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SALES (4) Public officers and employees, the property of the State or of any

(September 15, 2018) subdivision thereof, or of any government-owned or controlled


corporation, or institution, the administration of which has been
II. Parties To A Contract Of Sale intrusted to them; this provision shall apply to judges and government
experts who, in any manner whatsoever, take part in the sale;
Capacity of Parties
(5) Justices, judges, prosecuting attorneys, clerks of superior and
ARTICLE 1489. All persons who are authorized in this Code to inferior courts, and other officers and employees connected with the
obligate themselves, may enter into a contract of sale, saving the administration of justice, the property and rights in litigation or levied
modifications contained in the following articles. upon an execution before the court within whose jurisdiction or
territory they exercise their respective functions; this prohibition
Where necessaries are those sold and delivered to a minor or other includes the act of acquiring by assignment and shall apply to lawyers,
person without capacity to act, he must pay a reasonable price with respect to the property and rights which may be the object of
therefor. Necessaries are those referred to in article 290. (1457a) any litigation in which they may take part by virtue of their profession;

ARTICLE 1490. The husband and the wife cannot sell property to (6) Any others specially disqualified by law. (1459a)
each other, except:
ARTICLE 1492. The prohibitions in the two preceding articles are
(1) When a separation of property was agreed upon in the marriage applicable to sales in legal redemption, compromises and
settlements; or renunciations. (n)

(2) When there has been a judicial separation of property under article
191. (1458a) Absolute Incapacity

ARTICLE 1491. The following persons cannot acquire by purchase, Art. 1327. The following cannot give consent to a contract:
even at a public or judicial auction, either in person or through the
mediation of another: (1) Unemancipated minors;

(1) The guardian, the property of the person or persons who may be (2) Insane or demented persons, and deaf-mutes who do
under his guardianship; not know how to write. (1263a)

(2) Agents, the property whose administration or sale may have Art. 1397. The action for the annulment of contracts may be
been intrusted to them, unless the consent of the principal has been instituted by all who are thereby obliged principally or subsidiarity.
given; However, persons who are capable cannot allege the incapacity of
those with whom they contracted; nor can those who exerted
(3) Executors and administrators, the property of the estate under intimidation, violence, or undue influence, or employed fraud, or
administration; caused mistake base their action upon these flaws of the contract.
solemnize marriages, and other acts or omissions relative to the
Art. 1399. When the defect of the contract consists in the incapacity celebration of marriage shall remain and continue to be in force.
of one of the parties, the incapacitated person is not obliged to make
any restitution except insofar as he has been benefited by the thing
or price received by him.
2.) Between Spouses

Necessaries
Art. 1490. The husband and the wife cannot sell property to each
Art. 1489. All persons who are authorized in this Code to obligate
other, except:
themselves, may enter into a contract of sale, saving the modifications
contained in the following articles.
(1) When a separation of property was agreed upon in the
Art. 290. Support is everything that is indispensable for sustenance, marriage settlements; or
dwelling, clothing and medical attendance, according to the social
position of the family. (2) When there has been a judicial separation or property
under Article 191.
Support also includes the education of the person entitled to be
supported until he completes his education or training for some Art. 1492. The prohibitions in the two preceding articles are
profession, trade or vocation, even beyond the age of majority. applicable to sales in legal redemption, compromises and
renunciations.

Art. 87. The action for annulment of marriage must be commenced


Relative Incapacity of Married Persons by the parties and within the periods as follows:

1.) Contracts with Third Parties (1) For causes mentioned in Number 1 of Article 85, by the
party whose parent or guardian did not give his or her
consent, within four years after attaining the age of twenty or
Art. 73. The original of the affidavit required in the last preceding
eighteen years, as the case may be; or by the parent or
article, together with a copy of the marriage contract, shall be sent by
guardian or person having legal charge, at any time before
the person solemnizing the marriage to the local civil registrar of the
such party has arrived at the age of twenty or eighteen years;
municipality where it was performed within the period of thirty days,
after the performance of the marriage. The local civil registrar shall,
however, before filing the papers, require the payment into the (2) For causes mentioned in Number 2 of Article 85, by the
municipal treasury of the legal fees required in Article 65. spouse who has been absent, during his or her lifetime; or by
either spouse of the subsequent marriage during the lifetime
of the other;
Art. 96. The existing laws which punish acts or omissions concerning
the marriage license, solemnization of marriage, authority to
(3) For causes mentioned in Number 3 of Article 85, by the
sane spouse, who had no knowledge of the other's insanity;
or by any relative or guardian of the party of unsound mind, petitioner or deposited by said agent in petitioner's current account
at any time before the death of either party; with the Philippine National Bank.

On the thesis that the sales made by petitioner to his wife were null
(4) For causes mentioned in Number 4, by the injured party,
and void pursuant to the provisions of Article 1490 of the Civil Code
within four years after the discovery of the fraud;
of the Philippines, the Collector considered the sales made by Mrs.
Medina as the petitioner's original sales taxable under Section 186 of
(5) For causes mentioned in Number 5, by the injured party, the National Internal Revenue Code and, therefore, imposed a tax
within four years from the time the force or intimidation assessment on petitioner, calling for the payment of P4,553.54 as
ceased; deficiency sales taxes and surcharges from 1949 to 1952. This same
assessment of September 26, 1953 sought also the collection of
(6) For causes mentioned in Number 6, by the injured party, another sum of P643.94 as deficiency sales tax and surcharge based
within eight years after the marriage. on petitioner's quarterly returns from 1946 to 1952.

On November 30, 1953, petitioner protested the assessment;


however, respondent Collector insisted on his demand. On July 9,
1954, petitioner filed a petition for reconsideration, revealing for the
ANTONIO MEDINA, PETITIONER VS. COLLECTOR OF first time the existence of an alleged premarital agreement of
INTERNAL REVENUE AND THE COURT OF TAX APPEALS, complete separation of properties between him and his wife, and
RESPONDENTS. contending that the assessment for the years 1946 to 1952 had
already prescribed. After one hearing, the Conference Staff of the
DECISION Bureau of Internal Revenue eliminated the 50% fraud penalty and
held that the taxes assessed against him before 1948 had already
Facts: prescribed. Based on these findings, the Collector issued a modified
assessment, demanding the payment of only P3,325.68.
The records show that on or about May 20, 1944, petitioning taxpayer
Antonio Medina married Antonia Rodriguez. Before 1946, the spouses Petitioner again requested for reconsideration, but respondent
had neither property nor business of their own. Later, however, Collector, in his letter of April 4, 1955, denied the same.
petitioner, acquired forest concessions in the municipalities of San
Mariano and Palanan in the Province of Isabela. From 1946 to 1948, Petitioner appealed to the Court of Tax Appeals, which rendered
the logs cut and removed by the petitioner from his concessions were judgment as aforesaid. The court's decision was based on two main
sold to different persons in Manila through his agent, Mariano Osorio. findings, namely,

Sometime in 1949, Antonia R. Medina, petitioner's wife, started to (a) that there was no pre-marital agreement of absolute separation
engage in business as a lumber dealer, and up to around 1952, of property between the Medina spouses; and
petitioner sold to her almost all the logs produced in his San Mariano
(b) assuming that there was such an agreement, the sales in question
concession. Mrs. Medina, in turn, sold in Manila the logs bought from
made by petitioner to his wife were fictitious, simulated, and not bona
her husband through the same agent, Mariano Osorio. The proceeds
fide.
were, upon instructions from petitioner, either received by Osorio for
In his petition for review to this Court, petitioner raises several petitioner or deposited by said agent in petitioner's current account
assignments of error revolving around the central with the Philippine National Bank.

