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Republic of the Philippines


G.R. No. 116635 July 24, 1997

contract of repurchase arisin! out of a contract of sale "here the seller did not have
an# title to the propert# $sold$ is not valid. Since nothin! "as sold, then there is also
nothin! to repurchase.
Statement of the Case
This postulate is e%plained b# this &ourt as it resolves this petition for revie"
on certiorari assailin! the 'anuar# (), *++, Decision
of Respondent &ourt of
in &-..R. &V No. ,/01,, affir2in! the decision
of the trial court
disposed as follo"s3
4H5R56OR5, 7ud!2ent is hereb# rendered dis2issin! the
co2plaint for no cause of action, and hereb#3
*. Declarin! the private "ritin!, 5%hibit $&$, to be
an option to sell, not bindin! and considered validl#
"ithdra"n b# the defendants for "ant of
(. Orderin! the plaintiffs to return to the defendants
the su2 of P,),))).)) plus interest thereon at the
le!al rate, fro2 the ti2e of filin! of defendants9
counterclai2 until the sa2e is full# paid8
,. Orderin! the plaintiffs to deliver peaceful
possession of the t"o hectares 2entioned in
para!raph 1 of the co2plaint and in para!raph ,*
of defendants9 ans"er :counterclai2;8
0. Orderin! the plaintiffs to pa# reasonable rents on
said t"o hectares at P<,))).)) per annum or at
P(,<)).)) per croppin! fro2 the ti2e of 7udicial
de2and 2entioned in para!raph ( of the
dispositive portion of this decision, until the said
t"o hectares shall have been delivered to the
defendants8 and
<. To pa# the costs.
The Antecedent Facts
The facts, "hich appear undisputed b# the parties, are narrated b# the &ourt of
ppeals as follo"s3
T"o :(; parcels of land are in dispute and liti!ated upon here. The
first has an area of * hectare. It "as for2erl# o"ned b# Victorino
Nool and covered b# Transfer &ertificate of Title No. T-10+<). 4ith
an area of ,.)==) hectares, the other parcel "as previousl# o"ned
b# 6rancisco Nool under Transfer &ertificate of Title No. T-*))+0<.
>oth parcel9s are situated in San Manuel, Isabela. The plaintiff
spouses, &onchita Nool and .audencio l2o7era, no" the
appellants, see? recover# of the afore2entioned parcels of land fro2
the defendants, nacleto Nool, a #oun!er brother of &onchita, and
52ilia Nebre, no" the appellees.
In their co2plaint, plaintiff-appellants alle!ed inter alia that the# are
the o"ners of sub7ect parcels of land, and the# bou!ht the sa2e fro2
&onchita9s other brothers, Victorino Nool and 6rancisco Nool8 that as
plaintiffs "ere in dire need of 2one#, the# obtained a loan fro2 the
Ila!an >ranch of the Develop2ent >an? of the Philippines, in Ila!an,
Isabela, secured b# a real estate 2ort!a!e on said parcels of land,
"hich "ere still re!istered in the na2es of Victorino Nool and
6rancisco Nool, at the ti2e, and for the failure of plaintiffs to pa# the
said loan, includin! interest and surchar!es, totalin! P</,))).)), the
2ort!a!e "as foreclosed8 that "ithin the period of rede2ption,
plaintiffs contacted defendant nacleto Nool for the latter to redee2
the foreclosed properties fro2 D>P, "hich the latter did8 and as a
result, the titles of the t"o :(; parcels of land in @uestion "ere
transferred to nacleto Nool8 that as part of their arran!e2ent or
understandin!, nacleto Nool a!reed to bu# fro2 plaintiff &onchita
Nool the t"o :(; parcels of land under controvers#, for a total price of
P*)),))).)), P,),))).)) of "hich price "as paid to &onchita, and
upon pa#2ent of the balance of P*0,))).)), plaintiffs "ere to re!ain
possession of the t"o :(; hectares of land, "hich a2ounts
defendants failed to pa#, and the sa2e da# the said
"as 2ade8 another covenant
"as entered into b# the
parties, "hereb# defendants a!reed to return to plaintiffs the lands in
@uestion, at an#ti2e the latter have the necessar# a2ount8 that
plaintiffs as?ed the defendants to return the sa2e but despite the
intervention of the >aran!a# &aptain of their place, defendants
refused to return the said parcels of land to plaintiffs8 thereb#
i2pellin! the2 :plaintiffs; to co2e to court for relief.
