SALE SUBJECT TO RESOLUTORY CONDITION

Quijada v. CA [G.R. No. 126444, December 4, 1998)

Facts: Petitioners, as heirs of the late Trinidad Quijada, alleged that their deceased mother never sold, conveyed,
transferred or disposed of the property in question to any person or entity much less to Regalado Mondejar save the
donation made to the Municipality of Talacogon in 1956; that at the time of the alleged sale to Regalado Mondejar
by Trinidad Quijada, the land still belongs to the Municipality of Talacogon, hence, the supposed sale is null and
void. LC rendered judgment in favor of petitioners because, accordingly, Trinidad Quijada had no legal title or right
to sell the land to defendant Mondejar in 1962, 1966, 1967 and 1968, the same not being hers to dispose of because
ownership belongs to the Municipality of Talacogon. CA reversed LC ruling that the sale made by Trinidad Quijada
to respondent Mondejar was valid as the former retained an inchoate interest on the lots by virtue of the automatic
reversion clause in the deed of donation.

Held: The donor may have an inchoate interest in the donated property during the time that ownership of the land
has not reverted to her. Such inchoate interest may be the subject of contracts including a contract of
sale. Ownership 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. What the law requires is that the seller has the right to transfer ownership at the time the thing sold
is delivered. Perfection per se does not transfer ownership which occurs upon the actual or constructive delivery of
the thing sold. A perfected contract of sale cannot be challenged on the ground of non-ownership on the part of the
seller at the time of its perfection; hence, the sale is still valid. [Art. 1465. Things subject to a resolutory condition
may be the object of the contract of sale].

SELLERS OBLIGATION TO TRANSFER OWNERSHIP AT THE TIME OF DELIVERY

Nool vs. CA

Facts: Conchita Nool owned a lot which was mortgaged to DBP when she secured a loan. Upon non-payment of
loan it was foreclosed by DBP. Within the time of redemption Conchita contacted Anacleto Nool to redeem the
foreclosed property which the latter did. The titles were transferred to Anacleto but it was agreed that Conchita can
get back the property soon when she has money. Conchita asked the Anacleto for the return of the property but the
latter refused even after the intervention of the barangay. The case was filed. Anacleto theorized that the lands were
acquired by them from DBP through negotiated sale. He argued that he was made to believe that the property was
still owned by Conchita when they agreed of redemption. RTC said it was DBP who was the owner of the property
when the sale to Anacleto was made. DBP became the absolute owner of the property after the redemption period of
the foreclosed property had lapsed. RTC denied the action by Conchita. It was affirmed by CA.

Held: The contract of repurchase entered by Conchita and Anacleto was void there being no subject to speak of. It is
clear that Conchita was no longer the owner of the property when such agreement was made with Anacleto. It is
likewise clear that the seller can no longer deliver the object of the sale to the buyer, as the buyer had already
acquired the title from the rightful owner. Jurisprudence teaches us that a person can only sell what he owns or is
authorized to sell; the buyer can acquire no more than what the seller can legally transfer. The right to repurchase
presupposes a valid contract of sale between the same parties. CA is decision AFFIRMED. Petition is DENIED.
[Petitioners contend that they could repurchase the property that they "sold" to private respondents when they
allowed the respondent to redeem the properties for them from DBP but DBP certified that the mortgagors' right of
redemption was not exercised within the period. Article 1505 of the Civil Code provides that "where goods are sold
by a person who is not the owner thereof, and who does not sell them under authority or with consent of the owner,
the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct
precluded from denying the seller's authority to sell.", hence, petitioners "sold" nothing, it follows that they can also
"repurchase" nothing.]

Arra Realty Corporation v. Guarantee Development Corporation and Insurance Agency [G.R. No. 142310,
September 20, 2004]
Facts: As gleaned from the agreement, the petitioner ARC, as vendor, and respondent Pealoza, as vendee, entered
into a contract of sale over a portion of the second floor of the building yet to be constructed for the price
ofP3,105,838 payable in installments, the first installment of P901,738 to be paid within sixty (60) days from
November 20, 1982 or on or before January 20, 1983, and the balance payable in twenty (20) equal quarterly
payments of P110,205. As soon as the second floor was constructed within five (5) months, respondent Pealoza
would take possession of the property, and title thereto would be transferred to her name.

