendant to pay their price.
These features e#clude the legal conception of an agency or
order to sell 'hereby the mandatory or agent received the
thing to sell it and does not pay its price but delivers to the
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. Dy virtue of the contract bet'een the plaintiff and the
defendant the latter on receiving the beds 'as necessarily
obliged to pay their price 'ithin the term fi#ed 'ithout any
other consideration and regardless as to 'hether he had or
had not sold the beds. The 'ords commission on salesused in
clause <A2 of article 1 mean nothing else as stated in the
contract itself than a mere discount on the invoice price. The
'ordagency also used in articles > and I only e#presses that
the defendant 'as the only one that could sell the plaintiff;s
beds in the Nisayan 8slands. /ith regard to the remaining
clauses the least that can be said is that they are not
incompatible 'ith the contract of purchase and sale.
(uyat and 0ons Co. v. Arco Amusement Company
Facts:
%espondent is engaged in operating cinematographs 'hile
petitioner is acting as an agent for 0tarr (iano Company of
%ichmond. %espondent negotiated 'ith petitioner and agreed
that petitioner 'ould order sound reproducing e5uipment on its
behalf and respondent 'ould pay 1*M commission and out9
of9poc7et e#penses in addition to the selling price.
Transactions for > orders transpired. After I years respondent
discovered that that price 5uoted to them by petitioner 'as not
the net price but the list price. They sought to obtain
reimbursement from the petitioner and failing on this filed the
instant case.
Issue:
/hether the contract bet'een petitioner and respondent is
that of agency 'here agent is bound to indemnify the principal
for damages or a mere contract of sales
Held:
The letters by 'hich the respondent accepted the prices for
the sound reproducing e5uipment sub4ect of its contract 'ith
the petitioner are clear in their terms and admit no other
interpretation that the respondent in 5uestion at the prices
indicated 'hich are fi#ed and determinate. The respondent
admitted in its complaint filed 'ith the Court of +irst 8nstance of
-anila that the petitioner agreed to sell to it the first sound
reproducing e5uipment and machinery.
/e agree 'ith the trial 4udge that ='hatever unforseen events
might have ta7en place unfavorable to the defendant
<petitioner2 such as change in prices mista7e in their
5uotation loss of the goods not covered by insurance or
failure of the 0tarr (iano Company to properly fill the orders as
per specifications the plaintiff <respondent2 might still legally
hold the defendant <petitioner2 to the prices fi#ed of O1K**
and O1,**.= This is incompatible 'ith the pretended relation
of agency bet'een the petitioner and the respondent because
in agency the agent is e#empted from all liability in the
discharge of his commission provided he acts in accordance
'ith the instructions received from his principal <section >"E
Code of Commerce2 and the principal must indemnify the
agent for all damages 'hich the latter may incur in carrying out
the agency 'ithout fault or imprudence on his part <article
1K>9 Civil Code2.
/hile the letters state that the petitioner 'as to receive ten per
cent <1*M2 commission this does not necessarily ma7e the
petitioner an agent of the respondent as this provision is only
an additional price 'hich the respondent bound itself to pay
and 'hich stipulation is not incompatible 'ith the contract of
purchase and sale.
8n the second place to hold the petitioner an agent of the
respondent in the purchase of e5uipment and machinery from
the 0tarr (iano Company of %ichmond 8ndiana is
incompatible 'ith the admitted fact that the petitioner is the
e#clusive agent of the same company in the (hilippines. 8t is
out of the ordinary for one to be the agent of both the vendor
and the purchaser. The facts and circumstances indicated do
not point to anything but plain ordinary transaction 'here the
respondent enters into a contract of purchase and sale 'ith
the petitioner the latter as e#clusive agent of the 0tarr (iano
Company in the 6nited 0tates.
8t follo's that the petitioner as vendor is not bound to
reimburse the respondent as vendee for any difference
bet'een the cost price and the sales price 'hich represents
the profit realized by the vendor out of the transaction. This is
the very essence of commerce 'ithout 'hich merchants or
middleman 'ould not e#ist.
Antonio -edina v. C8% and CTA
Facts:
0ubse5uent to marriage petitioners engaged in concessions
'ith the government 'hile his 'ife started to engage in
business as a lumber dealer. +rom 19E9 to 19"> petitioner
sold logs to his 'ife. On the thesis that the sales are null and
void C8% considered the sales by -rs. -edina as the
petitioner.s original sales ta#able under the J8%C. (etitioner
filed a petition for reconsideration revealing for the first time
the alleged premarital agreement of complete separation of
property.