In their ns"er, defendants-appellees theoriAed that the# ac@uired
the lands in @uestion fro2 the Develop2ent >an? of the Philippines,
throu!h ne!otiated sale, and "ere 2isled b# plaintiffs "hen
defendant nacleto Nool si!ned the private "ritin!, a!reein! to return
sub7ect lands "hen plaintiffs have the 2one# to redee2 the sa2e8
defendant nacleto havin! been 2ade to believe, then, that his
sister, &onchita, still had the ri!ht to redee2 the said properties.
The pivot of in@uir# here, as aptl# observed belo", is the nature and
si!nificance of the private docu2ent, 2ar?ed 5%hibit $D$ for plaintiffs,
"hich docu2ent has not been denied b# the defendants, as
defendants even averred in their ns"er that the# !ave an advance
pa#2ent of P,),))).)) therefor, and ac?no"led!ed that the# had a
balance of P*0,))).)) to co2plete their pa#2ent. On this crucial
issue, the lo"er court ad7ud!ed the said private "ritin! :5%hibit $D$;
as an option to sell not bindin! upon and considered the sa2e validl#
"ithdra"n b# defendants for "ant of consideration8 and decided the
case in the 2anner above-2entioned.
There is no @uibble over the fact that the t"o :(; parcels of land in
dispute "ere 2ort!a!ed to the Develop2ent >an? of the Philippines,
to secure a loan obtained b# plaintiffs fro2 D>P :Ila!an >ranch;,
Ila!an, Isabela. 6or the non-pa#2ent of said loan, the 2ort!a!e "as
foreclosed and in the process, o"nership of the 2ort!a!ed lands
"as consolidated in D>P :5%hibits , and 0 for defendants;. fter D>P
beca2e the absolute o"ner of the t"o parcels of land, defendants
ne!otiated "ith D>P and succeeded in bu#in! the sa2e. ># virtue of
such sale b# D>P in favor of defendants, the titles of D>P "ere
cancelled and the correspondin! Transfer &ertificates of Title
:nne%es $&$ and $D$ to the &o2plaint; issued to the defendants.
It should be stressed that Manuel S. Mallorca, authoriAed officer of D>P, certified that
the one-#ear rede2ption period "as fro2 March */, *+=( up to March *<, *+=, and
that the 2ort!a!ors9 ri!ht of rede2ption "as not e%ercised "ithin this period.
D>P beca2e the absolute o"ner of said parcels of land for "hich it "as issued ne"
certificates of title, both entered on Ma# (,, *+=, b# the Re!istr# of Deeds for the
Province of Isabela.
bout t"o #ears thereafter, on pril *, *+=<, D>P entered into a
Deed of &onditional Sale
involvin! the sa2e parcels of land "ith Private Respondent
nacleto Nool as vendee. Subse@uentl#, the latter "as issued ne" certificates of title
on 6ebruar# =, *+==.
The &ourt of ppeals ruled3
4H5R56OR5, findin! no reversible error infir2in! it, the appealed
'ud!2ent is hereb# 66IRM5D in toto. No pronounce2ent as to
The Issues
Petitioners i2pute to Respondent &ourt the follo"in! alle!ed $errors$3
*. The Honorable &ourt of ppeals, Second Division has 2isapplied
the le!al i2port or 2eanin! of 5%hibit $&$ in a "a# contrar# to la"
and e%istin! 7urisprudence in statin! that it has no bindin! effect
bet"een the parties and considered validl# "ithdra"n b# defendants-
appellees for "ant of consideration.
