G.R. No.

L-41847 December 12, 1986

CATALINO LEABRES vs. COURT OF APPEALS and MANOTOK REALTY, INC
FACTS:
Clara Tambunting de Legarda died testate in 1950. Among the properties left is the Legarda da
Tambunting Subdivision located on Rizal Ave Ext, Manila with an area of 80,238.90 sqm.
Claras husband, Vicente Legard, was a special administrator along with two others. He sold a
portion of the subdivision to Leabres for 1k. The probate court supposedly authorized the sale in
1951. Legarda was relieved as an administrator and Philippine Trust Co. took over. It advertised
the sale of the subd. No adverse claim over the subdivision was presented by any person. So, it
was sold to Manotok Realty for 840k. A Deed of Absolute Sale was issued and registered.
Leabres filed a complaint for the quieting of title. He claims it was sold to him as evidenced by
an acknowledgement receipt dated 1950; That he already introduced improvements and erected a
house; However, he has not registered his interest nor did he present his claim for probate in the
testate proceedings. He also claims that Manotok was in bad faith since it had prior knowledge
and notice of Leabres physical possession of the property.
RTC: Dismissed complaint. Reinstated Manotoks counterclaim. Ordered Leabres to surrender
possession to Manotok.
CA: Affirmed. Purchase of registered lands for value and in good faith hold the same free from
all liens except those noted on the titles. The purchaser of a registered land has to rely on the
certificate of title.
HELD:
The receipt is not a contract of sale nor a promise to sell. It only acknowledged the sum of 1k. A
valid contract of sale requires consent, a determinate subject matter and a price certain in money.
Those elements are lacking. Vicente entered into said sale in his own personal capacity and
without court approval. It cannot bind the estate of Clara. Assuming receipt was sufficient proof,
Leabres should have submitted the receipt of the alleged sale to the probate court so that his right
may be recognized. To consider Leabres in good faith would be to put a premium on his own
gross negligence.
Discussion Questions
(1) What are the essential elements of contract of sale? Discuss each element.
The essential elements of a contract of sale are the following:
a.) Consent or meeting of the minds of the parties;
- consent to transfer ownership in exchange for the price.
b) Determinate subject matter;
- generally, there is no sale of generic things; moreover, if the parties
differ as to the object , there can be no meeting of the minds
c) Price certain in money or its equivalent
- this is the cause or the consideration
(2) Is an acknowledgement receipt can be regarded as a contract of sale or promise to sell?
Explain with legal basis.

- An examination of the receipt reveals that the same can neither be regarded as a contract
of sale or a promise to sell. There was merely an acknowledgment of the sum of One Thousand
Pesos (P1,000.00). There was no agreement as to the total purchase price of the land nor to the
monthly installment to be paid by the petitioner. In here , there is an absence of the essential
requisites of a contract of sale. (Jovan Land vs CA, 1997)
(3) What is the evidentiary value of an acknowledgement receipt?
- A receipt is defined as: A written and signed acknowledgment that money has been paid
or goods have been delivered. A receipt is merely presumptive evidence and is not conclusive. A
written acknowledgment that money or a thing of value has been received. Since a receipt is a
mere acknowledgement of payment, it may be subject to explanation or contradiction. A receipt
may be used as evidence against one just as any other declaration or admission. A simple receipt
not under seal is presumptive evidence only and may be rebutted or explained by other evidence
of mistake in giving it, or of non-payment or of the circumstances under which it was given.
(PNB vs CA)