ISSUE: whether or not the sales made by the petitioner to his wife Fourth, although petitioner, a lawyer by profession, already knew,
could be considered as his original taxable sales under the provisions after he was informed by the Collector on or about September of 1953,
of Section 186 of the National Internal Revenue Code. that the primary reason why the sales of logs to his wife could not be
considered as the original taxable sales was because of the express
RULING: prohibition found in Article 1490 of the Civil Code of sales between
Relying mainly on testimonial evidence that before their marriage, he spouses married under a community system; yet it was not until July
and his wife executed and recorded a pre-nuptial agreement for a of 1954 that he alleged, for the first time, the existence of the
regime of complete separation of property, and that all trace of the supposed property separation agreement. Finally, the Day Book of the
document was lost on account of the war, petitioner imputes lack of Register of Deeds on which the agreement would have been entered,
basis for the tax court's factual findings that no agreement of complete had it really been registered as petitioner insists, and which book was
separation of property was ever executed by and between the spouses among those saved from the ravages of the war, did not show that
before their marriage. We do not think so. Aside from the material the document in question was among those recorded therein.
inconsistencies in the testimony of petitioner's witnesses pointed out The foregoing findings notwithstanding, the petitioner argues that the
by the trial court, the circumstantial evidence is against petitioner's prohibition to sell expressed under Article 1490 of the Civil Code has
claim. Thus, it appears that at the time of the marriage between the no application to the sales made by said petitioner to his wife, because
petitioner and his wife, they neither had any property nor business of said transactions are contemplated and allowed by the provisions of
their own, as to have really urged them to enter into the supposed Articles 7 and 10 of the Code of Commerce, But said provisions merely
property agreement. state, under certain conditions, a presumption that the wife is
Secondly, the testimony that the separation of property agreement authorized to engage in business and for the incidents that flew
was recorded in the Registry of Property three months before the therefrom when she so engages therein. But the transactions
marriage, is patently absurd, since such a pre-nuptial agreement could permitted are those entered into with strangers, and do not constitute
not be effective before marriage is celebrated, and would exceptions to the prohibitory provisions of Article 1490 against sales
automatically be cancelled if the union was called of. How then could between spouses.
it be accepted for recording prior to the marriage? Petitioner's contention that the respondent Collector cannot assail the
In the third place, despite their insistence on the existence of the ante- questioned sales, he being a stranger to said transactions, is likewise
nuptial contract, the couple, strangely enough, did not act in untenable. The government, as correctly pointed out by the Tax Court,
accordance with its alleged covenants. Quite the contrary, it was is always an interested party to all matters involving taxable
proved that even during their taxable years, the ownership, usufruct, transactions and, needless to say, qualified to question their validity
and administration of their properties and business were in the or legitimacy whenever necessary to block tax evasion.
husband. And even when the wife was engaged in lumber dealing, Contracts violative of the provisions of Article 1490 of the Civil Code
and she and her husband contracted sales with each other as are null and void (Uy Sui Pin vs. Cantollas, 70 Phil. 55; Uy Coque vs.
aforestated, the proceeds she derived from her alleged subsequent Sioca, 45 Phil. 43). Being void transactions, the sales made by the
disposition of the logs incidentally, by and through the same agent of petitioner to his wife were correctly disregarded by the Collector in his
her husband, Mariano Osorio were either received by Osorio for the tax assessments that considered as the taxable sales those made by
the wife through the spouses' common agent, Mariano Osorio. In either spouse of the subsequent marriage during the lifetime
upholding that stand, the Court below committed no error. of the other;
(3) For causes mentioned in Number 3 of Article 85, by the
It is also the petitioner's' contention that the lower court erred in using sane spouse, who had no knowledge of the other's insanity;
illegally seized documentary evidence against him. But even or by any relative or guardian of the party of unsound mind,
assuming arguendo the truth of petitioner's charge regarding the at any time before the death of either party;
seizure, it is now settled in this jurisdiction that illegally obtained (4) For causes mentioned in Number 4, by the injured party,
documents and papers are admissible in evidence, if they are found within four years after the discovery of the fraud;
to be competent and relevant to the case (see Wong & Lee vs. (5) For causes mentioned in Number 5, by the injured party,
Collector of Internal Revenue, 104 Phil, 469). In fairness to the within four years from the time the force or intimidation
Collector, however, it should be stated that petitioner's imputation is ceased;
vehemently denied by him, and relying on Sections 3, 9, 337 and 338 (6) For causes mentioned in Number 6, by the injured party,
of the Tax Code and the pertinent portions of Revenue Regulations within eight years after the marriage.
No. V-1 and citing this Court's ruling in U.S. vs. Aviado 38 Phil., 10,
the Collector maintains that he and other internal revenue officers and
agents could require the production of books of accounts and other
records from a taxpayer. CORNELIA MATABUENA, PLAINTIFF-APPELLANT, VS.
PETRONILA CERVANTES, DEFENDANT-APPELLEE.
Having arrived at the foregoing conclusion, it becomes unnecessary to
discuss the other issues raised, which are but premised on the DECISION
assumption that a pre-marital agreement of total separation of
property existed between the petitioner and his wife. FERNANDO, J.:
Wherefore, the decision appealed from is affirmed with costs against The plaintiff, now appellant Cornelia Matabuena, a sister of the
the petitioner. deceased Felix Matabuena, maintains that a donation made while he
was living maritally without benefit of marriage to defendant,
now appellee Petronila Cervantes, was void. Defendant would uphold
3.) Applicability to Common-Law Spouses its validity. The lower court, after noting that it was made at a time
before defendant was married to the donor, sustained the latter's
Art. 87. The action for annulment of marriage must be commenced stand. Hence this appeal. The question, as noted, is novel in
by the parties and within the periods as follows: character, this Court not having had as yet the opportunity of ruling
on it. A 1954 decision of the Court of Appeals, Buenaventura v.
(1) For causes mentioned in Number 1 of Article 85, by the
Bautista,[2] by the then Justice J. B. L. Reyes, who was appointed to
party whose parent or guardian did not give his or her
this Court later that year, is indicative of the appropriate response that
consent, within four years after attaining the age of twenty or
should be given. The conclusion reached therein is that a donation
eighteen years, as the case may be; or by the parent or
between common-law spouses falls within the prohibition and is "null
guardian or person having legal charge, at any time before
and void as contrary to public policy."[3] Such a view merits fully the
such party has arrived at the age of twenty or eighteen years;
acceptance of this Court. The decision must be reversed.
(2) For causes mentioned in Number 2 of Article 85, by the
spouse who has been absent, during his or her lifetime; or by
In the decision of November 23, 1965, the lower court, after stating as the dictates of morality require that the same prohibition should
that in plaintiff's complaint alleging absolute ownership of the parcel apply to a common-law relationship. We reverse.
of land in question, she specifically raised the question that the
donation made by Felix Matabuena to defendant Petronila Cervantes 1. As announced at the outset of this opinion, a 1954 Court of Appeals
was null and void under the aforesaid article of the Civil Code and that decision, Buenaventura v. Bautista,[7] interpreting a similar provision
defendant on the other hand did assert ownership precisely because of the old Civil Code[8] speaks unequivocally. If the policy of the law
such a donation was made in 1956 and her marriage to the deceased is, in the language of the opinion of the then Justice J. B. L. Reyes of
did not take place until 1962, noted that when the case was called for that Court, "to prohibit donations in favor of the other consort and his
trial on November 19, 1965, there was a stipulation of facts which it descendants because of fear of undue and improper pressure and
quoted.[4] Thus: "The plaintiff and the defendant assisted by their influence upon the donor, a prejudice deeply rooted in our ancient
respective counsels, jointly agree and stipulate: 1. That the law; 'porque no
deceased Felix Matabuena owned the property in question; 2. That se engañen despojandose el uno al otropor amor que han de consun
said Felix Matabuena executed a Deed of Donation inter vivos in favor o,' [according to] the Partidas (Part. IV, Tit. XI, LAW IV), reiterating
of Defendant, Petronila Cervantes over the parcel of land in question the rationale 'Ne mutuato amore invicemspoliarentur' of the Pandects
on February 20, 1956, which same donation was accepted by (Bk. 24, Tit. 1, De donat, inter virum et uxorem); then there is every
defendant; 3. That the donation of the land to the defendant which reason to apply the same prohibitive policy to persons living together
took effect immediately was made during the common-law as husband and wife without benefit of nuptials. For it is not to be
relationship as husband and wife between the defendant-donee and doubted that assent to such irregular connection for thirty years
the now deceased donor and later said donor and donee were married bespeaks greater influence of one party over the other, so that the
on March 28, 1962; 4. That the deceased Felix Matabuena died danger that the law seeks to avoid is correspondingly
intestate on September 13, 1962; 5. That the plaintiff claims the increased. Moreover, as already pointed out by Ulpian (in his lib.
property by reason of being the only sister and nearest collateral 32 ad Sabinum, fr. 1), 'it would not be just that such donations should
relative of the deceased by virtue of an affidavit of self-adjudication subsist, lest the condition of those who incurred guilt should turn out
executed by her in 1962 and had the land declared in her name and to be better.' So long as marriage remains the cornerstone of our
paid the estate and inheritance taxes thereon."[5] family law, reason and morality alike demand that the disabilities
attached to marriage should likewise attach to concubinage."[9]
The judgment of the lower court on the above facts was adverse to
plaintiff. It reasoned out thus: "A donation under the terms of Article 2. It is hardly necessary to add that even in the absence of the
133 of the Civil Code is void if made between the spouses during the above pronouncement, any other conclusion cannot stand the test of
marriage. When the donation was made by Felix Matabuena in favor scrutiny. It would be to indict the framers of the Civil Code for a
of the defendant on February 20, 1956, Petronila Cervantes and failure to apply a laudable rule to a situation which in its essentials
Felix Matabuena were not yet married. At that time they were not cannot be distinguished. Moreover, if it is at all to be differentiated,
spouses. They became spouses only when they married on March 28, the policy of the law which embodies a deeply-rooted notion of what
1962, six years after the deed of donation had been executed."[6] is just and what is right would be nullified if such irregular relationship
instead of being visited with disabilities would be attended with
We reach a different conclusion. While Art. 133 of the Civil Code benefits. Certainly a legal norm should not be susceptible to such a
considers as void a "donation between the spouses during the reproach. If there is ever any occasion where the principle of
marriage", policy considerations of the most exigent character as well statutory construction that what is within the spirit of the law is as
much a part of it as what is written, this is it. Otherwise the basic
purpose discernible in such codal provision would not be Suzara, she executed a deed of absolute sale over Lot 10 in favor of
attained. Whatever omission may be apparent in an interpretation Suzara without any monetary consideration; thereafter, Suzara
purely literal of the language used must be remedied by an adherence registered the document in his favor and used the property as
to its avowed objective. In the language of Justice collateral for a bank loan P350,000.00; he however failed to pay the
Pablo: "El espiritu que informa la leydebe ser la luz que ha loan so that after four (4) years the mortgage was foreclosed. She
de guiar a los tribunales en la aplicacion de sus disposiciones."[10] paid the bank P40,638.88 to restructure the loan resulting in the
extension of the redemption period to two (2) years. However, without
3. The lack of validity of the donation made by the deceased to her knowledge and before the expiration of the extended period,
defendant Petronila Cervantes does not necessarily result in plaintiff Suzara redeemed the property. She tried to talk to him but he avoided
having exclusive right to the disputed property. Prior to the death of her. Finally, to protect her interest, she executed an Affidavit of
Felix Matabuena, the relationship between him and the defendant was Adverse Claim which she filed with the Register the Deeds of Quezon
legitimated by their marriage on March 28, 1962. She is therefore his City asserting that her sale in favor of Suzara was null and void for
widow. As provided for in the Civil Code, she is entitled to one-half of lack of consideration and being contrary to law and public policy.
the inheritance and the plaintiff, as the surviving sister, to the other
half.[11]
On 22 February 1990 she filed a complaint with Regional Trial Court
WHEREFORE, the lower court decision of November 23, 1965 of Manila against respondent Suzara for quieting of title, declaration
dismissing the complaint with costs is reversed. The questioned of nullity of documents and damages with prayer for writ of
donation is declared void, with the rights of plaintiff and defendant preliminary injunction.
as pro indiviso heirs to the property in question recognized. The case
is remanded to the lower court for its appropriate disposition in Denying petitioner's claim, respondent Suzara claimed that he was
accordance with the above opinion. Without pronouncement as to already the registered owner of the property as evidenced by TCT No.
costs. 295388, having acquired the same from petitioner through a notarized
deed of absolute sale; the sale was for a valuable consideration and
not tainted with fraud nor executed under duress; and, petitioner was
estopped from impugning the validity of the sale and questioning his
GLORIA R. CRUZ, petitioner, title over the property.
vs
COURT OF APPEALS, ROMY V. SUZARA and MANUEL R. On 22 March 1990 the trial court issued a temporary restraining order
VIZCONDE, respondents. enjoining private respondent, his agents and/or any person or persons
acting in his behalf, from disposing and/or encumbering the litigated
FACTS : property until further orders.

