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Law 203- Sales: By: Mithi Evasco Villarmea

Sale by one having a voidable title
it from the person in possession of it. There was a valid transmission of ownership from Tagatac to Feist by virtue of the sale and delivery of the car to the swindler. The fraud and deceit practiced on her earmarked the sale as a voidable contract. As long as no action was taken for annulment, the contract remained binding. As the car was again sold to another, the title acquired by the subsequent purchaser was an indefeasible one, even as against the original owner Alcantara-Daus v. de Leon, 404 SCRA 74 FACTS: Hermoso de Leon inherited from his father a certain piece of land by virtue of a deed of extra-judicial partition. To arrange the documents for the properties of his parents, Hermoso engaged the services of Atty. Juan. After the death of Atty. Juan, documents surfaced revealing that the properties has been conveyed to Hermoso’s brothers and sisters and, Juan and his sisters though Hermoso did not intend such. A deed of extrajudicial partition with quitclaim in favour of Rodolfo de Leon surfaced with Hermoso’s signature in it (which was actually forged). Rodolfo sold the land to Aurora Alcantara. Hermoso questions the sale. RTC ruled that Hermoso’s claim on the land is barred by laches since 18 years has passed since the land was sold. It also ruled that the deed of extra-judicial partition, being a notarial document, is presumed authentic. CA reversed. ISSUE: Was the sale of the land to Alcantara valid? RULING: No. There was no valid delivery as Rodolfo is not the rightful owner of the land. A contract of sale is perfected by mere consent, upon meeting of the minds, on the offer and acceptance thereof based on subject matter, price and terms of payment. At this stage, seller’s ownership of the land is not an element in the perfection of the contract. However, this contract creates an obligation on the part of the seller to transfer ownership and to deliver the subject matter of the contract. It is during delivery that the law requires the seller to have the right to transfer ownership of the thing sold. It is through delivery or tradition that the buyer acquires the real rights of ownership over the thing sold. At the time of delivery, Rodolfo was not the owner of the land, thus the consummation of the contract and the consequent transfer would, then, depend on whether he subsequently acquired ownership of the land in accordance with Art 1434 of the Civil Code. But the extra-judicial partition was found to be forged hence there was no valid transfer of ownership— Rodolfo never became the owner of the land. Possession in good faith and acquisition by virtue of prescription cannot be sustained if it is in derogation of the rights of the registered owner. Lundberg v. Gancayco, 50 O.G. 169 FACTS: On July 10, 1948, Surplus Property Commission sold to one Jose Montilla three cranes for the amount of

Article 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and deliver a determinate thing, and the other to pay therefore a price certain in money or its equivalent. In the old Code, the obligation is merely to deliver the thing, so that even if the seller is not the owner, he may validly sell, subject to the warranty to maintain the buyer in legal and peaceful possession of the thing sold.

Thus, under the new Civil Code, the contract of sale has been divided into two stages: 1. Perfection of the contract – the subject or the determinate thing need not yet be owned by the seller;

2. Article 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. This stems from the principle: nemo dat quad non habet (no one gives what he doesn't have).

The question that is still debated is whether a seller can sell a property not owned by him. If so, when should ownership be transferred to a buyer? There are two views regarding this matter. Philippine view. The view in our jurisdiction is that a seller need not be the owner of the property subject of sale at the time of sale or perfection of sale, but he must be the owner at the time when said property is to be delivered to the buyer. Views from other jurisdictions. Manresa, a famous Spanish Civil Law commentator which reflects the view in Spain, argued that such sale of property belonging to another and not the vendor is not valid for the simple reason that he cannot transmit what he does not own. This implies that sale is basically a transaction involving the transfer of ownership. Tagatac v. Jimenez, 53 O.G. 3798 FACTS: The plaintiff sold her car to Feist, who sold it to Sanchez, who sold it to Jimenez. When the payment check issued to Tagatac by Feist was dishonored, the plaintiff sued to recover the vehicle from Jimenez on the ground that she had been unlawfully deprived of it by reason of Feist's deception. RULING According to Article 559, although possession of movable property acquired in good faith is equivalent to a title, one who has lost any movable or has been unlawfully deprived thereof, may nevertheless recover