G.R. No. 134219, June 8, 2005

SPOUSES MARIO AND ELIZABETH TORCUATOR vs. SPOUSES REMEGIO AND
GLORIA BERNABE and SPOUSES DIOSDADO AND LOURDES SALVADOR
FACTS:
The subject of this action is Lot 17, Block 5 of the Ayala Alabang Village, Muntinlupa, MetroManila, with an area of 569 square meters and covered by TCT No. S-79773. The above parcel
of land was purchased by the Salvador spouses from the developers of Ayala Alabang, subject
among others, to the following conditions:--It is part of the condition of buying a lot in Ayala
Alabang Village (a) that the lot buyer shall deposit with Ayala Corporation a cash bond (about
P17,000.00 for the Salvadors) which shall be refunded to him if he builds a residence thereon
within two (2) years of purchase, otherwise the deposit shall be forfeited, (b)architectural plans
for any improvement shall be approved by Ayala Corporation, and (c) no lot may be resold by
the buyer unless a residential house has been constructed thereon (Ayala Corporation keeps the
Torrens Title in their [sic] possession). Salvadors sold the parcel of land to Bernabe spouses.
Salvadors executed a special power of attorney authorizing the Bernabes to construct a
residential house on the lot and to transfer the title in their names. Bernabes, on the other hand,
without making any improvement, contracted to sell the parcel of land to Torcuator spouses.
Confronted by the Ayala Alabang restrictions, the parties agreed to cause the sale between the
Salvadors and the Bernabes cancelled, in favor of (a) a new deed of sale from the Salvadors
directly to the Torcuators; (b) a new Irrevocable Special Power of Attorney executed by the
Salvadors to the Torcuators in order for the latter to build a house on the land in question; and (c)
an Irrevocable Special Power of Attorney from the Salvadors to the Bernabes authorizing the
latter to sell, transfer and convey, with power of substitution, the subject lot. The deed of sale
was never consummated nor was payment on the said sale ever effected. Subseuqently, Bernabes
sold to Angeles, a brother-in-law, however the document was not notarized. Torcuators filed an
action against the Bernabes and Salvadors for Specific Performance or Rescission with
Damages. RTC dismissed petition. CA also dismissed the appeal, ruling that the sale between the
Bernabes and theTorcuators was tainted with serious irregularities and bad faith.
HELD:
The agreement is a contract to sell. Contract of sale- title passes to the buyer upon delivery of the
thing sold; Non-payment of the price is a negative resolutory condition. Contract to sellownership is reserved in the seller and is not to pass until the full payment of the purchase price
is made; Full payment is a positive suspensive condition.
The agreement imposed upon petitioners the obligation to fully pay the agreed purchase price for
the property; that ownership shall not pass to petitioners until they have fully paid the price is
implicit in the agreement. Salvadors did not execute a deed of sale in favor of Torcuator, but a
special power of attorney authorizing the Bernabes to sell the property on their behalf, in order to
afford the latter a measure of protection that would guarantee full payment of the purchase price
before any deed of sale in favor of Torcuator was executed. Ayala Corporation retained title to
the property and the Salvador spouses were precluded from selling a residence had been

constructed thereon. Had the agreement been a contract of sale, the special power of attorney
would have been entirely unnecessary as petitioners would have had the right to compel the
Salvadors to transfer ownership to them. The special power of attorney does not contain
the essential elements of the purported contract and, does not even refer to any agreement for the
sale of the property. In any case, it was rendered virtually inoperable as a consequence of the
Salvadors adamant refusal to part with their title to the property. Petition denied.
Discussion Questions
(1) Give the distinction between contract of sale and contract to sell.
- in a contract of sale, title passes to the buyer upon delivery of the thing sold, while in a
contract to sell, ownership is reserved in the seller and is not to pass until the full payment of the
purchase price is made.
(2) In the instant case, was there a valid contract of sale? Explain.
- NO. The agreement is a contract to sell. Contract of sale- title passes to the buyer upon
delivery of the thing sold; Non-payment of the price is a negative resolutory condition. Contract
to sell- ownership is reserved in the seller and is not to pass until the full payment of the
purchase price is made; Full payment is a positive suspensive condition.
The agreement imposed upon petitioners the obligation to fully pay the agreed purchase price for
the property; that ownership shall not pass to petitioners until they have fully paid the price is
implicit in the agreement. Salvadors did not execute a deed of sale in favor of Torcuator, but a
special power of attorney authorizing the Bernabes to sell the property on their behalf, in order to
afford the latter a measure of protection that would guarantee full payment of the purchase price
before any deed of sale in favor of Torcuator was executed. Ayala Corporation retained title to
the property and the Salvador spouses were precluded from selling a residence had been
constructed thereon.
(3) What is the evidentiary value of the Special Power of Attorney executed in favor of the
petitioners by the Salvadors?
- In the instant case, petitioners present as written evidence of the agreement the special
power of attorney executed in their favor by the Salvadors and the summary of
agreement[24]allegedly initialed by respondent Remigio Bernabe. These documents do not
suffice as notes or memoranda as contemplated by Article 1403 of the Civil Code. The special
power of attorney does not contain the essential elements of the purported contract and, more
tellingly, does not even refer to any agreement for the sale of the property. In any case, it was
rendered virtually inoperable as a consequence of the Salvadors adamant refusal to part with
their title to the property.