Gloria R. Cruz was the owner of Lot 10, BLK. 565, PSD-38911, with an On 3 April 1990 petitioner filed an ex parte motion to admit her
area of 747.7 square meters, together with the improvements amended complaint impleading respondent Manuel R. Vizconde as
thereon, situated at 22 Bituan St., Bgy. Doña Imelda, Quezon City, additional defendant and praying that the Register of Deeds of Quezon
covered by TCT No. 242553 in her name; in 1977 she and respondent City be ordered to annotate her notice of lis pendens on respondent
Romeo V. Suzara lived together as husband and wife without benefit Suzara's title. Favorably resolving her motion, the trial court admitted
of marriage; in September 1982, solely out of love and affection for her amended complaint and ordered the Register of Deeds to show
cause why it was refusing to annotate the notice of lis pendens filed respondent Vizconde was an innocent purchaser for value in good
by her. faith.

On 22 May 1990 the Register of Deeds filed a manifestation informing Petitioner insists that there being a factual finding by the trial court
the trial court that the property had been sold by respondent Suzara and the Court of Appeals that she and respondent Suzara were
to his co-respondent Vizconde who was already the registered owner common-law husband and wife, the sale between them was void and
thereof and since Vizconde was not impleaded in the case the notice inexistent, citing Art. 1490 of the Civil Code. She argues that the
of lis pendens could not be annotated on his title until the consideration of "love, affection and accommodation" for the sale was
requirements of law were met and the annotation of the notice not a valid cause for the conveyance of the property as there was no
judicially ordered. As stated in the immediately preceding paragraph, price paid in money or its equivalent, and since her sale to Suzara was
the motion to admit amended complaint impleading respondent null and void the issue of its illegality cannot be waived or ratified;
Vizconde was filed ex parteon 3 April 1990.1 resultantly, the sale by Suzara to his co-respondent Vizconde must
also be declared null and void the latter being a purchaser in bad faith.
On 24 September 1990, responding to the amended complaint, Petitioner also contends that although she filed her adverse claim on
Vizconde answered that there was no privity of contract between him 22 January 1990 or after the execution of the deed of sale between
and petitioner; he (Vizconde) was a purchaser for value in good faith; the private respondents on 22 December 1989, the sale was
the sale between him and Suzara was executed on 22 December 1989 nevertheless nullified when it was substituted by a second deed of sale
or long before the execution of the Affidavit of Adverse Claim; and, dated 5 February 1990, registered 6 March 1990, to avoid payment of
the action was barred by laches, estoppel and prescription. fines and penalties for late registration.