Held: The parties had agreed on the three elements of subject matter, price, and terms of payment. Hence, the
contract of sale was perfected, it being consensual in nature, perfected by mere consent, which, in turn, was
manifested the moment there was a meeting of the minds as to the offer and the acceptance thereof. The perfection
of the sale is not negated by the fact that the property subject of the sale was not yet in existence. This is so because
the ownership by the seller of the thing sold at the time of the perfection of the contract of sale is not an element of
its perfection. A perfected contract of sale cannot be challenged on the ground of non-ownership on the part of the
seller at the time of its perfection. What the law requires is that the seller has the right to transfer ownership at the
time the thing is delivered. Perfection per se does not transfer ownership which occurs upon the actual or
constructive delivery of the thing sold. In May 1983, respondent Pealoza took possession of a portion of the second
floor of the building sold to her with an area of 552 square meters. She put up her office and operated the St.
Michael International Institute of Technology. Thenceforth, respondent Pealoza became the owner of the property,
conformably to Article 1477 of the New Civil Code which reads: Art. 1477. The ownership of the thing sold shall be
transferred to the vendee upon the actual or constructive delivery thereof.
In a contract of sale, until and unless the contract is resolved or rescinded in accordance with law, the vendor
cannot recover the thing sold even if the vendee failed to pay in full the initial payment for the property. The failure
of the buyer to pay the purchase price within the stipulated period does not by itself bar the transfer of ownership or
possession of the property sold, nor ipso facto rescind the contract. Such failure will merely give the vendor the
option to rescind the contract of sale judicially or by notarial demand as provided for by Article 1592 of the New
Civil Code: Art. 1592. In the sale of immovable property, even though it may have been stipulated that upon failure
to pay the price at the time agreed upon the rescission of the contract shall of right take place, the vendee may pay,
even after the expiration of the period, as long as no demand for rescission of the contract has been made upon him
either judicially or by a notarial act. After the demand, the court may not grant him a new term.
Admittedly, respondent Pealoza failed to pay the downpayment on time. But then, the petitioner ARC
accepted, without any objections, the delayed payments of the respondent; hence, as provided in Article 1235 of the
New Civil Code, the obligation of the respondent is deemed complied with: Art. 1235. When the obligee accepts the
performance, knowing its incompleteness or irregularity, and without expressing any protest or objection, the
obligation is deemed fully complied with.

Heirs of Jesus Mascuana vs. CA [G.R. No. 158646, June 23, 2005]

Facts: The petitioners reiterated their pose that the deed of absolute sale over the property executed by their father,
Jesus Mascuana, as vendor, and Diosdado Sumilhig as vendee, was a contract to sell and not a contract of sale. They
assert that on its face, the contract appears to be a contract to sell, because the payment of the P1,000.00 balance of
the purchase price was subject to a suspensive condition: the survey of the property, the segregation of the portion
thereof subject of the sale, and the completion of the documents necessary for the issuance of a Torrens title over the
property to and in the name of Sumilhig who was the vendee. The petitioners assert that Sumilhig never paid the
aforesaid amount to the vendor; hence, the obligation of the latter and his predecessors-in-interest (herein
petitioners) to execute a final deed of sale never arose. As such, they aver, title to the property remained reserved in
the vendor and his heirs even after his death. There was no need for the vendor to rescind the deed or collect the said
amount of P1,000.00 under Article 1191 of the New Civil Code because such a remedy applies only to contracts of
sale. The petitioners insist that Sumilhig never acquired title over the property; he could not have transferred any
title to the respondents. Sumilhig could not have transferred that which he did not own.

Held: The petitioners contention has no factual and legal bases. While it is true that Jesus Mascuana executed the
deed of absolute sale over the property on August 12, 1961 in favor of Diosdado Sumilhig for P4,690.00, and that it
was only on July 6, 1962 that TCT No. 967 was issued in his name as one of the co-owners of Lot No. 124,
Diosdado Sumilhig and the respondents nevertheless acquired ownership over the property. The deed of sale
executed by Jesus Mascuana in favor of Diosdado Sumilhig on August 12, 1961 was a perfected contract of sale
over the property. 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 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 that the buyer acquires ownership of the
property sold. As provided in Article 1458 of the New Civil Code, when the sale is made through a public
instrument, the execution thereof is equivalent to the delivery of the thing which is the object of the contract, unless
the contrary appears or can be inferred. The record of the sale with the Register of Deeds and the issuance 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 transfer of ownership takes effect upon the execution of a public instrument covering the
real property. Long before the petitioners secured a Torrens title over the property, the respondents had been in
actual possession of the property and had designated Barte as their overseer. The condition in the deed that the
balance of P1,000.00 shall be paid to the vendor by the vendee as soon as the property sold shall have been surveyed
in the name of the vendee and all papers pertinent and necessary to the issuance of a separate certificate of title in
the name of the vendee shall have been prepared is not a condition which prevented the efficacy of the contract of
sale. It merely provides the manner by which the total purchase price of the property is to be paid. The condition did
not prevent the contract from being in full force and effect.
In a contract to sell, ownership is retained by a seller and is not to be transferred to the vendee until full
payment of the price. Such payment is a positive suspensive condition, the failure of which is not a breach of
contract but simply an event that prevented the obligation from acquiring binding force. It bears stressing that in a
contract of sale, the non-payment of the price is a resolutory condition which extinguishes the transaction that, for a
time, existed and discharges the obligation created under the transaction. [36] A seller cannot unilaterally and
extrajudicially rescind a contract of sale unless there is an express stipulation authorizing it. In such case, the vendor
may file an action for specific performance or judicial rescission.