G.R. No. 71122 March 25, 1988

COMMISSIONER OF INTERNAL REVENUE vs. ARNOLDUS CARPENTRY SHOP,

INC. and COURT OF TAX APPEAL
FACTS:
Arnoldus Carpentry Shop, Inc. is engaged in the business of preparing, processing, buying,
selling, exporting, importing, manufacturing, trading and dealing in cabinet shop products, wood
and metal home and office furniture, cabinets, doors, windows, etc. These furniture, cabinets and
other woodwork were sold locally and exported abroad. For this business venture, private
respondent kept samples or models of its woodwork on display from where its customers may
refer to when placing their orders. In March 1979, CIR conducted a investigation of the business
tax liabilities of Arnoldus. It found out that it is a contractor and not a manufacturer. It was
assessed of 3% contractors tax. Accdg to CIR, Arnoldus manufactures woodworks only upon
previous order from supposed manufacturers and only in accordance with the latters own
design, model number, color, etc. (The products are contracts for a piece of work.) Arnoldus
opposed contending that it is a manufacturer, hence entitled to tax exemption on its gross export
sales under Section 202 (e) of the National Internal Revenue Code.
HELD:
According to CIR: the true test of whether or not the contract is a piece of work (and thus
classifying private respondent as a contractor) or a contract of sale (which would classify private
respondent as a manufacturer) is the mere existence of the product at the time of the perfection of
the contract such that if the thing already exists, the contract is of sale, if not, it is work. TRUE
TEST whether or not it is contract of sale or for a piece of work: What determines whether the
contract is one of work or of sale is whether the thing has been manufactured specially for the
customer and upon his special order. Thus, if the thing is specially done at the order of another,
this is a contract for a piece of work. If, on the other hand, the thing is manufactured or procured
for the general market in the ordinary course of ones business, it is a contract of sale. The
distinction between a contract of sale and one for work, labor and materials is tested by the
inquiry whether the thing transferred is one not in existence and which never would have existed
but for the order of the party desiring to acquire it, or a thing which would have existed and has
been the subject of sale to some other persons even if the order had not been given. The mere
fact that he did not have on hand a particular piece or pieces of furniture ordered does not make
him a contractor only. A contract for the delivery at a certain price of an article Which the vendor
in the ordinary course of his business manufactures or procures for the general market, whether
the same is on hand at the time or not, is a contract of sale, but if the goods are to be
manufactured specially for the customer and upon his special order, and not for the general
market, it is a contract for a piece of work. Arnoldus had a ready stock of its shop products for
sale to its foreign and local buyers. As a matter of fact, the purchase orders from its foreign
buyers showed that they ordered by referring to the models designed by petitioner. Even
purchases by local buyers for television cabinets were by orders for existing models. Hence, it is
a manufacturer. Furthermore, it is a contract of sale.