(. The Honorable &ourt of ppeals, Second Division has 2iserabl#
failed to !ive le!al si!nificance to the actual possession and
cultivation and appropriatin! e%clusivel# the pala# harvest of the t"o
:(; hectares land pendin! the pa#2ent of the re2ainin! balance of
fourteen thousand pesos :P*0,))).)); b# defendants-appellees as
indicated in 5%hibit $&$.
,. The Honorable &ourt of ppeals has seriousl# erred in affir2in!
the decision of the lo"er court b# a"ardin! the pa#2ent of rents per
annum and the return of P,),))).)) and not allo"in! the plaintiffs-
appellants to re-ac@uire the four :0; hectares, 2ore or less upon
pa#2ent of one hundred thousand pesos :P*)),))).)); as sho"n in
5%hibit $D$.
The Court's Ruling
The petition is bereft of 2erit.
First Issue3 Are Exhibits "C" and "D" alid and Enforceable!
The petitioner-spouses plead for the enforce2ent of their a!ree2ent "ith private
respondents as contained in 5%hibits $&$ and $D,$ and see? da2a!es for the latter9s
alle!ed breach thereof. In 5%hibit &, "hich "as a private hand"ritten docu2ent labeled
b# the parties as Resibo ti "atulagan or Receipt of !ree2ent, the petitioners appear to
have $sold$ to private respondents the parcels of land in controvers# covered b# T&T
No. T-10+<) and T&T No. T-*))+0<. On the other hand, 5%hibit D, "hich "as also a
private hand"ritten docu2ent in Ilocano and labeled as"asuratan# private respondents
a!reed that &onchita Nool $can ac@uire bac? or repurchase later on said land "hen she
has the 2one#.$
In see?in! to enforce her alle!ed ri!ht to repurchase the parcels of land, &onchita
:7oined b# her co-petitioner-husband; invo?es rticle *,1) of the &ivil &ode "hich
2andates that $:i;f the ter2s of a contract are clear and leave no doubt upon the
intention of the contractin! parties, the literal 2eanin! of its stipulations shall control.$
Hence, petitioners contend that the &ourt of ppeals erred in affir2in! the trial court9s
findin! and conclusion that said 5%hibits & and D "ere $not 2erel# voidable but utterl#
void and ine%istent.$
4e cannot sustain petitioners9 vie". rticle *,1) of the &ivil &ode is applicable onl#
to $alid and enforceable contracts. The Re!ional Trial &ourt and the &ourt of ppeals
ruled that the principal contract of sale contained in 5%hibit & and the au%iliar# contract
of repurchase in 5%hibit D are both void. This conclusion of the t"o lo"er courts
appears to find support in Dignos $s. Court of Appeals,
"here the &ourt held3
>e that as it 2a#, it is evident that "hen petitioners sold said land to
the &abi!as spouses, the# "ere no lon!er o"ners of the sa2e and
the sale is null and void.
In the present case, it is clear that the sellers no lon!er had an# title to the parcels of
land at the ti2e of sale. Since 5%hibit D, the alle!ed contract of repurchase, "as
dependent on the validit# of 5%hibit &, it is itself void. void contract cannot !ive rise to
a valid one.
Veril#, rticle *0(( of the &ivil &ode provides that $:a; contract "hich is
the direct result of a previous ille!al contract, is also void and ine%istent.$
4e should ho"ever add that Dignos did not cite its basis for rulin! that a $sale is null
and void$ "here the sellers $"ere no lon!er the o"ners$ of the propert#. Such a
situation :"here the sellers "ere no lon!er o"ners; does not appear to be one of the
void contracts enu2erated in rticle *0)+ of the &ivil &ode.
Moreover, the &ivil
itself reco!niAes a sale "here the !oods are to be $ac@uired . . . b# the seller
after the perfection of the contract of sale,$ clearl# i2pl#in! that a sale is possible even
if the seller "as not the o"ner at the ti2e of sale, provided he ac@uires title to the
propert# later on.