SUBJECT MATTER MUST BE DETERMINATE

Heirs of Juan San Andres vs. Rodriguez

Facts: Juan San Andres sold a portion of his property to Rodriguez as evidenced by a Deed of Sale. Upon his death
Ramon San Andres was appointed as administrator of the property. He hired a land surveyor and found that
Rodriguez enlarged the property he bought from late Juan. Ramon demanded form the Rodriguez to vacate the
portion allegedly occupied but the latter refused hence the present action. Rodriguez said that the excess portion was
also sold to him by late Juan the following day after the first sale. He argued that the full payment of the whole sold
lot would be effected within five years from the execution of the formal deed of sale after a survey of the property is
conducted, as evidenced by a receipt of sale. The balance of the purchase price was consigned. RTC ruled in favor of
petitioner while CA reversed the ruling. In SC petitioner argued that there is no certain object of the contract of sale
as the lot was not described with sufficiency that there should be another contract to finally ascertain the identity.

Held: Petition has no merit. The contract of sale has the following elements: 1. consent or meeting of the minds, 2.
determinate subject matter, 3. price certain in money. There is no dispute that Rodriguez purchased a portion of Lot
1914-B consisting of 345 square meters. The said portion is located at the middle of the lot. Since the lot
subsequently sold is said to adjoined the previously paid lot, the subject is capable of being determined without the
need of another contract. However, there is a need to clarify what CA said is a conditional sale. CA considered as a
condition the stipulation of the parties that the full consideration, based on a survey of the lot, would be due and
payable within 5 years from the execution of the formal deed of sale. It is evident in the stipulation in the receipt that
the vendor late Juan sold the lot to Rodriguez and undertook the transfer of ownership without any qualification,
reservation or condition. In can be gainsaid from the facts that the contract of sale is absolute, and not conditional.
There is no reservation of ownership nor stipulation providing for a unilateral rescission by either party. In fact the

sale was consummated upon the delivery of the lot to Rodriguez. Art.1477 provides that the ownership of the thing
sold shall be transferred to the vendee upon the actual or constructive deliver thereof. The stipulation that the
payment of the full consideration based on a survey shall be due and payable in 5 years from the execution of the
formal deed of sale is not a condition which affects the efficacy of contract.

GENERIC THINGS AS OBJECT OF SALE

YU TEK v. GONZALES
G.R. No. L-9935 February 1, 1915
Trent, J.
Doctrine: There is a perfected sale with regard to the thing whenever the article of sale has been physically
segregated from all other articles.

Facts: Gonzalez received P3,000 from Yu Tek and Co. and in exchange, the former obligated himself to deliver 600
piculs of sugar of the first and second grade, according to the result of the polarization, within the period of three
months. It was also stipulated that in case Gonzales fails to deliver, the contract will be rescinded he will be
obligated to return the P3,000 received and also the sum of P1,200 by way of indemnity for loss and damages.
Plaintiff proved that no sugar had been delivered to him under the contract nor had he been able to recover the
P3,000. Gonzales assumed that the contract was limited to the sugar he might raise upon his own plantation; that the
contract represented a perfected sale; and that by failure of his crop he was relieved from complying with his
undertaking by loss of the thing due. Issue: Whether or not there was a perfected contract of sale

Held: No. This court has consistently held that there is a perfected sale with regard to the thing whenever the
article of sale has been physically segregated from all other articles. In the case at bar, the undertaking of the
defendant was to sell to the plaintiff 600 piculs of sugar of the first and second classes. Was this an agreement upon
the thing which was the object of the contract? For the purpose of sale its bulk is weighed, the customary unit of
weight being denominated a picul. Now, if called upon to designate the article sold, it is clear that the defendant
could only say that it was sugar. He could only use this generic name for the thing sold. There was no
appropriation of any particular lot of sugar. Neither party could point to any specific quantity of sugar and say:
This is the article which was the subject of our contract. We conclude that the contract in the case at bar was
merely an executory agreement; a promise of sale and not a sale. There was no perfected sale.