These products were for sale to the general public and not for special orders. Hence, being a
manufacturer, Arnoldus is entitled to tax exemption under Sec 202 (d) and Sec 167 (d) & (e) of
the Tax Code.
Discussion Questions
(1) Distinguish contract for a piece of work and a contract of sale.
- Art. 1467. A contract for the delivery at a certain price of an article which the vendor in
the ordinary course of his business manufactures or procures for the general market, whether the
same is on hand at the time or not, is a contract of sale, but if the goods are to be manufactured
specially for the customer and upon his special order, and not for the general market, it is a
contract for a piece of work.
(2) The true test of whether or not the contract is a piece of work or a contract of sale is the mere
existence of the product at the time of the perfection of the contract such that if the thing already
exists, the contract is of sale, if not, it is work. Agree or Disagree? Expound and cite the legal
provisions in the Civil Code to support your answer.
- DISAGREE. When the vendor enters into a contract for the delivery of an article which
in the ordinary course of his business he manufactures or procures for the general market at a
price certain (Art. 1458) such contract is one of sale even if at the time of contracting he may not
have such article on hand. Such articles fall within the meaning of "future goods" mentioned in
Art. 1462, par. 1.

G.R. No. L-69259 January 26, 1988

DELPHER TRADES CORPORATION, and DELPHIN PACHECO vs. INTERMEDIATE

APPELATE COURT and HYDRO PIPES PHILIPPINES, INC
FACTS:
Delfin Pacheco and sister Pelagia were the owners of a parcel of land in Polo (now Valenzuela).
On April 3,1974, they leased to Construction Components International Inc. the property and
providing for a right of first refusal should it decide to buy the said property. Construction
Components International, Inc. assigned its rights and obligations under the contract of lease in
favor of Hydro Pipes Philippines, Inc. with the signed conformity and consent of Delfin and
Pelagia. In 1976, a deed of exchange was executed between lessors Delfin and Pelagia Pacheco
and defendant Delpher Trades Corporation whereby the Pachecos conveyed to the latter the
leased property together with another parcel of land also located in Malinta Estate, Valenzuela
for 2,500 shares of stock of defendant corporation with a total value of P1.5M. On the ground
that it was not given the first option to buy the leased property pursuant to the proviso in the
lease agreement, respondent Hydro Pipes Philippines, Inc., filed an amended complaint for
reconveyance of the lot.
HELD:
By their ownership of the 2,500 no par shares of stock, the Pachecos have control of the
corporation. Their equity capital is 55% as against 45% of the other stockholders, who also
belong to the same family group. In effect, the Delpher Trades Corporation is a business conduit
of the Pachecos. What they really did was to invest their properties and change the nature of their
ownership from unincorporated to incorporated form by organizing Delpher Trade Corporation
to take control of their properties and at the same time save on inheritance taxes. The Deed of
Exchange of property between the Pachecos and Delpher Trades Corporation cannot be
considered a contract of sale. There was no transfer of actual ownership interests by the
Pachecos to a third party. The Pacheco family merely changed their ownership from one form to
another. The ownership remained in the same hands. Hence, the private respondent has no basis
for its claim of a light of first refusal under the lease contract
Discussion Questions
(1) Was there a contract of sale? Explain.
- The "Deed of Exchange" of property between the Pachecos and Delpher Trades
Corporation cannot be considered a contract of sale. There was no transfer of actual ownership
interests by the Pachecos to a third party. The Pacheco family merely changed their ownership
from one form to another. The ownership remained in the same hands. Hence, the private
respondent has no basis for its claim of a light of first refusal under the lease contract.
(2) What is the nature of the Deed of Exchange entered into by the petitioners?
- Delpher Trades Corporation is a business conduit of the Pachecos. What they really did
was to invest their properties and change the nature of their ownership from unincorporated to