On 24 May 1993 the trial court rendered a decision dismissing the We cannot sustain petitioner. Although under Art. 1490 the husband
complaint and the counterclaims as well as the cross claim of and wife cannot sell property to one another as a rule which, for policy
respondent Vizconde. It ruled that the sale between petitioner and consideration and the dictates of morality require that the prohibition
respondent Suzara was valid with "love, affection and apply to common-law relationships, 4 petitioner can no longer seek
accommodation" being the consideration for the sale. It also found reconveyance of the property to her as it has already been acquired
Vizconde an innocent purchaser for value because at the time he by respondent Vizconde in good faith and for value from her own
purchased the property he was unaware of the adverse claim of transferee.
petitioner.2
The real purpose of the Torrens system of registration is to quiet title
On appeal, the Court of Appeals affirmed the judgment of the court a to land and to put a stop to any question of legality of the title except
quo. claims which have been recorded in the certificate of title at the time
of registration or which may arise subsequent thereto. 5 Every
Petitioner now comes to us for review on certiorari seeking to reverse registered owner and every subsequent purchaser for value in good
and set aside the decision of the Court of Appeals and that of the trial faith holds the title to the property free from all encumbrances except
court. She contends that the lower courts erred in holding that the those noted in the certificate. Hence, a purchaser is not required to
sale between her and Suzara was valid; that she had no legal explore further what the Torrens title on its face indicates in quest for
personality to question the legality of the sale in his favor, and, any hidden defect or inchoate right that may subsequently defeat his
right thereto. 6
Where innocent third persons, relying on the correctness of the The fact is, petitioner herself admits that the actual sale of the
certificate of title thus issued, acquire rights over the property the property occurred on 22 December 1989. A contract of sale is
court cannot disregard such rights and order the total cancellation of consensual and is perfected once agreement is reached between the
the certificate.7 The effect of such an outright cancellation would be parties on the subject matter and the consideration therefor.
to impair public confidence in the certificate of title, for everyone
dealing with property registered under the Torrens system would have We cannot grant petitioner's prayer to have respondent Vizconde's
to inquire in every instance whether the title has been regularly or certificate of title declared null and void. Neither can we order the
irregularly issued. This is contrary to the evident purpose of the reconveyance of the property to petitioner. Vizconde being a
law.8 Every person dealing with registered land may safely rely on the purchaser of registered land for value in good faith holds an
correctness of the certificate of title issued therefor and the law will in indefeasible title to the land. This is without prejudice however to any
no way oblige him to go behind the certificate to determine the appropriate remedy petitioner may take against her erstwhile
condition of the property.9 Even if a decree in a registration common-law husband, respondent Suzara.
proceeding is infected with nullity, still an innocent purchaser for value
relying on a Torrens title issued in pursuance thereof is protected. A WHEREFORE, the petition is DENIED. The decision of the Court of
purchaser in good faith is one who buys the property of another Appeals affirming that of the trial court is AFFIRMED. Costs against
without notice that some other person has a right to or interest in such petitioner.
property and pays a full and fair price for the same at the time of such
purchase or before he has notice of the claim of another person.
SO ORDERED.

Both lower courts found that at the time respondent Suzara executed
the deed of absolute sale on 22 December 1989 in favor of respondent
Vizconde, which was acknowledged before a notary public, Suzara was
the registered owner appearing in the certificate of title. When the Special Disqualifications
sale was executed, nothing was annotated in the certificate to indicate
any adverse claim of a third person or the fact that the property was Art. 1491. The following persons cannot acquire by purchase, even
the subject of a pending litigation. It was only on 22 January 1990, at a public or judicial auction, either in person or through the
after the sale to respondent Vizconde, that petitioner filed her adverse mediation of another:
claim with the Register of Deeds. Based on this factual backdrop, (1) The guardian, the property of the person or persons who
which we consider binding upon this Court, there is no doubt that may be under his guardianship;
respondent Vizconde was a purchaser for value in good faith and that (2) Agents, the property whose administration or sale may
when he bought the property he had no knowledge that some other have been entrusted to them, unless the consent of the
person had a right to or an adverse interest in the property. As the principal has been given;
Court of Appeals observed, Vizconde paid a full and fair price for the (3) Executors and administrators, the property of the estate
property at the time of the purchase and before he had any notice of under administration;
petitioner's claim or interest in the property. For purposes of resolving (4) Public officers and employees, the property of the State or
the present controversy, the allegation that there was a second deed of any subdivision thereof, or of any government-owned or
of sale executed solely for the purpose of evading the penalties controlled corporation, or institution, the administration of
resulting from late payment of taxes and registration is immaterial. which has been intrusted to them; this provision shall apply
to judges and government experts who, in any manner ineffective, because Socorro Roldan had acquired no valid title to
whatsoever, take part in the sale; convey to Cruz.
(5) Justices, judges, prosecuting attorneys, clerks of superior
and inferior courts, and other officers and employees The material facts of the case are not complicated. These 17 parcels
connected with the administration of justice, the property and located in Guiguinto, Bulacan, were part of the properties inherited by
rights in litigation or levied upon an execution before the court Mariano L. Bernardo from his father, Marcelo Bernardo, deceased. In
within whose jurisdiction or territory they exercise their view of his minority, guardianship proceedings were instituted, where
respective functions; this prohibition includes the act of in Socorro Roldan was appointed his guardian. She was the surviving
acquiring by assignment and shall apply to lawyers, with spouse of Marcelo Bernardo, and the step-mother of said Mariano
respect to the property and rights which may be the object of L. Bernardo.
any litigation in which they may take part by virtue of their On July 27, 1947, Socorro Roldan filed in
profession. said guardianship proceedings (Special Proceeding 2485, Manila), a
(6) Any others specially disqualified by law. motion asking for authority to sell as guardian the 17 parcels for the
sum of P14,700 to Dr. Fidel C. Ramos, the purpose of the sale being
Art. 1492. The prohibitions in the two preceding articles are allegedly to invest the money in a residential house, which the
applicable to sales in legal redemption, compromises and minor desired to have on Tindalo Street, Manila. The motion was
renunciations. granted.

