1. Pichel v.

Alonzo coconut trees cannot be said to be the possession and

Facts: Respondent Prudencio Alonzo was awarded by the
Government that parcel of land in Basilan City in accordance
with Republic Act No. 477. The award was cancelled by the
Board of Liquidators on January 27, 1965 on the ground that,
previous thereto, plaintiff was proved to have alienated the
land to another, in violation of law. In 1972, plaintiff's rights
to the land were reinstated.
On August 14, 1968, plaintiff and his wife sold to defendant
Luis Pichel all the fruits of the coconut trees which may be
harvested in the land in question for the period, September
15, 1968 to January 1, 1976, in consideration of P4,200.00.
Even as of the date of sale, however, the land was still under
lease to one, Ramon Sua, and it was the agreement that part
of the consideration of the sale, in the sum of P3,650.00, was
to be paid by defendant directly to Ramon Sua so as to
release the land from the clutches of the latter. Pending said
payment plaintiff refused to allow the defendant to make any
harvest. In July 1972, defendant for the first time since the
execution of the deed of sale in his favor, caused the harvest
of the fruit of the coconut trees in the land.
Alonzo filed for the annulment of the contract on the ground
that it violated the provisions of R.A. 477, which states that
lands awarded under the said law shall not be subject to
encumbrance or alienation, otherwise the awardee shall no
longer be entitled to apply for another piece of land. The
lower court ruled that the contract, which it held as a contract
of lease, is null and void.
Issues:
(1) Whether the respondent had the right or authority to
execute the "Deed of Sale" in 1968, his award having been
cancelled previously by the Board of Liquidators on January
27, 1965
(2) Whether the contract is one for lease of the land, or for
sale of coconut fruits
(3) Whether the contract is an encumbrance as contemplated
by R.A. 477
enjoyment of the land itself because these rights are distinct
and separate from each other, the first pertaining to the
accessory or improvements (coconut trees) while the second,
to the principal (the land). A transfer of the accessory or
improvement is not a transfer of the principal. It is the other
way around, the accessory follows the principal. Hence, the
sale of the nuts cannot be interpreted nor construed to be a
lease of the trees, much less extended further to include the
lease of the land itself.
The grantee of a parcel of land under R.A. No. 477 is not
prohibited from alienating or disposing of the natural and/or
industrial fruits of the land awarded to him. What the law
expressly disallows is the encumbrance or alienation of the
land itself or any of the permanent improvements thereon.
Permanent improvements on a parcel of land are things
incorporated or attached to the property in a fixed manner,
naturally or artificially. They include whatever is built,
planted or sown on the land which is characterized by fixity,
immutability or immovability. Houses, buildings, machinery,
animal houses, trees and plants would fall under the category
of permanent improvements, the alienation or encumbrance
of which is prohibited. The purpose of the law is not violated
when a grantee sells the produce or fruits of his land. On the
contrary, the aim of the law is thereby achieved, for the
grantee is encouraged and induced to be more industrious
and productive, thus making it possible for him and his family
to be economically self-sufficient and to lead a respectable
life. At the same time, the Government is assured of payment
on the annual installments on the land. We agree with herein
petitioner that it could not have been the intention of the
legislature to prohibit the grantee from selling the natural
and industrial fruits of his land, for otherwise, it would lead
to an absurd situation wherein the grantee would not be able
to receive and enjoy the fruits of the property in the real and
complete sense.

Held:
(1) Until and unless an appropriate proceeding for reversion
is instituted by the State, and its reacquisition of the
ownership and possession of the land decreed by a
competent court, the grantee cannot be said to have been
divested of whatever right that he may have over the same
property. Herein respondent is not deemed to have lost any
of his rights as grantee during the period material to the case
at bar, i.e., from the cancellation of the award in 1965 to its
reinstatement in 1972. Within said period, respondent could
exercise all the rights pertaining to a grantee.

(2) A perusal of the deed fails to disclose any ambiguity or

obscurity in its provisions, nor is there doubt as to the real
intention of the contracting parties. The terms of the
agreement are clear and unequivocal, hence the literal and
plain meaning thereof should be observed. The document in
question expresses a valid contract of sale. It has the
essential elements of a contract of sale. The subject matter
of the contract of sale in question are the fruits of the coconut
trees on the land during the years from September 15, 1968
up to January 1, 1976, which subject matter is a determinate
thing. Under Article 1461 of the New Civil Code, things
having a potential existence may be the object of the
contract of sale. Pending crops which have potential
existence may be the subject matter of sale. The essential
difference between a contract of sale and a lease of things is
that the delivery of the thing sold transfers ownership, while
in lease no such transfer of ownership results as the rights of
the lessee are limited to the use and enjoyment of the thing
leased.

The contract was clearly a "sale of the coconut fruits." The

vendor sold, transferred and conveyed "by way of absolute
sale, all the coconut fruits of his land," thereby divesting
himself of all ownership or dominion over the fruits during
the seven-year period. The possession and enjoyment of the
 2. Tanedo v. CA

FACTS: October 20, 1962: Lazardo Tañedo executed a

notarized deed of absolute sale in favor of his eldest brother,
Ricardo Tañedo, and the latter’s wife, Teresita Barera
(private respondents) whereby he conveyed for P1,500 one
hectare of his future inheritance from his parents.