and instead entered into a compromise with Dominador. accused never complied with the obligation. and when he sold it to plaintiff on July 5. The essence of the sale is the transfer of title or an agreement to transfer it for a price actually paid or promised. V. Despite repeated demands made upon him to deliver said copras. RULING: No.K. RULING: There is reason to believe that the responsibility of herein appellant is only civil in nature. Dominador San Miguel. 1952. On August 29. 1952 to March 26. of Severina San Miguel v. the liability arising therefrom is of a civil and not of a criminal nature. P937. Plaintiff filed present action to seize the crane that was sold to him. under the facts of the record. which is a derivative mode of acquiring ownership. but also to other copra exporters in Siain‖. the title to the thing sold remains in the vendor. Therefore. Under the facts of the case. before the cranes were withdrawn from the stockyard of the Surplus Property Commision. Three months after. may be compelled to pay the P300. which was not yet titled. pay the price under such circumstances would result in Severina’s heirs’ unjust enrichment.000 as agreed upon in the kasunduan. claimed that as both Montilla and plaintiff acted in good faith in the sale of the crane in question. the Surplus Property Commission ordered the cranes be recovered and created a committee to investigate which later found out that the cranes delivered to Montilla were not those described in the invoice. but by delivery. From 1990-1991. it was declared null and void upon petition of Severina San Miguel (petitioner). Hrs. Yu Yek Bio. which is August 1993. On July 15.000 under the express obligation on the part of the said accused to deliver to the said company the equivalent worth of copras at its bodega.13. If the transaction fails. Dominador filed a complaint with the trial court a motion to deliver the owners copy of TCT. the heirs were to sell the land for P1. therefore. The trial court and CA both ruled in favor of the respondent. In a contract of sale. several writs were returned unsatisfied. But the delivery contemplated in the law is the delivery of the very thing sold. filed a petition with the CFI to issue title over lots in dispute. People. took and received the sum of P4. Surplus Property Commission advertised all of their surplus properties which were subsequently bought by the defendant in this case. This principle of civil law is well-settled. in our opinion. et al. the TCT for the land was issued in the names of petitioner. Respondent. a purchaser for value in good faith. accused.Sales: By: Mithi Evasco Villarmea Sale by one having a voidable title P300. he transmitted nothing to the latter. The language of the receipt.000. petitioners opposed stressing the condition in the Kasunduan. 1948. the sale to Montilla was cancelled.5M with the TCT conditioned upon the purchase of another lot. Esguerra v. ISSUE: Who is the rightful owner of the said crane? RULING: We agree with counsel that ownership and other real rights re not transmitted by mere agreement. In time. the heirs of Severina did not pursue the writs of possession and demolition. that the said accused had copras ready for delivery to it. 1078 FACTS: Dionisio Esguerra was charged of Estafa. to insist that Dominador. Montilla cannot be held to be a vendor in good faith. Thereupon. the vendor need not possess the title to the thing sold at the perfection of the contract. Hence. We are not impressed with this contention. Before Montilla or plaintiff was able to withdraw the cranes. ISSUE: Whether or not Dominador.000 for the reason that the petitioner failed to adduce proof of ownership. We are of the opinion that. 1949. a buyer acquires no better title than the seller has.000 shall be fulfilled by Dominador two months from the date of the execution of sale. In 1987. the latter acquired a valid title thereto. but others not involved in the transaction. at an additional sum of P300. Where the things delivered were not the things sold. et al.Law 203. a business firm duly organized and existing under and by virtue of the laws of the Philippines. and admitted that he did not pay the P300. together with the finding of the Court of Appeals that ―Factually. Severina’s heirs are not in a position to transfer title. Jose Montilla sold one of them for the amount of P1. thus. In contracts of sale. Lundberg. However. 108 Phil. title only passes to the vendee upon full payment of the stipulated consideration. Santiago Gancayco. Jose Montilla. It was agreed that the . a complaint was received that the sale of said cranes to Montilla was irregular. for in sales. an advance payment is subject to the disposal of the vendor. acquired no title to the crane in question. nor the plaintiff. CA. It is however. Obviously. However. 364 SCRA 523 FACTS: In 1974. According to the compromise. upon representations made with Yu Yek Huy & Co. the appellant used to supply copra not only to complainant. and the vendee acquires no right to the articles wrongly delivered to him. 1948. that on or about January 12.500 to the plaintiff. thru the Manager of said company. that the transaction was that of sale of copra for future delivery. or upon delivery of the thing sold. the vendor must possess the title and must be able to transfer title at the time of delivery. clearly indicate.