Issue:
/hether or not the sales made by the petitioner to his 'ife
could be considered as his original ta#able sales
Held:
8t appears that at the time of the marriage bet'een petitioner
and his 'ife they neither had any property nor business of
their o'n as to have really urged them to enter into the
supposed property agreement. 0econdly the testimony that
the separation of property agreement 'as recorded in the
%egistry of (roperty three months before the marriage is
patently absurd since such a prenuptial agreement could not
be effective before marriage is celebrated and 'ould
automatically be cancelled if the union 'as called off. 8n the
third place despite their insistence on the e#istence of the
ante nuptial contract the couple strangely enough did not act
in accordance 'ith its alleged covenants. 8t 'as not until July
of 19"E that he alleged for the first time the e#istence of the
supposed property separation agreement. +inally the &ay
Doo7 of the %egister of &eeds on 'hich the agreement 'ould
have been entered had it really been registered as petitioner
insists and 'hich boo7 'as among those saved from the
ravages of the 'ar did not sho' that the document in 5uestion
'as among those recorded therein.
The 'ife is authorized to engage in business and for the
incidents that flo' therefrom 'hen she so engages therein.
Dut the transactions permitted are those entered into 'ith
strangers and do not constitute e#ceptions to the prohibitory
provisions of Article 1E9* against sales bet'een spouses.
Contracts violative of the provisions of Article 1E9* of the Civil
Code are null and void. Deing void transactions the sales
made by the petitioner to his 'ife 'ere correctly disregarded
by the Collector in his ta# assessments that considered as the
ta#able sales those made by the 'ife through the spouses;
common agent -ariano Osorio. 8n upholding that stand the
Court belo' committed no error.
Calimlim9Canullas v. +ortun
Facts:
(etitioner -ercedes Calimlim9Canullas and +ernando
Canullas 'ere married in 19,> 'ith " children and 'ere living
on a house situated on a land inherited by the latter. 8n 19K!
+ernando abandoned his family and lived 'ith Corazon
&aguines. 8n 19!* +ernando sold the house and lot to
&aguines 'ho initiated a complaint for 5uieting of title.
-ercedes resisted claiming that the house and lot 'ere
con4ugal properties and the sale 'as null nad void for she had
not consented thereto.
Issues:
<12 /hether or not the construction of a con4ugal house on the
e#clusive property of the husband ipso facto gave the land the
character of con4ugal property
<>2 /hether or not the sale of the lot together 'ith the house
and improvements thereon 'as valid under the circumstances
surrounding the transaction
Held:
<12 Doth the land and the building belong to the con4ugal
partnership but the con4ugal partnership is indebted to the
husband for the value of the land. The spouse o'ning the lot
becomes a creditor of the con4ugal partnership for the value of
the lot 'hich value 'ould be reimbursed at the li5uidation of
the con4ugal partnership. +?%JAJ&O could not have
alienated the house and lot to &AH68J?0 since -?%C?&?0
had not given her consent to said sale.
<>2 The contract of sale 'as null and void for being contrary to
morals and public policy. The sale 'as made by a husband in
favor of a concubine after he had abandoned his family and
left the con4ugal home 'here his 'ife and children lived and
from 'hence they derived their support. That sale 'as
subversive of the stability of the family a basic social
institution 'hich public policy cherishes and protects. The la'
emphatically prohibits the spouses from selling property to
each other sub4ect to certain e#ceptions. 0imilarly donations
bet'een spouses during marriage are prohibited. And this is
so because if transfers or con conveyances bet'een spouses
'ere allo'ed during marriage that 'ould destroy the system
of con4ugal partnership a basic policy in civil la'. 8t 'as also
designed to prevent the e#ercise of undue influence by one
spouse over the other as 'ell as to protect the institution of
marriage 'hich is the cornerstone of family la'. The
prohibitions apply to a couple living as husband and 'ife
'ithout benefit of marriage other'ise =the condition of those
'ho incurred guilt 'ould turn out to be better than those in
legal union.= Those provisions are dictated by public interest
and their criterion must be imposed upon the 'ig of the
parties.
Huiang v. CA
Facts:
Over the ob4ection of private respondent Hilda Corpuz and
'hile she 'as in -anila see7ing employment her husband
sold to the petitioners9spouses Antonio and Auzviminda
Huiang one half of their con4ugal peoperty consisting of their
residence and the lot on 'hich it stood. 6pon her return to
Cotabato respondent gathered her children and 'ent bac7 to
the sub4ect property. (etitioners filed a complaint for
trespassing. Aater there 'as an amicable settlement bet'een
the parties. +eeling that she had the shorer end of the bargain
respondent filed an Amended Complaint against her husband
and petitioners. The said Complaint sought the declaration of a
certain deed of sale 'hich involved the con4ugal property of
private respondent and her husband null and void.