incorporated form by organizing Delpher Trades Corporation to take control of their properties
and at the same time save on inheritance taxes.
(3) Describe the nature of stock subscription?
- After incorporation, one becomes a stockholder of a corporation by subscription or by
purchasing stock directly from the corporation or from individual owners thereof. In the case at
bar, in exchange for their properties, the Pachecos acquired 2,500 original unissued no par value
shares of stocks of the Delpher Trades Corporation. Consequently, the Pachecos became
stockholders of the corporation by subscription "The essence of the stock subscription is an
agreement to take and pay for original unissued shares of a corporation, formed or to be formed."
It is significant that the Pachecos took no par value shares in exchange for their properties.
(4) Do you agree with the decision? Why?
- YES. Art. 1459. The thing must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered. In the exchange for their properties whereby A and
B acquired 2,500 original unissued no par value shares of stocks of Delpher, the former became
stockholders of the latter by subscription, and by their ownership of the 2,500 shares, A and B
acquired control of the corporation. In effect, Delpher is a business conduit of A and B. What
they did was to invest their properties and change the nature of their ownership from
unincorporated to incorporated form by organizing Delpher to take control of their properties and
at the same time save on inheritance taxes. The deed of exchange of property between A and B
and Delpher cannot be considered a contract of sale. There was no transfer of actual ownership
interests by A and B to a third party. A and B merely changed their ownership from one form to
another. The ownership remained in the same hands. Hence, Hydro has no basis for its claim of a
right of first refusal.

G.R. No. 130972, January 23, 2002

PHILIPPINE LAWIN BUS, CO., MASTER TOURS & TRAVEL CORP., MARCIANO
TAN, ISIDRO TAN, ESTEBAN TAN and HENRY TAN vs. COURT OF APPEALS and
ADVANCE CAPITAL CORPORATION
FACTS:
Lawin initially loaned from Advance Capital Corp. (ACC) Php 8M payable w/in 1 yr and
guaranteed by a chattel mortgage of Lawins 9 buses. Lawin was in default in its payments and
was able to pay only Php 1.8M. Lawin obtained its second loan of 2M payable in one month
under a promissory note. Lawin was in default again hence it asked ACC for a restructuring of
the loan despite this Lawin was still not able to pay. The buses for foreclosed and it was sold for
2M. ACC sent Lawin demand letters to settle its indebtedness amounting to hp 16,484,992.42
then subsequently filed a suit for sum of money against Lawin. Lawin in its defense said that
there was already an arrangement to settle the obligation
o A. Sale of 9 buses and its proceeds will cover for the full payment; OR
o B. ACC will shoulder the rehabilitation of the buses and the earnings of the
operation will be then applied to the loan
HELD:
Dacion en Pago is a special mode of payment, the debtor offers another thing to the creditor who
accepts it as equivalent of payment of the outstanding obligation. It partakes the nature of a sale
whose essential elements are a) consent b)object certain and c) cause and the contract is
perfected at the moment of the meeting of the minds of the parties. In this case there was no
meeting of the minds between Lawin and ACC that the obligation would be extinguished by
dacion en pago. The receipts shows that the delivery of the 2 buses to ACC didnt transfer the
ownership of the bus to ACC rather they were deemed to be only as Lawins agent in the sale of
the bus whereby the proceeds are then to be applied as payment for the loan.
Discussion Questions
(1) What is dacion en pago? Describe its nature and purpose?
- Dacion en Pago is a special mode of payment, the debtor offers another thing to the
creditor who accepts it as equivalent of payment of the outstanding obligation.
- It partakes the nature of a sale whose essential elements are a) consent b)object certain
and c) cause and the contract is perfected at the moment of the meeting of the minds of the
parties.
- Its purpose is to extinguish the obligation.
(2) Distinguish dacion en pago from contract of sale.
SALE
DACION EN PAGO
1. There is no pre-existing credit.
1. There is a pre-existing credit.
2. Gives rise to obligations.
2. Extinguishes obligations.
3. The cause or consideration here is the price, 3. The cause or consideration here, from the

from the viewpoint of the seller; or the

obtaining
of the object, from the viewpoint of the buyer.
4. There is greater freedom in the
determination of the price.
5. The giving of the price may generally end
the
obligation of the buyer

viewpoint of the person offering the dacion en

pago, is the extinguishing of his debt; from the
viewpoint of the creditor, it is the acquisition
of the object offered in lieu of the original
credit.
4. There is less freedom in determining the
price.
5. The giving of the object in lieu of the credit
may extinguish completely or partially the
credit (depending on the agreement).