On August 5, 1947 Socorro Roldan, as guardian, executed the proper


deed of sale in favor of her brother-in-law Dr. Fidel C.
1.) Guardians, Angels, and Administrators Ramos (Exhibit A-l); and on August 12, 1947 she asked for, and
obtained judicial confirmation of the sale. On August 13, 1947, Dr.
PHILIPPINE TRUST COMPANY v. SOCORRO ROLDAN Fidel C. Ramos executed in favor of Socorro Roldan, personally, a
deed of conveyance covering the same seventeen parcels, for the
sum of PI5,000 (Exhibit A-2) And on October 21, 1947 Socorro
Roldan sold four parcels out of the seventeen to Emilio Cruz for
BENGZON, J.:
P3,000, reserving to herself the right to repurchase (Exhibit A-3).
As guardian of the property of the minor Mariano L. Bernardo, the
The Philippine Trust Company replaced Socorro Roldan as guardian,
Philippine Trust Company filed in the Manila court of first instance
on August 10, 1948. And this litigation, started two months later,
a complaint to annul two contracts regarding 17 parcels of land: (a)
seeks to undo what the previous guardian had done. The step-mother
sale thereof by Socorro Roldan, as guardian of said minor, to Fidel
in effect, sold to herself, the properties of her ward,
C. Ramos; and (b) sale thereof by Fidel C. Ramos to Socorro Roldan
contends the plaintiff, and the sale should be annulled because it
personally. The complaint likewise sought to annul a conveyance of
violates Article 1459 of the Civil Code prohibiting the guardian from
four out of the said seventeen parcels by Socorro Roldan to Emilio
purchasing "either in person or through the mediation of another" the
Cruz.
property of her ward.
The action rests on the proposition that the first two sales were in
reality a sale by the guardian to herself therefore, null and void under The court of first instance, following our decision in
Article 1459 of the Civil Code. As to the third conveyance, it is also Rodriguez vs. Mactal, 60 Phil. 13 held the article was not
controlling, because there was no proof that. Fidel C. Ramos was a court's suspicion whenever the guardian acquires the ward's
mere intermediary or that the latter had previously agreed with property [1] we have no hesitation to declare that in this case, in
Socorro Roldan to buy the parcels for her benefit. the eyes of the law, Socorro Roldan took by purchase
her ward's parcels thru Dr. Ramos, and that Article 1459 of the Civil
However, taking the former guardian at her word she swore she had Code applies.
repurchased the lands from Dr. Fidel C. Ramos to preserve it, and to
give her protege opportunity to redeem the (Court rendered She acted it may be true without malice; there may have
judgment upholding the contracts but allowing the minor to been no previous agreement between her and Dr. Ramos to the effect
repurchase all the parcels by paying P15,000, within one year. that the latter would buy the lands for her. But the stubborn fact
remains that she acquired her protege's properties, through her
The Court of Appeals affirmed the judgment, adding that the minor brother-in-law. That she planned to get them for herself at the time
knew the particulars of, and approved the transaction, and that "only of selling them to Dr Ramos, may be deduced from the very short time
clear and positive evidence of fraud or bad faith, and not mere between the two sales (one week). The temptation which naturally
insinuations and inferences will overcome the presumptions that a sale besets a guardian so circumstanced, necessitates the annulment of
was concluded in all good faith for value". the transaction, even if no actual collusion is proved (so hard to
At first glance the resolutions of both courts accomplished substantial prove) between such guardian and the intermediate purchaser. This
justice: the minor recovers his properties. But if the conveyances are would uphold a sound principle of equity and justice.
annulled as prayed for, the minor will obtain a better deal: Tie receives However, the underlined portion was not intended to establish a
all the fruits of the lands from the year 1947 (Article 1303 Civil Code) general principle of law applicable to all subsequent litigations. It
and will return P14,700, not P15,000. merely meant that the subsequent purchase by Mactal could not be
To our minds the first two transactions herein described couldn't be in annulled in that particular case because there was no proof of a
a better juridical situation than if this guardian had purchased the previous agreement between Chioco and her. The court
seventeen parcels on the day following the sale to Dr. Ramos. Now, then considered such proof necessary to establish that the two sales
if she was willing to pay P15,000 why did. she sell the parcels for were actually part of one scheme guardian getting the ward's property
less? In one day (or actually one week) the price could not have risen through another person because two years had elapsed between the
so suddenly. Obviously when, seeking approval of the sale she sales. Such period of time was sufficient to dispel the natural
represented the price to be the best obtainable in the market, she was suspicion of the guardian's motives or actions. In the case at bar,
not entirely truthful. This is one phase to consider. however, only one week had elapsed. And if we were technical,
we could say, only one day had elapsed from the judicial approval
Again, supposing she knew the parcels were actually worth PI7,000; of the sale (August 12), to the purchase by the guardian (Aug. 13).
then she agreed to sell them to Pr. Ramos at P14,700; and knowing
the realty's value she offered him the next day P15,000 or Attempting to prove that the transaction was beneficial to the minor,
P15,500, and got it. Will there be1 any doubt that she was recreant appellee's attorney alleges that the money (P14,700) invested
to her guardianship, and that her acquisition should be nullified? Even in the house on Tindalo Street produced for him rentals of P2,400
without proof that she had connived with Dr. Ramos. Remembering yearly; whereas the parcels of land yielded to his step-mother only
the general doctrine that guardianship is a trust of the highest order, an average of PI,522 per year.[3] The argument would carry some
and the trustee cannot be allowed to have any inducement to neglect weight if that house had been built out of the purchase price of
his ward's interest and in line with the P14,700 only.[4] One thing is certain: the calculation doe3 not
include the price of the lot on which the house was Facts:
erected. Estimating such lot at P14,700 only, (ordinarily the city lot -Francisco Militante claimed that he owned a parcel of land
is more valuable than the building) the result is that the price located in Iloilo. He filed with the CFI of Iloilo an application
paid for the seventeen parcels gave the for the registration of title of the land. This was opposed by
minor an income of only PI ,200 a year, whereas the harvest the Director of Lands, the Director of Forestry, and other
from the seventeen parcels netted his step-mother a yearly profit oppositors. The case was docked as a land case, and after
of P1,522.00. The minor was thus on the losing end. trial the court dismissed the application for registration.
Militante appealed to the Court of Appeals.
Hence, from both the legal and equitable standpoints these three - Pending that appeal, he sold to Rubias (hisson-in-law and a
sales should not be sustained: the first two for violation of article lawyer) the land.
1459 of the Civil Code; and the third because Socorro Roldan could - The CA rendered a decision, dismissing the application for
pass no title to Emilio Cruz. The annulment carries with it (Article registration.
1303 Civil Code) the obligation of Socorro Roldan to return the 17 - Rubias filed a Forcible Entry and Detainer case against
parcels together with their fruits and the duty of the minor, through Batiller.
his guardian to repay P14,700 with legal interest. - In that case, the court held that Rubias has no cause of
DECISION: action because the property in dispute which Rubias allegedly
bought from Militante was the subject matter of a land case,
Judgment is therefore rendered: in which case Rubias was the counsel on record of Militante
himself. It thus falls under Article1491 of the Civil Code.
a. Annulling the three contracts of sale in question; (Hence, this appeal.)
b. declaring the minor as the owner of the seventeen
parcels of land, with the obligation to return to Socorro Issue: Whether the sale of the land is prohibited under
Roldan the price of P14,700 with legal interest from August Article 1491.
12, 1947;
c. Ordering Socorro Roldan and Emilio Cruz to deliver said Held: YES
parcels of land to the minor; d. Requiring Socorro Roldan to
pay him beginning with 1947 the fruits, which Article 1491 says that “The following persons cannot acquire
her attorney admits, amounted to P1,522 a year; e. any purchase, even at a public or judicial auction, either in
Authorizing the minor to deliver directly to Emilio Cruz, out of person or through the mediation of another…. (5) Justices,
the price of P14,700 above mentioned, the sum of judges,
P3,000; and A charging appellees with the costs. prosecuting attorneys, clerks of superior and inferior courts,
and other officers and employees connected with the
So ordered. administration of justice, the property and rights in litigation
or levied upon an execution before the court within whose
jurisdiction or territory they exercise their respective
1.) Lawyers functions; this prohibition includes the act of acquiring by
assignment and shall apply to lawyers with respect to the
Rubias vs Batiller
property and rights which may be the object of any litigation
in which they may take part by virtue of their
profession.” The present case clearly falls under this,
especially since the case was still pending appeal when the
sale was made.
2.) Judges