SPECIFICATION OF QUANTITY
National Grains Authority v. IAC
Facts: On August 23, 1979, private respondent Leon Soriano offered to sell palay grains to NFA through William
Cabal, the provincial manager in Tuguegarao. The documents submitted were processed, and he was given a quota
of 2,640 cavans, which is the maximum number of cavans he may sell to NFA. On the same day and on the
following day, Soriano delivered 630 cavans, which were no rebagged, classified and weighed. When he demanded
payment, he was told that payment will be held in abeyance since Mr. Cabal was still investigating on an
information received that Soriano was not a bona fide farmer. Instead of withdrawing the palay, Soriano insisted that
the palay grains be delivered and paid. He filed a complaint for specific performance. Petitioners contend that the
delivery was merely made for the purpose of offering it for sale because until the grains were rebagged, classified
and weighed, they are not considered sold. Issue: Whether there was a perfected sale
Held: Soriano initially offered to sell palay grains produced in his farmland to NFA. When the latter accepted the
offer by noting in Soriano's Farmer's Information Sheet a quota of 2,640 cavans, there was already a meeting of the
minds between the parties. The object of the contract, being the palay grains produced in Soriano's farmland and the
NFA was to pay the same depending upon its quality. The fact that the exact number of cavans of palay to be
delivered has not been determined does not affect the perfection of the contract. Article 1349 of the New Civil Code
provides: ". . .. The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract,
provided it is possible to determine the same, without the need of a new contract between the parties." In this case,

there was no need for NFA and Soriano to enter into a new contract to determine the exact number of cavans of
palay to be sold. Soriano can deliver so much of his produce as long as it does not exceed 2,640 cavans. From the
moment the contract of sale is perfected, it is incumbent upon the parties to comply with their mutual obligations or
"the parties may reciprocally demand performance" thereof.
PRICE MUST BE REAL
Mapalo v. Mapalo
Facts: Miguel Mapalo and Candida Quiba, simple illiterate farmers, were registered owners of a residential land in
Manaoag, Pangasinan. Out of love and affection for Maximo Mapalo, Miguels brother who was about to get
married, they decided to donate the eastern half of the land. However, they were deceived into signing a deed of
absolute sale of the entire land on October 15, 1936. The document showed a consideration of P500, but the spouses
actually did not receive anything. The spouses built a fence segregating the donated land. They continued to possess
the western part up to the present. Not known to them, on March 15, 1938, Maximo registered the deed of sale in his
favor and was able to obtain a TCT. On October 20, 1951, Maximo sold the entire land to the Narcisos, and a TCT
was issued. The Narcisos took possession of the eastern part and filed a suit against Miguel and Candida, as well as
Floro Guieb and Rosalia Mapalo Guieb who had a house on the western portion consented by the spouses. The
spouses filed an answer with counterclaim, seeking cancellation of the TCT of the Narcisos on the ground that their
consent to the deed of sale in favor of Maximo was obtained through fraud. The spouses also instituted a complaint
to nullify the deeds of sale in 1936 and 1951. The trial court tried the case jointly. It ruled in favor of Miguel and
Candida. The appellate court, however, reversed the judgment and rendered the sale valid on the ground of
prescription. According to the appellate court, the sale is voidable and subject to annulment only within 4 years after
discovery of fraud. It reckoned March 15, 1938, the date of registration, to be the reckoning period. Issues: (1)
Whether, under the old civil code which was in effect during the execution of the sale, the sale to Maximo is void or
merely voidable (2) Whether the Narcisos were purchasers in good faith
Held: (1) For a contract to exist at all, three essential requisites must concur: (1) consent, (2) object, and (3) cause or
consideration. The Court of Appeals is right in that the element of consent is present as to the deed of sale of October
15, 1936. For consent was admittedly given, albeit obtained by fraud. Accordingly, said consent, although defective,
did exist. In such case, the defect in the consent would provide a ground for annulment of a voidable contract, not a
reason for nullity ab initio. The parties are agreed that the second element of object is likewise present in the deed of
October 15, 1936, namely, the parcel of land subject matter of the same. Not so, however, as to the third element of
cause or consideration. As regards the eastern portion of the land, the Mapalo spouses are not claiming the same, it
being their stand that they have donated and freely given said half of their land to Maximo Mapalo. And since they
did not appeal from the decision of the trial court finding that there was a valid and effective donation of the eastern
portion of their land in favor of Maximo Mapalo, the same pronouncement has become final as to them, rendering it
no longer proper herein to examine the existence, validity efficacy of said donation as to said eastern portion. Now,
as to the western portion, however, the fact not disputed herein is that no donation by the Mapalo spouses obtained
as to said portion. Accordingly, we start with the fact that liberality as a cause or consideration does not exist as
regards the western portion of the land in relation to the deed of 1936; that there was no donation with respect to the
same. Was there a cause or consideration to support the existence of a contrary of sale? Since the deed of sale of
1936 is governed by the Old Civil Code, it should be asked whether its case is one wherein there is no consideration,
or one with a statement of a false consideration. If the former, it is void and inexistent; if the latter, only voidable,
under the Old Civil Code. As observed earlier, the deed of sale of 1936 stated that it had for its consideration Five
Hundred (P500.00) Pesos. In fact, however, said consideration was totally absent. According to Manresa, what is
meant by a contract that states a false consideration is one that has in fact a real consideration but the same is not the
one stated in the document. A contract of purchase and sale is null and void and produces no effect whatsoever
where the same is without cause or consideration in that the purchase price which appears thereon as paid has in fact
never been paid by the purchaser to the vendor.
(2) What was the necessity, purpose and reason of Pacifico Narciso in still going to the spouses Mapalo and asked
them to permit their brother Maximo to dispose of the above-described land? To this question it is safe to state that
this act of Pacifico Narciso is a conclusive manifestation that they (the Narcisos) did not only have prior knowledge
of the ownership of said spouses over the western half portion in question but that they also have recognized said
ownership. It also conclusively shows their prior knowledge of the want of dominion on the part of their vendor
Maximo Mapalo over the whole land and also of the flaw of his title thereto. Under this situation, the Narcisos may
be considered purchasers in value but certainly not as purchasers in good faith.
Bagnas v. CA
Facts: Hilario Mateum died on March 11, 1964, single, without ascendants or descendants, and survived only by
petitioners who are his collateral relatives. He left no will, no debts, and an estate consisting of 29 parcels of land in
Kawit and Imus, 10 of which are involved in this controversy. On April 3, 1964, respondents who are also collateral
relatives of the deceased, but more remote, registered 2 deeds of sale purportedly executed by Mateum in their favor.
The considerations were P1.00 and services rendered, being rendered, and to be rendered for my benefit. On the
strength of the deeds, respondents were able to secure title over the 10 parcels of land. On May 22, 1964, petitioners
commenced a suit against respondents, seeking annulment of the deeds of sale a fictitious, fraudulent or falsified or,