February 28, 1980: Upon the death of his father Matias,

Lazaro made another a davit to rea rm the 1962 sale.

January 13, 1981: Lazaro acknowledged therein his receipt

of P 10,000.00 as consideration for the sale.

February 1981: Ricardo learned that Lazaro sold the same

property to his children (petitioners) through a deed of sale
dated December 29, 1980

On June 7, 1982, Ricardo recorded the Deed of Sale in their

favor in the Registry of Deeds

Petitioners led a complaint for rescission (plus damages) of

the deeds of sale executed by Lazaro in favor of Ricardo.
They contend that Lolo Matias desired that whatever
inheritance Lazaro would receive from him should be given
to his (Lazaro’s) children.

Ricardo (private respondents) however presented in

evidence a “Deed of Revocation of a Deed of Sale” wherein
Lazaro revoked the sale in favor of his children for the reason
that it was “simulated or fictitious - without any consideration
whatsoever.”

LAZARO’S VERSION: He executed a sworn statement in favor

of his children. BUT he also testified that he sold the property
to Ricardo, and that it was a lawyer who induced him to
execute a deed of sale in favor of his children after giving
him five pesos (P5.00) to buy a “drink”. LABO

ISSUES:
1. Is the sale of a future inheritance valid? NO
2. Was Ricardo’s registration of the deed of valid? YES

HELD: SC rules in favor of Ricardo.

Pursuant to Art 1347, the contract made in 1962 (sale of

future inheritance) is not valid and cannot be the source of
any right nor the creator of any obligation between the
parties. (“No contract may be entered into upon a future
inheritance except in cases expressly authorized by law.)

However, Article 1544 governs the preferential rights of

vendees in cases of multiple sales. The property in question
is land, an immovable, and ownership shall belong to the
buyer who in good faith registers it first in the registry of
property. Thus, although the deed of sale in favor of Ricardo
was later than the one in favor of Lazaro’s children,
ownership would vest with Ricardo because of the undisputed
fact of registration. On the other hand, petitioners have not
registered the sale to them at all.

Lazaro’s children contend that they were in possession of the

property and that Ricardo never took possession thereof. As
between two purchasers, the one who registered the sale in
his favor has a preferred right over the other who has not
registered his title, even if the latter is in actual possession
of the immovable property.
3. Atillano v. Atillano
 4. Schuback & Sons vs. CA

Facts: On October 16, 1981, defendant submitted to plaintiff

the list of bus spare parts he wanted to purchase to its
counterpart in Hamburg. Plaintiff sent an offer on the items
listed.

On December 4, 1981, defendant informed plaintiff that he

preferred genuine to replacement parts, and requested a
15% discount. On December 17, plaintiff submitted its formal
offer.

On December 24, defendant submitted a purchase order, and

submitted the quantity on December 29. Plaintiff
immediately ordered the items from Schuback Hamburg,
which thereafter ordered the same from NDK, a supplier in
Germany. Plaintiff sent a pro-forma invoice to be used in
applying for letter of credit.

On February 16, 1982, plaintiff reminded defendant to open

a letter of credit to avoid delay in shipment. Defendant
mentioned the difficulty he was encountering in procuring the
same. Plaintiff continued receiving invoices and partial
deliveries from NDK.

On October 18, 1982, plaintiff again reminded the defendant

to open a letter of credit. Defendant replied that he did not
make a valid purchase order and that there was no definite
contract between him and the plaintiff. Plaintiff sent a
rejoinder explaining that there is a valid Purchase Order and
suggesting that defendant either proceed with the order and
open a letter of credit or cancel the order and pay the
cancellation fee of 30% of F.O.B. value, or plaintiff will
endorse the case to its lawyers. Demand letters sent to
defendant by plaintiff's counsel dated March 22, 1983 and
June 9, 1983 were to no avail.

Consequently, petitioner filed a complaint for recovery of

actual or compensatory damages, unearned profits, interest,
attorney's fees and costs against private respondent.

Issue: Whether or not a contract of sale has been perfected

between the parties

Held:

Article 1319 of the Civil Code states: "Consent is manifested

by the meeting of the offer and acceptance upon the thing
and the cause which are to constitute the contract. The offer
must be certain and the acceptance absolute. A qualified
acceptance constitutes a counter offer."

The facts presented to us indicate that consent on both sides

has been manifested. The offer by petitioner was manifested
on December 17, 1981 when petitioner submitted its
proposal containing the item number, quantity, part number,
description, the unit price and total to private respondent.

On December 24, 1981, private respondent informed

petitioner of his desire to avail of the prices of the parts at
that time and simultaneously enclosed its Purchase Order. At
this stage, a meeting of the minds between vendor and
vendee has occurred, the object of the contract: being the
spare parts and the consideration, the price stated in
petitioner's offer dated December 17, 1981 and accepted by
the respondent on December 24, 1981.

Although the quantity to be ordered was made determinate

only on December 29, 1981, quantity is immaterial in the
perfection of sales contract. What is of importance is the
meeting of the minds as to the object and cause, which
from the facts disclosed, show that as of December 24,
1981, these essential elements had already concurred.