Petitioner can validly sell land even before the actual award to her pursuant to Article 1461 of the Civil Code. Conchita. lived with them.000. son of Gregorio by another woman. 240 SCRA 78 FACTS: Gregorio and Hilaria Nanaman have a number of properties. the NHA executed a deed of sale in her favor.7 hectare land was later sold to Celeste.00. CA. ISSUE: Whether or not the two contracts. When Hilaria died. FACTS: Petitioner Fidela Mananzala is the registered owner of a parcel of land located at Bagong Pagasa. This sale was duly registered. Juan Nanaman. Anacleto agreed to buy from Conchita the 2 parcels of land under controversy. they obtained a loan from the Ilagan Branch of the DBP (Ilagan. this is not applicable to the case at bar. 1985. that within the period of redemption. are valid. Nool v. One of which is a 34. agreeing to return subject lands when plaintiffs have the money to redeem the same. CA. 286 SCRA 722 Sale by one having a voidable title of P100. The contract may be deemed inoperative since it contemplated of an impossible service. thereby impelling the plaintiffs to come to court for relief. then. and that as they are in dire need of money. the mortgage was foreclosed. and was later replaced by Edilberto Noel. On the other hand. An action for reversion for title was made. and upon payment of the balance of P14. Since the contract of sale was inoperative. When Gregorio died. defendants refused to return the said parcels of land to plaintiffs. at the time. CA. and as a result. and were misled by plaintiffs when defendant Anacleto Nool signed the private writing. that as part of their arrangement or understanding. petitioner paid in full the price of the land under the deed of conditional sale and on January 14. which provides that things having a potential existence may be the object of a contract of sale. Noel was then ordered to recover the land from Celeste. On January 31. The 34. Another lot previously owned by Francisco Nool (TCT T-100945) has an area of 3. CA . intestate proceedings concerning the spouses’ estate were instituted.Law 203. whereby the defendants agreed to return to plaintiffs the lands in question. Both parcels are situated in San Manuel. brother of Gregorio.00 of which price was paid to Conchita. Spouses Conchita Nool and Gaudencio Almojera (plaintiffs) alleged that they are the owners of the subject land as they bought the same from Victorio and Francisco Nool. which amounts spouses Anacleto Nool and Emilia Nebre (defendants) failed to pay. the plaintiffs contacted Anacleto Nool for the latter to redeem the foreclosed properties from DBP. was appointed as special administrator. at anytime the latter have the necessary amount.00. 1985. that his sister. private respondent Corazon Aranez brought this action below for specific performance against petitioner to enforce a deed of sale convering the same lot allegedly entered into between her and petitioner on March 22. But this was later declared void when some of the heirs. the titles of the 2 parcels of land in question were transferred to Anacleto. RULING: The contract of sale was void.000. Virgilio and Hilaria managed the properties.000. The sellers can no longer deliver the object of the sale to the buyers as the buyers themselves have already acquired title and delivery thereof from the rightful owner. and the same day the said arrangement was made. The notarization of the deed gave rise to the presumption of its regularity. who did not sign. for a total price Noel v. which the latter did.Sales: By: Mithi Evasco Villarmea Mananzala v. ISSUE: Whether or not the deed of sale entered into between Fidela Mananzala and Corazon Aranez is void. defendants theorized that they acquired the lands in question from the DBP. through negotiated sale. Isabela). which were still registered in the names of Victorino and Francisco Nool. still had the right to redeem the said properties. totaling P56. 276 SCRA 149 FACTS: One lot formerly owned by Victorio Nool (TCT T-74950) has an area of 1 hectare. questioned the agreement. Trial court declared that action has prescribed. Conchita cannot redeem the lands from Anacleto base on the 2 contracts. so is the right of repurchase.0880 hectares. A void contract cannot give rise to a valid contract. 1984.00.7 ha land. Virgilio. 1960. Celeste and heirs of spouses executed an amicable settlement where the former agreed to relinquish his rights over one half of the subject land. RULING: It was held that there was a meeting of the minds between parties as evidenced by the signature of the petitioner on the deed of sale which the National Bureau of Investigation found to be genuine. Quezon City under TCT 323314 and had been in actual possession of said land by virtue of a conditional sale made in her favor by the National Housing Authority.000. On December 14. Petitoner denied selling the land and alleged that her signature was secured through fraud and that the deed of sale was void. secured by a real estate mortgage on said parcels of land. While the civil code allows a sale of future goods. the plaintiffs were to regain possession of the 2 hectares of land. Isabela. P30. and for the failure of the plaintiffs to pay the said loan. another covenant was entered into by the parties. defendant Anacleto having been made to believe. contract of sale and right to repurchase. that latter asked the defendants to return the same but despite the intervention of the Barangay Captain of their place. including interest and surcharges.