Issue:
/hether the sale 'as void or merely voidable and 'as ratified
by the amicable settlement
Held:
%espondent;s consent to the contract of sale of their con4ugal
property 'as totally ine#istent or absent. The nullity of the
contract of sale is premised on the absence of private
respondent;s consent. To constitute a valid contract the Civil
Code re5uires the concurrence of the follo'ing elements1 <12
cause <>2 ob4ect and <I2 consent the last element being
indubitably absent in the case at bar.
Jeither can the =amicable settlement= be considered a
continuing offer that 'as accepted and perfected by the
parties follo'ing the last sentence of Article 1>E. The order of
the pertinent events is clear1 after the sale petitioners filed a
complaint for trespassing against private respondent after
'hich the barangay authorities secured an =amicable
settlement= and petitioners filed before the -TC a motion for
its e#ecution. The settlement ho'ever does not mention a
continuing offer to sell the property or an acceptance of such a
continuing offer. 8ts tenor 'as to the effect that private
respondent 'ould vacate the property. Dy no stretch of the
imagination can the Court interpret this document as the
acceptance mentioned in Article 1>E.
%ubias v. Datiller
Facts:
Defore the 'ar 'ith Japan +rancisco -ilitante filed an
application for registration of the parcel of land in 5uestion.
After the 'ar the petition 'as heard and denied. (ending
appeal -ilitante sold the land to petitioner his son9in9la'.
(laintiff filed an action for forcible entry against respondent.
&efendant claims the complaint of the plaintiff does not state a
cause of action the truth of the matter being that he and his
predecessors9in9interest have al'ays been in actual open and
continuous possession since time immemorial under claim of
o'nership of the portions of the lot in 5uestion.
Issue:
/hether or not the contract of sale bet'een appellant and his
father9in9la' 'as void because it 'as made 'hen plaintiff 'as
counsel of his father9in9la' in a land registration case involving
the property in dispute
Held:
The stipulated facts and e#hibits of record indisputably
established plaintiff;s lac7 of cause of action and 4ustified the
outright dismissal of the complaint. (laintiff;s claim of
o'nership to the land in 5uestion 'as predicated on the sale
thereof made by his father9in9 la' in his favor at a time 'hen
-ilitante;s application for registration thereof had already
been dismissed by the 8loilo land registration court and 'as
pending appeal in the Court of Appeals.
Article 1E91 of our Civil Code <li7e Article 1E"9 of the 0panish
Civil Code2 prohibits in its si# paragraphs certain persons by
reason of the relation of trust or their peculiar control over the
property from ac5uiring such property in their trust or control
either directly or indirectly and =even at a public or 4udicial
auction= as follo's1 <12 guardians3 <>2 agents3 <I2
administrators3 <E2 public officers and employees3 4udicial
officers and employees prosecuting attorneys and la'yers3
and <,2 others especially dis5ualified by la'.
+undamental consideration of public policy render void and
ine#istent such e#pressly prohibited purchase <e.g. by public
officers and employees of government property intrusted to
them and by 4ustices 4udges fiscals and la'yers of property
and rights in litigation and submitted to or handled by them
under Article 1E91 paragraphs <E2 and <"2 of our Civil Code2
has been adopted in a ne' article of our Civil Code viz Article
1E*9 declaring such prohibited contracts as =inexistent and
void from the beginning.=
8ndeed the nullity of such prohibited contracts is definite and
permanent and cannot be cured by ratification. The public
interest and public policy remain paramount and do not permit
of compromise or ratification. 8n his aspect the permanent
dis5ualification of public and 4udicial officers and la'yers
grounded on public policy differs from the first three cases of
guardians agents and administrators <Article 1E91 Civil
Code2 as to 'hose transactions it had been opined that they
may be =ratified= by means of and in =the form of a
ne' contact in 'hich cases its validity shall be determined
only by the circumstances at the time the e#ecution of such
ne' contract. The causes of nullity 'hich have ceased to e#ist
cannot impair the validity of the ne' contract. Thus the ob4ect
'hich 'as illegal at the time of the first contract may have
already become la'ful at the time of the ratification or second
contract3 or the service 'hich 'as impossible may have
become possible3 or the intention 'hich could not be
ascertained may have been clarified by the parties. The
ratification or second contract 'ould then be valid from its
execution3 ho'ever it does not retroact to the date of the first
contract.=
(hilippine Trust Co. v. %oldan
Facts:
-ariano Dernardo a minor inherited 1K parcels of land from
his deceased father. %espondent -ariano.s step9mother 'as
appointed his guardian. As guardian she sold the 1K parcels
to &r. %amos her brother9in9la' for (1EK**. After a 'ee7 &r.
%amos sold the lands to her for (1"***. 0ubse5uently she
sold E out of 1K parcels to ?milio Cruz. (etitioner replaced
%oldan as guardian and t'o months thereafter this litigation
sought to declare as null and void the sale to &r. %amos and
the sale to ?milio Cruz.