In the present case ho"ever, it is li?e"ise clear that the sellers can no lon!er deliver
the ob7ect of the sale to the bu#ers, as the bu#ers the2selves have alread# ac@uired
title and deliver# thereof fro2 the ri!htful o"ner, the D>P. Thus, such contract 2a# be
dee2ed to be inoperative
and 2a# thus fall, b# analo!#, under ite2 no. < of rticle
*0)+ of the &ivil &ode3 $Those "hich conte2plate an i2possible service.$ rticle *0<+
of the &ivil &ode provides that $the vendor 2ust have a ri!ht to transfer the o"nership
thereof Bob7ect of the saleC at the ti2e it is delivered.$ Here, deliver# of o"nership is no
lon!er possible. It has beco2e i2possible.
6urther2ore, rticle *<)< of the &ivil &ode provides that $"here !oods are sold b# a
person "ho is not the o"ner thereof, and "ho does not sell the2 under authorit# or
"ith consent of the o"ner, the bu#er ac@uires no better title to the !oods than the seller
had, unless the o"ner of the !oods is b# his conduct precluded fro2 den#in! the
seller9s authorit# to sell.$ Here, there is no alle!ation at all that petitioners "ere
authoriAed b# D>P to sell the propert# to the private respondents. 'urisprudence, on
the other hand, teaches us that $a person can sell onl# "hat he o"ns or is authoriAed to
sell8 the bu#er can as a conse@uence ac@uire no 2ore than "hat the seller can le!all#
No one can !ive "hat he does not have D nono dat %uod non habet. On
the other hand, 5%hibit D presupposes that petitioners could repurchase the propert#
that the# $sold$ to private respondents. s petitioners $sold$ nothin!, it follo"s that the#
can also $repurchase$ nothin!. Nothin! sold, nothin! to repurchase. In this li!ht, the
contract of repurchase is also inoperative D and b# the sa2e analo!#, void.
Contract of Repurchase
Dependent on alidit& of Sale
s borne out b# the evidence on record, the private respondents bou!ht the t"o
parcels of land directl# fro2 D>P on pril *, *+=< after discoverin! that petitioners did
not o"n said propert#, the sub7ect of 5%hibits & and D e%ecuted on Nove2ber ,),
*+=0. Petitioners, ho"ever, clai2 that the# can e%ercise their alle!ed ri!ht to
$repurchase$ the propert#, after private respondents had ac@uired the sa2e fro2
4e cannot accede to this, for it clearl# contravenes the intention of the parties
and the nature of their a!ree2ent. 5%hibit D reads3
4 R I T I N .
That I, nacleto Nool have bou!ht fro2 2# sister &onchita Nool a
land an area of four hectares :0 has.; in the value of One Hundred
Thousand :*)),))).)); Pesos. It is our a!ree2ent as brother and
sister that she can ac%uire bac' or repurchase later on said land
"hen she has the 2one#. B52phasis suppliedC.
s proof of this a!ree2ent "e si!n as brother and sister this "ritten
docu2ent this da# of Nov. ,), *+=0, at District 0, San Manuel,
S!d 52ilio Paron
One $repurchases$ onl# "hat one has previousl# sold. In other "ords, the ri!ht to
repurchase presupposes a valid contract of sale bet"een the same parties.
Endisputedl#, private respondents ac@uired title to the propert# fro2 D>P, and not fro2
ssu2in! arguendo that 5%hibit D is separate and distinct fro2 5%hibit & and is not
affected b# the nullit# of the latter, still petitioners do not thereb# ac@uire a ri!ht to
repurchase the propert#. In that scenario, 5%hibit D ceases to be a $ri!ht to repurchase$
ancillar# and incidental to the contract of sale8 rather, it beco2es an accepted unilateral
pro2ise to sell. rticle *01+ of the &ivil &ode, ho"ever, provides that $an accepted
unilateral pro2ise to bu# or sell a deter2inate thin! for a price certain is bindin! upon
the pro2issor if the pro2ise is supported b# a consideration distinct fro2 the price.$ In
the present case, the alle!ed "ritten contract of repurchase contained in 5%hibit D is
bereft of an# consideration distinct fro2 the price. ccordin!l#, as an independent
contract, it cannot bind private respondents. The rulin! in Diamante vs. CA
this. In that case, the &ourt throu!h Mr. 'ustice Hilario .. Davide, 'r. e%plained3
rticle */)* of the &ivil &ode provides3
&onventional rede2ption shall ta?e place "hen the vendor reserves
the ri!ht to repurchase the thin! sold, "ith the obli!ation to co2pl#
"ith the provisions of article */*/ and other stipulations "hich 2a#
have been a!reed upon.