1956. 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.500 received from Enrique Azcona. The acts of Virgilio can just be considered as acts that helped Hilaria manage the conjugal property. herein petitioners. Consequently. Such inchoate interest may be the subject of contracts including a contract of sale. is perfected by mere consent. The ten-year prescriptive period has not lapse either.Law 203. 59 Phil. Reyes. Laches does not apply as the administrator immediately filed an action to recover possession and ownership of the property. as attorney in fact of Cordero. It would have been different if the donor-seller sold her interests over the property under the deed of donation which is subject Azcona v. MR-affirmed trial court decision based on laches. What the law requires is that the seller has the right to transfer ownership at the time the thing sold is delivered. On 1 October 1925. 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. with the right of repurchase within the period of 4 years. Alberta L. including real property. 1988. the sale is still valid. the proposed campus did not materialize. Reyes. In sale. to mortgage in her name and representation all her land situated in the municipality of Pola. however. However. Reyes. now deceased. Hilaria was just a trustee for the benefit of who may be legally entitled to it. ISSUE: Can the property be recovered from Celeste? RULING: Only one half. Reyes. the condition being that the land shall be used exclusively for the construction of a provincial high school. but also to other kinds of property. ownership is transferred to respondent Mondejar and those who claim their right from him. of the perfected contract is another matter. ordered Celeste to return one half of the land to the heirs plus rentals. Florentina Cordero. 1962. In the meantime. 299 SCRA 695 FACTS: On April 5. petitioners filed a complaint for quieting of title. CA. Article 1434 of the New Civil Code supports the ruling that the seller's "title passes by operation of law to the buyer. As for the other half. Quijada v. Hilaria can only alienate one half of the land—this being her undivided share of the land. . a parcel of land with certificate of title 58 of the registry of deeds of Mindoro. hence. price and terms of payment of the price. and the Sangguniang Bayan enacted a resolution donating back the land to the donor. Reyes and Cordero jointly executed a power of attorney authorizing Gregorio Venturanza to sell and encumber all their real and personal including their cattle." This rule applies not only when the subject matter of the contract of sale is goods. On July 29. with the right of repurchase within the period of 4 years. in consideration of the sum of P6. respondent Mondejar conveyed portions of the land to the other respondents. Such circumstance happened in this case when petitioners who are Trinidad Quijada's heirs and successors-in-interest became the owners of the subject property upon the reversion of the ownership of the land to them. now deceased. Perfection per se does not transfer ownership which occurs upon the actual or constructive delivery of the thing sold.000 received from Azcona. On 22 October 1920. being a consensual contract. Trinidad sold the land to respondent Regalado Mondejar. On July 5. personally and as attorney in fact of her mother. In 1980. It occurs upon the constructive or actual delivery of the subject matter to the buyer when the seller or her successors-in-interest subsequently acquires ownership thereof. The transaction between Celeste and Hilaria (with Virgilio) was indeed a sale and not just a mortgage. in consideration of the sum of P5. the heirs of Trinidad. Trinidad Quijada and her sisters executed a deed of conditional donation in favor of the Municipality of Talacogon. 446 FACTS: On 11 October 1920. As to Virgilio. he is not qualified as an heir of Gregorio since he is an illegitimate child (the Civil Code then). Sale. however. The consummation. sold to the latter. In this case. Trinidad remained in possession of the land. executed a power of attorney authorizing her only daughter. filed a complaint for forcible entry against the respondent. Mindoro. In 1987. recovery of possession and ownership of the land. what the donor sold was the land itself which she no longer owns.Sales: By: Mithi Evasco Villarmea Sale by one having a voidable title to the possibility of reversion of ownership arising from the non-fulfillment of the resolutory condition. which is manifested the moment there is a meeting of the minds as to the offer and acceptance thereof on three (3) elements: subject matter. ISSUE: Whether the sale between Trinidad and Regalado is valid considering the capacity of the vendor to execute the contract in view of the conditional deed of donation RULING: The donor may have an inchoate interest in the donated property during the time that ownership of the land has not reverted to her. belonging to Cordero. Celeste is ordered to return one-half of the land and pay rentals for the occupation of the same portion from the year he occupied such until it is returned. sold to the latter. On 23 October 1920. 5 parcels of land with certificates of title belonging to her and Cordero. it is essential that the seller is the owner of the property he is selling.