Issue:
/hether the sale of the land by the guardian is null and void
for being violative of the prohibition for a guardian to purchase
either in person or through the mediation of another the
property of her 'ard
Held:
%emembering the general doctrine that guardianship is a trust
of the highest order and the trustee cannot be allo'ed to have
any inducement to neglect his 'ard.s interest and in line 'ith
the court.s suspicion 'henever the guardian ac5uires 'ard.s
property 'e have no hesitation to declare that in this case in
the eyes of the la' 0ocorro %oldan too7 by purchase her
'ard.s parcels thru &r. %amos and that Article 1E"9 of the
Civil Code applies.
$%I& 'ICHE$ vs. 'R%(ENCIO A$ON)O
G.R. No. $*+"02
,a-uar. 0! 1"/2
Facts:
(rudencio Alonzo 'as a'arded by the Hovernment that parcel
of land designatedas Aot >1 of 0ubdi vi si on (l an
(sd9 I>E," of Dal act asan Aami t an Dasi l an Ci t y
i n accordance 'i th %A EKK. The a'ard 'as cancel led
by the Doard of Ai 5uidators on >KJanuary 19," on the
ground that previous thereto Alonzo 'as proved to have
alienated the l and to another in violati on of l a'. 8n
19K> Alonzo.s ri ghts to the l and 'ere rei nstated. On
1E August 19,! Alonzo and hi s 'i fe sol d to (ichel
through a $deed of sal e) all the frui ts of the coconut
trees 'hi ch may be harvested i n the l and for the
period from 1" 0eptember 19,! to 1 January 19K, in
consi derati on of (E>**.**. 8t'as further stipul ated
that the vendor. s ri ght title i nterest and participation
herei n conveyed is of his o'n e#cl usi ve and absol ute
property free from any li ens and encumbrances and he
'arrants to the Nendee good title thereto and to defend the
same against any and all claims of al l persons
'homsoever. ?ven as of the date of sale ho'ever the
l and 'as stil l under lease to one %amon 0ua and it
'as the agreement that part of the consi derati on of
the sale in the sum of (I,"*.** 'as to be paid
by(ichel directly to %amon 0ua so as to release the land from
the clutches of the latter. (ending said payment Alonzo
refused to allo' the (ichel to ma7e any harvest. 8n July19K>
(ichel for the first time since the e#ecution of the deed of sale
in his favor caused the harvest of the fruit of the coconut trees
in the land. Alonzo filed an action for the annulment of a $&eed
of 0ale) before the C+8 Dasilan City. On " January 19KI
the l o'er court rendered its deci si on holding that
although theagreement in 5uestion is denominated by the
parties as a deed of sale of fruits of the coconut trees found in
the vendor.s land it actually is for all legal intents and
purposes a contract of lease of the land itself3 an
encumbrance prohibited under %A EKK. The court thus held
that the deed of sale is null and void and ordered Alonzo to
pay bac7 (ichel the consideration of the sal e in the sum
of (E>** 'i th interests from the date of the fi li ng of
the compl ai nt until pai d and (ichel to pay the sum of
("**.** as attorney.s fees3 'i th costs agai nst (ichel.
:ence the petition to revi e' on certiorari 'as
rai sed before the 0upreme Court. The 0upreme Court set
asi de the 4 udgment of the lo'er court and entered
another dismissing the complaint3 'ithout costs.
Issue: 8s the contract of sale validF
Held: Contract of sale valid essential elements valid
The document in 5uesti on e#presses a vali d contract
of sal e as i t has the essential elements of a contract of
sale as defined under Article 1E"! of the Je' Civil Code.
Article1E"! provi des that $by the contract of sal e one of
the contracting parti es obli gates himself to transfer the
o'nership of and to deliver a determinate thing and the other
to pay therefore a price certain in money or its e5uivalent) and
that $a contract of sale maybe absolute or conditional.) The
sub4ect matter of the contract of sale are the fruits of the
coconut trees on the land during the years from 1" 0eptember
19,! up to 1 January19K, 'hich sub4ect matter is a
determinate thing.
Things having potential e#istence may be the ob4ect of the
contract of sale
6nder Article 1E,1 of the Je' Civil Code things having a
potential e#istence may be the ob4ect of the contract of sale. A
valid sale may be made of a thing 'hich though not
yet actuall y i n e#istence i s reasonabl y certain to come
i nto e#i stence as the natural increment or usual incident of
something already in e#istence and then belonging to the
vendor and the title 'ill vest in the buyer the moment the thing
comes into e#istence. A man may sell property of 'hich he is
potentially and not actually possessed.