(3) Were the receipts executed by respondents representative as proof of an agreement of the
parties to deliver the buses to private respondent, sufficient proof of a contract of sale? Explain.
- YES. The receipts executed by respondents representative as proof of an agreement of
the parties that delivery of the buses to private respondent would result in extinguishing
petitioners obligation do not in any way reflect the intention of the parties that ownership thereof
by respondent would be complete and absolute. The receipts show that the two buses were
delivered to respondent in order that it would take custody for the purpose of selling the
same. The receipts themselves in fact show that petitioners deemed respondent as their agent in
the sale of the two vehicles whereby the proceeds thereof would be applied in payment of
petitioners indebtedness to respondent.

G.R. No. 125531, February 12, 1997

JOVAN LAND vs. COURT OF APPEALS and EUGENIO QUESADA, INC.
FACTS:
Petitioner is a corporation engaged in the real estate business and made an offer to private
respondent Quesada Inc. of P10.25 million for a property in Sta. Cruz, Manila. This offer was not
accepted by Quesada and so it sent a second written offer for the same price but inclusive of
an undertaking to pay the documentary stamp tax, transfer tax, registration fees and notarial
charges. A check for P1 million as earnest money was included. This second offer was also
rejected by private respondent. A third written offer of P12 million was sent with a check for P1
million as earnest money. The document was annotated with the phrase received original, 9-489 with the signature of Conrado Quesada next to it. On the basis of the annotation, petitioner
argues that the offer was accepted and thereby a contract of sale for the property was perfected,
filing an action for specific performance to turn over the property. The lower court said that the
annotation did not signify acceptance of the offer; therefore, the contract was not perfected.
HELD:
No. The annotation merely served as memorandum that the document was received by
respondent. It did not signify a meeting of the mind and so, consent, an elemental requisite for
a contract of sale, was not established. The SC said: Although there was a series of
communications through letter -offers and rejections as evident from the facts of this case, still it
is undeniable that no written agreement was reached between petitioner and private respondent
with regard to the sale of the realty. Hence, the alleged transaction is unenforceable as
the requirements under the Statute of Frauds have not been complied with. Under the said
provision, an agreement for the sale of real property or of an interest therein, to be enforceable,
must be in writing and subscribed by the party charged or by an agent thereof. At this point, the
negotiation phase was not yet completed.
Discussion Questions
(1) Was there a contract of sale? What is the status of the contract?
- No. The annotation merely served as memorandum that the document was received by
respondent. It did not signify a meeting of the mind and so, consent, an elemental requisite for
a contract of sale, was not established.
(2) Was there an implied acceptance? What constitute a complete and absolute acceptance of an
offer?
- NO. Petitioner also asseverates that the failure of Conrado Quesada to return the check
for one million pesos, translates to implied acceptance of its third letter-offer. It, however, does
not rebut the finding of the trial court that private respondent was returning the check but
petitioner refused to accept the same and that when Conrado Quesada subsequently sent it back
to petitioner through registered mail, the latter failed to claim its mail from the post office.

- It is true that under Article 1324 of the new Civil Code, the general rule regarding offer
and acceptance is that, when the offerer gives to the offeree a certain period to accept, "the offer
may be withdrawn at any time before acceptance" except when the option is founded upon
consideration, but this general rule must be interpreted as modified by the provision of Article
1479 above referred to, which applies to "a promise to buy and sell" specifically. As already
stated, this rule requires that a promise to sell to be valid must be supported by a consideration
distinct from the price.
(3) What are the stages of a contract of sale? Discuss briefly each stage. At what stage do you
think is the instant case?
(a) generation or negotiation - covers the period from the time the prospective contracting
parties indicate interest in the contract to the time the contract is concluded
(b) perfection meeting of the minds, which is the moment when the parties come to agree
on the terms of the contract
(c) consummation when the object is delivered and the price is paid; fulfillment or
performance of the terms agreed upon in the contract
- Joseph Sy and Conrado Quesada had not passed the negotiation stage relating to the
intended sale by the defendant corporation of the property in question. x x x As the court finds,
there is nothing in the record to point that a contract was ever perfected. In fact, there is nothing
in writing which is indispensably necessary in order that the perfected contract could be enforced
under the Statute of Frauds.