In illarica# et al. s. Court of Appeals# et al., decided on (+
Nove2ber *+/=, or barel# seven :1; da#s before the respondent
&ourt pro2ul!ated its decisions in this case, this &ourt, interpretin!
the above rticle, held3
The ri!ht of repurchase is not a ri!ht !ranted the vendor b# the
vendee in a subse@uent instru2ent, but is a ri!ht reserved b# the
vendor in the sa2e instru2ent of sale as one of the stipulations of
the contract. Once the instru2ent of absolute sale is e%ecuted, the
vendor can not lon!er reserve the ri!ht to repurchase, and an# ri!ht
thereafter !ranted the vendor b# the vendee in a separate instru2ent
cannot be a ri!ht of repurchase but so2e other ri!ht li?e the option to
bu# in the instant case. . . .
In the earlier case of Ramos# et al. $s. Icasiano# et al., decided in
*+(1, this &ourt had alread# ruled that $an agreement to repurchase
becomes a promise to sell (hen made after the sale# because (hen
the sale is made (ithout such an agreement# the purchaser ac%uires
the thing sold absolutel&# and if he after(ards grants the $endor the
right to purchase# it is a ne( contract entered into b& the purchaser#
as absolute o(ner alread& of the ob)ect. In that case the vendor has
nor reserved to hi2self the ri!ht to repurchase.
In da. De Cru*o# et al. $s. &arriaga# et al. this &ourt found another
occasion to appl# the fore!oin! principle.
Hence, the +ption to Repurchase executed b& pri$ate respondent in
the present case# (as merel& a promise to sell# (hich must be
go$erned b& Article ,-./ of the Ci$il Code "hich reads as follo"s3
rt. *01+. pro2ise to bu# and sell a deter2inate thin! for a price
certain is reciprocall# de2andable.
n accepted unilateral pro2ise to bu# or to sell a deter2inate thin!
for a price certain is bindin! upon the pro2issor if the pro2ise is
supported b# a consideration distinct fro2 the price.
Right to Repurchase 0ased on
1omestead or Trust 2on3Existent
Petitioners also base their alle!ed ri!ht to repurchase on :*; Sec. **+ of the Public
Fand ct
and :(; an i2plied trust relation as $brother and sister.$
The &ourt notes that Victorino Nool and 6rancisco Nool 2ort!a!ed the land to D>P.
The brothers, to!ether "ith &onchita Nool and nacleto Nool, "ere all siblin!s and
heirs @ualified to repurchase the t"o parcels of land under Sec. **+ of the Public Fand
ct "hich provides that $:e;ver# conve#ance of land ac@uired under the free patent or
ho2estead provisions, "hen proper, shall be sub7ect to repurchase b# the applicant,
his "ido" or le!al heirs, "ithin a period of five #ears fro2 the date of conve#ance.$
ssu2in! the applicabilit# of this statutor# provision to the case at bar, it is indisputable
that Private Respondent nacleto Nool alread# repurchased fro2 D>P the contested
properties. Hence, there "as no 2ore ri!ht of repurchase that his sister &onchita or
brothers Victorino and 6rancisco could e%ercise. The properties "ere alread# o"ned b#
an heir of the ho2estead !rantee and the rationale of the provision to ?eep ho2estead
lands "ithin the fa2il# of the !rantee "as thus fulfilled.