Issue: Legal effect of a sale falling under Article1491? Macariola vs. Asuncion

FACTS:
Held: NULL AND VOID.CANNOT BE RATIFIED.
On June 8, 1963, a decision was rendered by respondent Judge
Manresa considered such prohibited acquisitions (which fell Asuncion in Civil Case 3010 which became final for lack of an appeal.
under the Spanish Civil Code)as merely voidable because the One of the parties in that case was Macariola. On October 16, 1963,
Spanish Code did not recognize nullity. But our Civil Code does a project of partition was submitted to Judge Asuncion which he
recognize the approved in an Order dated October 23, 1963, later amended on
absolute nullity of contracts “whose cause, object or November 11, 1963.
purpose is contract to law, morals, good customs,
public order or public policy” or which are “expressly Lot 1184-E, which is one of the lots involved in the partition, was sold
prohibited or declared void by law” and declares such on July 31, 1964 to Dr. Arcadio Galapon. On March 6, 1965, Dr.
contracts “inexistent and void from the beginning.” The Arcadio Galapon and his wife Sold a portion of the said lot to Judge
nullity of such prohibited contracts is definite and permanent, Asuncion and his wife, Victoria S. Asuncion.
and cannot be cured by ratification. The public interest and
public policy remain paramount and do not permit of
compromise or ratification. In this aspect, the permanent In a verified complaint dated August 6, 1968 Bernardita R. Macariola
disqualification of public and judicial officers and lawyers charged respondent Judge Elias B. Asuncion of the Court of First
grounded on public policy differs from the first three cases of Instance of Leyte with "acts unbecoming a judge." The complainant
guardians agents and administrators(under Art 1491). As to alleged that that respondent Judge Asuncion violated Article 1491,
their transactions, it has been opined that they may be paragraph 5, of the New Civil Code in acquiring by purchase a portion
“ratified” by means of and of Lot No. 1184-E which was one of those properties involved in Civil
in “the form of a new contract, in which case its validity shall Case No. 3010 decided by him.
be determined only by the circumstances at the time of
execution of such new contract.” In those cases, the object Issue: Whether or not Judge Asuncion violated the said provision.
which was illegal at the time of the first contract may have
already become lawful at the time of the ratification or second HELD: The Court finds that there is no merit in the contention of
contract, or the intent, or the service which was impossible. complainant Bernardita R. Macariola. The prohibition in the aforesaid
The ratification or second contract would then be valid from Article applies only to the sale or assignment of the property which is
its execution; however, it does not retroact to the date of the the subject of litigation to the persons disqualified therein. For the
first contract. Decision affirmed. prohibition to operate, the sale or assignment of the property must
take place during the pendency of the litigation involving the property.  [ex. Dangerous drugs, land
acquired by homestead or free
When the respondent Judge purchased on March 6, 1965 a portion of patent – within 5 years from
Lot 1184-E, the decision in Civil Case No. 3010 which he rendered on issuance of patent or grant,
June 8, 1963 was already final because none of the parties therein except if sale in favor of the
filed an appeal within the reglementary period; hence, the lot in Gov’t or any of its units, brances
question was no longer subject of the litigation. or instiutions
 Outside the commerce of men
Moreover, at the time of the sale on March 6, 1965, respondent's order  [ property of public dominion
dated October 23, 1963 and the amended order dated November 11, such as a river (Martinez v. CA)]
1963 approving the October 16, 1963 project of partition made
pursuant to the June 8, 1963 decision, had long become final for there Article 1347. All things which are not outside the commerce of
was no appeal from said orders. men, including future things, may be the object of a contract. All
rights which are not intransmissible may also be the object of
Furthermore, respondent Judge did not buy the lot in question on contracts.
March 6, 1965 directly from the plaintiffs in Civil Case No. 3010 but
from Dr. Arcadio Galapon. No contract may be entered into upon future inheritance except
in cases expressly authorized by law.
Therefore, the respondent Associate Justice of the Court of Appeals is
hereby reminded to be more discreet in his private and business All services which are not contrary to law, morals, good customs,
activities In a verified complaint dated August 6, 1968 Bernardita R. public order or public policy may likewise be the object of a
Macariola charged respondent Judge Elias B. Asuncion of the Court of contract. (1271a)
First Instance of Leyte with "acts unbecoming a judge." The
complainant alleged that that respondent Judge Asuncion violated Article 1459. The thing must be licit and the vendor must have
Article 1491, paragraph 5, of the New Civil Code in acquiring by a right to transfer the ownership thereof at the time it is delivered.
purchase a portion of Lot No. 1184-E which was one of those (n)
properties involved in Civil Case No. 3010 decided by him.
Article 1575. The sale of animals suffering from contagious
diseases shall be void.
III. Subject Matter
A contract of sale of animals shall also be void if the use or service
Requisites of a valid Subject Matter (Licit, Determinate, for which they are acquired has been stated in the contract, and
Existing) they are found to be unfit therefor. (1494a)

1) Must be licit Article 1409. The following contracts are inexistent and void
- A thing is LICIT if it is NOT: from the beginning:
 Contrary to law, morals, good customs, (1) Those whose cause, object or purpose is contrary to law,
public order, or public policy morals, good customs, public order or public policy;
(2) Those which are absolutely simulated or fictitious; On April 17, 1925. Potenciano Garcia applied for the registration of
(3) Those whose cause or object did not exist at the time of the both parcels of land in his name, and the Court of First Instance of
transaction; Pampanga, sitting as land registration court, granted the registration.
(4) Those whose object is outside the commerce of men;
(5) Those which contemplate an impossible service; Thereafter, the ownership of these properties changed hands until
(6) Those where the intention of the parties relative to the eventually they were acquired by the spouses (Martinez).
principal object of the contract cannot be ascertained;
(7) Those expressly prohibited or declared void by law. To avoid any untoward incident, the disputants agreed to refer the
matter to the Committee on Rivers and Streams, which, after
These contracts cannot be ratified. Neither can the right to set conducting an ocular inspection, reported that the parcel was not a
up the defense of illegality be waived. public river but a private fishpond owned by the herein
spouses.