G.R. No. 126376, November 2003

Spouses Buenaventura vs. Court of Appeals
FACTS:
Defendant spouses Leonardo Joaquin and Feliciana Landrito are the parents of plaintiffs
Consolacion, Nora, Emma and Natividad as well as of defendants Fidel, Tomas, Artemio, Clarita,
Felicitas, Fe, and Gavino, all surnamed Joaquin. Leonardo and Feliciana executed several deeds
of sale in favor of their co-defendant children.
Petitioners then filed an action the Regional Trial Court (RTC) of Makati seeking to declare as
null and void ab initio the deeds of sale executed by Leonardo and Feliciana claiming that: (1)
here was no actual valid consideration for the deeds of sale, (2) assuming that there was
consideration in the sums reflected in the questioned deeds, the properties are more than threefold times more valuable than the measly sums appearing therein, and (3) the deeds of sale do
not reflect and express the true intent of the parties
Defendants, on the other hand aver (1) that the sales were with sufficient considerations and
made by defendants parents voluntarily, in good faith, and with full knowledge of the
consequences of their deeds of sale; and (2) that the certificates of title were issued with
sufficient factual and legal basis.
The RTC dismissed the case, declaring that the deeds of sale were all executed for valuable
consideration.
On appeal, the Court of Appeals affirmed the decision of the RTC.
HELD:
Courts cannot follow one every step of his life and extricate him from bad bargains, protect him
from unwise investments, relieve him from one-sided contracts, or annul the effects of foolish
acts. Courts cannot constitute themselves guardians of persons who are not legally incompetent.
Courts operate not because one person has been defeated or overcome by another, but because he
has been defeated or overcome illegally. Men may do foolish things, make ridiculous contracts,
use miserable judgment, and lose money by them indeed, all they have in the world; but not for
that alone can the law intervene and restore. There must be, in addition, a violation of the law,
the commission of what the law knows as an actionable wrong, before the courts are authorized
to lay hold of the situation and remedy it. Moreover, the factual findings of the appellate court
are conclusive on the parties and carry greater weight when they coincide with the factual
findings of the trial court. This Court will not weigh the evidence all over again unless there has
been a showing that the findings of the lower court are totally devoid of support or are clearly
erroneous so as to constitute serious abuse of discretion.[20] In the instant case, the trial court
found that the lots were sold for a valid consideration, and that the defendant children actually
paid the purchase price stipulated in their respective Deeds of Sale. Actual payment of the
purchase price by the buyer to the seller is a factual finding that is now conclusive upon us.
WHEREFORE, we AFFIRM the decision of the Court of Appeals in toto.

Discussion Questions
(1) Can parents validly sell their properties to their children? Explain.
- YES. That a property be sold for a valid consideration, and that the children actually
paid the purchase price stipulated in their respective Deeds of Sale. Actual payment of the
purchase price by the buyer to the seller will be a factual finding.
(2) Discuss the effects of non-payment of the price and lack of consideration in relation to a
contract of sale.
- It is not the act of payment of price that determines the validity of a contract of
sale. Payment of the price has nothing to do with the perfection of the contract. Payment of the
price goes into the performance of the contract. Failure to pay the consideration is different from
lack of consideration. The former results in a right to demand the fulfillment or cancellation of
the obligation under an existing valid contract while the latter prevents the existence of a valid
contract.
(3) Discuss the effects of gross inadequacy of price in a contract of sale.
- Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall not
invalidate a contract, unless there has been fraud, mistake or undue influence. Article 1470 of the
Civil Code further provides: Art. 1470. Gross inadequacy of price does not affect a contract of
sale, except as may indicate a defect in the consent, or that the parties really intended a donation
or some other act or contract. Petitioners failed to prove any of the instances mentioned in
Articles 1355 and 1470 of the Civil Code which would invalidate, or even affect, the Deeds of
Sale. Indeed, there is no requirement that the price be equal to the exact value of the subject
matter of sale. All the respondents believed that they received the commutative value of what
they gave in the consent, or that the parties really intended a donation or some other act or
contract.