324 SCRA 346 FACTS: A certain Rodolfo Guansing applied for a loan of P90. The High Court still allowed the fiction that there was perfection of the contract when the property offered for sale and accepted by plaintiffs spouses through the wife. Reyes and the deceased Enrique Azcona were really mortgage in their nature. The bank offered this property for sale to plaintiff spouses. Spouses Lim. the bank was also the highest bidder in the Sheriff Sale. RULING: There is no contract says Article 1261 unless there exists the essential requisites of consent of the contracting parties. inasmuch as it is a principle of law that nobody can dispose of that which does not belong to him. which instrument they falsely dated as prior to the death of his wife Isidra Coronel and forged and imitated her signature. nor is any consideration for the obligation stated therein. RULING: It is necessary that the vendor be the owner of the thing sold. with intent to gain for themselves. Thereafter. Thus. and the consideration for the obligation may be established. It is only when the subject-matter is to be delivered that the vendor must have the title or must be the owner thereof. when a person sells or alienates a thing which. ISSUE: Whether or not the instrument of purchase and sale is valid. From the plainly proven facts that the record discloses it is evident that Isidra Coronel was not present to give her consent to the alleged contract of sale. they then executed a deed whereby the deeds of sale with the right of repurchase were cancelled and a mortgage was constituted therein. This is the same principle behind the sale of ―future goods‖ under Art 1462. The father had previously sued this son and the court ordered the cancellation of said title and accordingly reinstated the title of the father. 456 FACTS: That on November 5.Law 203. the resale was a mere formality resorted to for the purpose of obtaining the lawful cancellation of the registration thereof in the registry of deeds and the notation of the mortgage deed. However. he will not be able to comply with his obligation to transfer ownership to the buyer. Art 1459. After a year. Otherwise. it is required that the seller be the owner of the thing sold. at the time of delivery or consummation stage of the sale.000 deposit representing 10% of the price. inasmuch as the vendor was not seized of the property and had no right to make the sale. 1912. a definite object which may be the subject of a contract. In this case. and drew up and signed an alleged instrument of sale. and consequently the contract set forth in said instrument is flagrantly null and void. Ona 33 Phil. ISSUE: Whether or not the deed of resale and mortgage dated November 29. A contract of sale afterwards entered into by the purchaser in a void instrument executed in favour of a third person to the fraud and prejudice of the rights of the heirs of the deceased owner. That on same date. although the said purchaser acted in good faith. Respondents failed to exercise right of redemption. 1926 is legal and valid.Sales: By: Mithi Evasco Villarmea Sale by one having a voidable title Cavite Development Bank v. she discovered that the property was previously registered in the name of the loan applicant who tricked his father into effecting the transfer of the title of this property in his name. he was unable to transmit any right to the purchaser by means of the former void contract. as has been noted. the bank consolidated title or was issued a new title in its name. RULING: The decision reaffirms the settled rule that ownership of the property subject of the sale is not necessary for the perfection of the contract. . whereby Cenon Ona sold to the spouses Benigno Nadres and Victoria Villa the said land. was not his. same defendants. under Art 1434 of the Civil Code. It is at the consummation stage where the principle of nemo dat quod non habet applies. to the fraud and injury of the plaintiff administration. Therefore. Subsequently. wherein they appear as vendors thereof Benigno Nadres and Victoria Villa and as vendees the spouses Crispin Castillo and Maria Recto. because she was dead when said contract was simulated.000 with a bank and mortgaged as collateral a small parcel of land situated in Quezon City with improvements thereon. Coronel v. executed another instrument of sale of the same land. he failed to pay the amortization and the bank foreclosed the mortgage on the lot. Then one of the plaintiff spouses paid P30. but later acquires title thereto. the loan applicant’s title to the lot in question was previously cancelled which naturally rendered spurious the title of the bank which was derived from this cancelled mother title. However. such title passes by operation of law to the buyer or grantee. at that time. Cenon Ona and the other defendants formed a conspiracy. is null and void. the sales with pacto de retro were fictitious for the reason that the contracts entered into by Alberta L.