The Secretary of Public Works and Communications, ordered another


investigation of the said parcel of land, directing the spouses to
o Martinez v. Court of Appeals (G.R. No. L-31271, remove the dikes they had constructed, threatening that the dikes
29 April 1974, 56 SCRA 647) would be demolished should the spouses fail to comply therewith
within 30 days.
Facts:
Issue:
The spouses Romeo Martinez and Leonor Suarez are the Whether the spouses are purchasers for value and in good faith on
registered owners of two (2) parcels of land located in Lubao, the parcel alleged to be a public river.
Pampanga. Both parcels of land are fishponds. The disputed property
was originally owned by one Paulino Montemayor, who secured a Held:
"titulo real" over it way back in 1883. After the death of Paulino No, they are not.
Montemayor the said property passed to his successors-in-interest,
Maria Montemayor and Donata Montemayor, who in turn, sold There is no weight in the spouses' argument that, being a purchaser
it, as well as the first parcel, to a certain Potenciano Garcia. for value and in good faith of Lot No. 2, the nullification of its
registration would be contrary to the law and to the applicable
Because Potenciano Garcia was prevented by the then municipal decisions of the Supreme Court as it would destroy the stability of the
president of Lubao, Pedro Beltran, from restoring the dikes title which is the core of the system of registration. Appellants cannot
constructed on the contested property, Garcia filed a civil case with be deemed purchasers for value and in good faith as in the deed of
the Court of First Instance against Beltran to restrain the latter in his absolute conveyance executed in their favor.
official capacity from molesting him in the possession of said second
parcel, and on even date, applied for a writ of preliminary injunction, Before purchasing a parcel of land, it cannot be contended that the
which was issued against said municipal president. The Court declared spouses did not know exactly the condition of the land that they were
permanent the preliminary injunction. buying and the obstacles or restrictions thereon that may be put up
by the government in connection with their project of converting Lot
No. 2 in question into a fishpond. Nevertheless, they willfully and
voluntarily assumed the risks attendant to the sale of said lot. One Facts:
who buys something with knowledge of defect or lack of title Juliana Melliza owned 3 residential properties located in Iloilo City.
in his vendor cannot claim that he acquired it in good faith. These three parcels of land are known as Lots nos. 2, 5, and 1214.
She then donated lot no. 1214 to the municipality of Iloilo to serve as
site for the municipal hall. However, the donation was revoked since
The ruling that a purchaser of a registered property cannot go beyond the lot was inadequate to meet the requirements of the development
the record to make inquiries as to the legality of the title of the plan of the municipality. Lot 1214 was divided by Certeza Surveying
registered owner, but may rely on the registry to determine if there is Co., Inc. into lots 1214-A and 1214-B. Lot 1214-B was further divided
no lien or encumbrances over the same, cannot be availed of as into lots 1214-B-1, 1214-B-2 and 1214-B-3.
against the law and the accepted principle that rivers are parts of the
public domain for public use and not capable of private appropriation Melliza executed an instrument without a clear caption providing for
or acquisition by prescription. the absolute sale involving lot 5, lot 2, and a portion of lot 1214. On
January 14, 1938, Melizza sold her remaining interest in lot 1214 to
2) Must be determinate or determinable Remedios Sian Villanueva. On 24 August 1949 the City of Iloilo,
- A thing is DETERMINATE when it is: which succeeded to the Municipality of Iloilo, donated the city hall site
a) Particularly designated together with the building thereon, to the University of the Philippines
b) Physically segregated; or (Iloilo branch). The site donated consisted of Lot 1214-B, 1214-C, and
c) Capable of being made determinate 1214-D. Sometime in 1952, UP enclosed the site donated with a wire
without the necessity of a new or fence. Pio Sian Melliza thereupon made representation, through his
further agreement between the lawyer, with the city authorities for payment of the value of the lot (lot
parties (art. 1460) 1214-B). No recovery was obtained because as alleged by Pio Sian
 Ex: specific mention of some lots plus the Melliza, the city did not have any funds. Meanwhile, UP obtained
phrase “lots needed for the city hall site, Transfer Certificate of Title No. 7152 covering the three lots, 1214-B,
avenues and parks, according to the 1214-C, and 1214-D.
Arellano development plan of the
Municipality (Melliza v. City of Iloilo) On 10 December 1955, Pio Sian Melizza filed an action in the CFI Iloilo
against Iloilo City and the University of the Philippines for recovery of
Article 1460. A thing is determinate when it is particularly Lot 1214-B or of its value. After stipulation of facts and trial, the CFI
designated or physical segregated from all others of the same class. rendered its decision on 15 August 1957, dismissing the complaint.
Said court ruled that the instrument executed by Juliana Melliza in
The requisite that a thing be determinate is satisfied if at the time favor of Iloilo municipality included in the conveyance Lot 1214-B, and
the contract is entered into, the thing is capable of being made thus it held that Iloilo City had the right to donate Lot 1214-B to UP.
determinate without the necessity of a new or further agreement Pio Sian Melliza appealed to the Court of Appeals.
between the parties. (n)
On 19 May 1965, the CA affirmed the interpretation of the CFI that
o Melliza v. City of Iloilo (G.R. No. L-24732 30 April the portion of Lot 1214 sold by Juliana Melliza was not limited to the
1968, 23 SCRA 477) 10,788 square meters specifically mentioned but included whatever
was needed for the construction of avenues, parks and the city hall titles to the lots were obtained at once. However, it was discovered
site. Nonetheless, it ordered the remand of the case for reception of many years later that the title of Atilano I’s lot pertained to the lot
evidence to determine the area actually taken by Iloilo City for the sold to Atilano II, and the latter’s title conversely pertained to the lot
construction of avenues, parks and for city hall site. Hence, the appeal of Atilano I which had a much bigger area. Atilano II’s family sought
by Pio San Melliza to the Supreme Court. to obtain the land on the force of the title. The Court denied their
plea. It held that the families are in possession of the lots which the
The SC affirmed the decision appealed insofar as it affirms that of the contracting parties have intended. There was only a mistake with the
CFI, and dismissed the complaint, without costs. content of the instruments thus reformation may be sought;
however, this is no longer needed since the intent of the parties
have already been carried out. The parties must only convey to each
other a document reflecting the correct description of their lots.
Issue:
Whether or not the contract is fulfilled if object of sale is capable of DOCTRINE:
being made determinate at the time of the contract When one sells or buys real property, one sells or buys the property
as he sees it, in its actual setting and by its physical metes and
Held: boungs, and not by the mere lot number assigned to it in the
The requirement of the law that a sale must have for its object a certificate of title. Reformation can only be sought pending the
determinate thing, is fulfilled as long as, at the time the contract is enforcement of the contract but not when the intended consideration
entered into, the object of the sale is capable of being made or obligations have already been carried out.
determinate without the necessity of a new or further agreement
between the parties (Art. 1460, New Civil Code). The specific 1. In 1916, Eulogio Atilano I (Atilano 1) acquired by purchase from
mention of some of the lots plus the statement that the lots object of one Gerardo Villanueva lot No. 535.
the sale are the ones needed for city hall site; avenues and parks, 2. In 1920, Atilano I subdivided land he owned into five parcels,
according to the Arellano plan, sufficiently provides a basis, as of the identifying them as Lots 535-A to 535-E.
time of the execution of the contract, for rendering determinate said 3. He sold one parcel, designated as No. 535-E, to his brother
lots without the need of a new and further agreement of the parties. Eulogio Atilano II (Atilano 2) for P150. Lots 535-B, C and D
were sold to other people, while he kept the remaining portion
of land, presumably covered by title 535-A for himself, which
o Atilano v. Atilano (G.R. No. L-22487, 21 May passed to defendant Ladislao Atilano after Eulogio I passed
1969, 28 SCRA 231) away.
4. In 1952, after his wife died, Atilano 2 wanted to partition Lot
PETITIONER: Asuncion Atilano, Cristina Atilano, Rosario Atilano 535-A among himself and his children. They had the land
RESPONDENT: Ladislao Atilano and Gregorio Atilano resurveyed, only to find out their lot was actually 535-E, and
not 535-A, while the land that Ladislao had inherited from
SUMMARY: Atilano 1 was 535-A, and not 535-E. (The titles on their
Eulogio Atilano I bought a parcel land, subdivided it into 5 and built respective deeds of sale were mixed up.)
his house on one of the portions. He sold one portion to his brother, 5. Atilano 2 died, so his heirs instituted an action against Ladislao
Eulogio Atilano II upon which the latter also built his house. The offering up 535-A to Ladislao in exchange for 535-E, which they
alleged was what was written in their deed of sale (Since 535-E brothers was 535-A, even if the deed referred to it as 535-E,
had a bigger area than 535-A, 2,612 sqm compared to 1,808 which was a simple mistake in the drafting of the document.
sqm) The mistake did not vitiate the consent of the parties or affect
6. Ladislao’s defense was that the 1920 deed of sale to Atilano 2 the validity and binding effect of the contract between them.
was an involuntary error, and that the intention of the parties to 4. The proper remedy to such mistake is reformation of the
that sale (Atilano 1 and Atilano 2) meant to convey the lot instrument. This remedy is available when, there having been a
correctly identified as 535-A, even if the deed stated 535-E, on meeting of the funds of the parties to a contract, their true
the basis that Atilano 1 had built a house on this lot and had intention is not expressed in the instrument purporting to
even increased its area while it was in his possession by embody the agreement by reason of mistake, fraud, inequitable
purchasing a lot next to it, before it passed to Ladislao. conduct on accident (Art. 1359, et seq.) In this case, there is no
7. Ladislao then interposed a counterclaim that Atilano 2 execute need to reform the 1920 deed of sale since the parties retained
in his favor the corresponding deed of transfer with respect to possession their respective properties conformably to the real
535-E. intention of the parties to that sale, and all they should do is to
execute mutual deeds of conveyance.
ISSUE/S:
1.WON the heirs of Atilano 2 are entitled to the real 535-E,
as stated in his deed of sale - NO 3) Must be existing, future or contingent
- A thing is
RULING: o Actual when it is existing
Judgment is affirmed. The plaintiffs are ordered to execute a deed of o Possible when it is has a potential
conveyance of lot No. 535E in favor of the defendants, and the existence
latter, in turn, are ordered to execute a similar document, covering  Sale of “future goods” (goods to
lot No. 535A, in favor of the plaintiffs. be manufactured, raised, or
acquired by the seller after the
RATIO: perfection of sale): VALID
1. When one sells or buys real property — a piece of land, for  Sale of a mere hope or
example — one sells or buys the property as he sees it, in its expectancy: subject to the
actual setting and by its physical metes and bounds, and not by CONDITION that the thing will
the mere lot number assigned to it in the certificate of title. come into existence
2. In this case, the portion correctly referred to as lot No. 535-A  Sale of a vain hope or
was already in the possession of the Atilano 2, who had built a expectancy: VOID
house on it even before Atilano 1 had sold it to him. Atilano 1 o Future inheritance cannot be the object
had built a house for himself on the real 535-E, and both of sale (Art. 1347 (2)) but heir may sell
brothers had lived on their respective lands for years until the his hereditary rights (Art. 1088)
mistake was discovered in 1959. o Rules in case of loss at perfection
3. The real issue here is not adverse possession, but the real (Baviera: loss occurred before the
intention of the parties to that sale. From all the facts and contract was entered into without the
circumstances, the object of the sale between the Atilano knowledge of both parties)
FACTS: Alonzo was awarded by the Government a parcel of land in
Basilan City in accordance with RA 477. The award was cancelled by
Emptio rei speratae - a contract of sale of future things which the Board of Liquidators on January 27, 1965 on the ground that,
must be determinate or specific previous thereto, plaintiff was proved to have alienated the land to
- It won’t apply to things that are generic because another, in violation of law. In 1972, plaintiff's rights to the land
generic things are not lost under legal fiction were reinstated.
- Such a thing becomes enforceable when the
thing in question appears On August 14, 1968, Alonzo and his wife sold to Luis Pichel all the
- If it does not appear, the contract either is fruits of the coconut trees which may be harvested in the land in
extinguished when the time limit expires, or it question for the period, September 15, 1968 to January 1, 1976, in
becomes obvious the event would not happen consideration of P4,200.00. Even as of the date of sale, however, the
- The uncertainty is with regard to the quality and land was still under lease to Ramon Sua, and it was the agreement
quantity of the thing that part of the consideration of the sale, in the sum of P3,650.00,
was to be paid by Pichel directly to Ramon Sua so as to release the
Article 1461. Things having a potential existence may be the object land from the clutches of the latter.
of the contract of sale.
Pending said payment Alonzo refused to allow the Pichel to make
The efficacy of the sale of a mere hope or expectancy is deemed any harvest. Later, Pichel for the first time since the execution of the
subject to the condition that the thing will come into existence. The deed of sale in his favor, caused the harvest of the fruit of the
sale of a vain hope or expectancy is void. (n) coconut trees in the land.