The clai2 of a trust relation is li?e"ise "ithout 2erit. The records sho" that private
respondents did not purchase the contested properties fro2 D>P in trust for petitioners.
The for2er, as previousl# 2entioned, in fact bou!ht the land fro2 D>P upon realiAation
that the latter could not validl# sell the sa2e. Obviousl#, petitioners bou!ht it for
the2selves. There is no evidence at all in the records that the# bou!ht the land in trust
for private respondents. The fact that nacleto Nool "as the #oun!er brother of
&onchita Nool and that the# si!ned a contract of repurchase, "hich as discussed
earlier "as void, does not prove the e%istence of an i2plied trust in favor of petitioners.
Second Issue3 2o Estoppel in Impugning the
alidit& of oid Contracts
Petitioners ar!ue that $"hen nacleto Nool too? the possession of the t"o hectares,
2ore or less, and let the other t"o hectares to be occupied and cultivated b# plaintiffs-
appellant, nacleto Nool cannot later on disclai2 the ter2s or contions :sic; a!reed
upon and his actuation is "ithin the a2bit of estoppel . . .
4e disa!ree. The private
respondents cannot be estopped fro2 raisin! the defense of nullit# of contract,
speciall# in this case "here the# acted in !ood faith, believin! that indeed petitioners
could sell the t"o parcels of land in @uestion. rticle *0*) of the &ivil &ode 2andates
that $:t;he action or defense for the declaration of the ine%istence of a contract does not
prescribe.$ It is a "ell-settled doctrine that $as bet"een parties to a contract, validit#
cannot be !iven to it b# estoppel if it is prohibited b# la" or it is a!ainst public polic# :*+
2. 'ur. =)(;. It is not "ithin the co2petence of an# citiAen to barter a"a# "hat public
polic# b# la" see?s to preserve.$
Thus, it is i22aterial that private respondents
initiall# acted to i2ple2ent the contract of sale, believin! in !ood faith that the sa2e
"as valid. 4e stress that a contract void at inception cannot be validated b# ratification
or prescription and certainl# cannot be bindin! on or enforceable a!ainst private
Third Issue3 Return of 456#666.66 (ith Interest
and 4a&ment of Rent
Petitioners further ar!ue that it "ould be a $2iscarria!e of 7ustice$ to order the2 :*; to
return the su2 of P,),))).)) to private respondents "hen alle!edl# it "as Private
Respondent nacleto Nool "ho o"ed the for2er a balance of P*0,))).)) and :(; to
order petitioners to pa# rent "hen the# $"ere allo"ed to cultivate the said t"o
4e are not persuaded. >ased on the previous discussion, the balance of P*0,))).))
under the void contract of sale 2a# not be enforced. Petitioners are the ones "ho have
an obli!ation to return "hat the# undul# and i2properl# received b# reason of the
invalid contract of sale. Since the# cannot le!all# !ive title to "hat the# $sold,$ the#
cannot ?eep the 2one# paid for the ob7ect of the sale. It is basic that $:e;ver# person
"ho throu!h an act of perfor2ance b# another, or an# other 2eans, ac@uires or co2es
into possession of so2ethin! at the e%pense of the latter "ithout 7ust or le!al !round,
shall return the sa2e.$
Thus, if a void contract has alread# $been perfor2ed, the
restoration of "hat has been !iven is in order.$
&orollaril# and as aptl# ordered b#
respondent appellate court, interest thereon "ill run onl# fro2 the ti2e of private
respondents9 de2and for the return of this a2ount in their counterclai2.
In the sa2e
vein, petitioners9 possession and cultivation of the t"o hectares are anchored on private
respondents9 tolerance. &learl#, the latter9s tolerance ceased upon their counterclai2
and de2and on the for2er to vacate. Hence, their ri!ht to possess and cultivate the
land ipso facto ceased.
4H5R56OR5, the petition is D5NI5D and the assailed Decision of the &ourt of
ppeals affir2in! that of the trial court is hereb# 66IRM5D.
2ar$asa# C787# Da$ide# 8r7# 9elo and Francisco# 887# concur7