alternatively, as donations void for want of acceptance in public instrument. Respondents contend that the sales were
made for valuable considerations, and attacked the legal standing of the petitioners as being mere collateral heirs.
Issues: (1) Whether petitioners have the legal standing to sue (2) Whether the sale is void for want of consideration
Held: (1) The law as it is now no longer deems contracts with a false cause, or which are absolutely simulated or
fictitious, merely voidable, but declares them void, i.e., inexistent ("nulo") unless it is shown that they are supported
by another true and lawful cause or consideration. A logical consequence of that change is the juridical status of
contracts without, or with a false, cause is that conveyances of property affected with such a vice cannot operate to
divest and transfer ownership, even if unimpugned. If afterwards the transferor dies the property descends to his
heirs, and without regard to the manner in which they are called to the succession, said heirs may bring an action to
recover the property from the purported transferee. As pointed out, such an action is not founded on fraud, but on the
premise that the property never leaves the estate of the transferor and is transmitted upon his death to heirs, who
would labor under no incapacity to maintain the action from the mere fact that they may be only collateral relatives
and bound neither principally or subsidiarily under the deed or contract of conveyance. (2) Upon the consideration
alone that the apparent gross, not to say enormous, disproportion between the stipulated price (in each deed) of P
l.00 plus unspecified and unquantified services and the undisputably valuable real estate allegedly sold worth at
least P10,500.00 going only by assessments for tax purposes which, it is well-known, are notoriously low indicators
of actual value plainly and unquestionably demonstrates that they state a false and fictitious consideration, and no
other true and lawful cause having been shown, the Court finds both said deeds, insofar as they purport to be sales,
not merely voidable, but void ab initio. Neither can the validity of said conveyances be defended on the theory that
their true causa is the liberality of the transferor and they may be considered in reality donations because the law
also prescribes that donations of immovable property, to be valid, must be made and accepted in a public instrument,
and it is not denied by the respondents that there has been no such acceptance which they claim is not required. The
transfers in question being void, it follows as a necessary consequence and conformably to the concurring opinion
in Armentia, with which the Court fully agrees, that the properties purportedly conveyed remained part of the estate
of Hilario Mateum, said transfers notwithstanding, recoverable by his intestate heirs, the petitioners herein, whose
status as such is not challenged.