Article 1347. All things which are not outside the commerce of Pichel filed for the annulment of the contract on the ground that it
men, including future things, may be the object of a contract. All violated the provisions of R.A. 477, which states that lands awarded
rights which are not intransmissible may also be the object of under the said law shall not be subject to encumbrance or alienation,
contracts. otherwise the awardee shall no longer be entitled to apply for
another piece of land. RTC ruled that although the agreement in
No contract may be entered into upon future inheritance except in question is denominated by the parties as a deed of sale of fruits of
cases expressly authorized by law. the coconut trees found in the vendor's land, it actually is, for all
legal intents and purposes, a contract of lease of the land itself
All services which are not contrary to law, morals, good customs,
public order or public policy may likewise be the object of a contract. ISSUE: 1. WON the subject matter of the sale is valid. (YES)
(1271a) 2. WON the sale of the coconut fruits violated RA 477. (NO)

o Pichel v. Alonzo, (G.R. No. L-36902, 30 January 1982, HELD:


111 SCRA 34)
1st issue: The Deed of Sale is precisely what it purports to be. It is a
document evidencing the agreement of herein parties for the sale of
coconut fruits of the lot, and not for the lease of the land itself as rights are distinct and separate from each other, the first pertaining
found by the lower Court. In clear and express terms, the document to the accessory or improvements (coconut trees) while the second,
defines the object of the contract thus: "the herein sale of the to the principal (the land). A transfer of the accessory or
coconut fruits are for an the fruits on the aforementioned parcel of improvement is not a transfer of the principal. It is the other way
land during the years ...(from) SEPTEMBER 15, 1968; up to around, the accessory follows the principal. Hence, the sale of the
JANUARY 1, 1976." 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.
Moreover, as petitioner correctly asserts, the document in question
expresses a valid contract of sale. It has the essential elements of a The grantee of a parcel of land under R.A. No. 477 is not prohibited
contract of sale as defined under Article 1485 of the New Civil Code from alienating or disposing of the natural and/or industrial fruits of
which provides thus: the land awarded to him. What the law expressly disallows is the
Art. 1458. By the contract of sale one of the contracting parties encumbrance or alienation of the land itself or any of the permanent
obligates himself to transfer the ownership of and to deliver a improvements thereon. While coconut trees are permanent
determinate thing, and the other to pay therefor a price certain in improvements of a land, their nuts are natural or industrial fruits
money or its equivalent.A contract of sale may be absolute or which are meant to be gathered or severed from the trees, to be
conditional. used, enjoyed, sold or otherwise disposed of by the owner of the
land. Herein respondents, as the grantee of Lot No. 21 from the
The subject matter of the contract of sale in question are the fruits Government, had the right and prerogative to sell the coconut fruits
of the coconut trees on the land during the years from September of the trees growing on the property.
15, 1968 up to January 1, 1976, which subject matter is a
determinate thing. Under Article 1461 of the New Civil Code, things Emptio spei – is the sale of a mere hope
having a potential existence may be the object of the contract of - The sale is effective even if the thing does not
sale. And in Sibal vs. Valdez, 50 Phil. 512, pending crops which have appear unless it is a vain hope
potential existence may be the subject matter of the sale. - The object is a present thing with is the hope or
expectancy and the uncertainity is with regard
According to Mechem, a valid sale may be made of a thing, which to its existence
though not yet actually in existence, is reasonably certain to come
into existence as the natural increment or usual incident of (Article 1461)
something already in existence, and then belonging to the vendor,
and the title will vest in the buyer the moment the thing comes into
existence.
EMPTIO REI SPERATAE EMPTIO SPEI
2nd issue: The contract was clearly a "sale of the coconut fruits." Sale of thing having Sale of mere hope or
The vendor sold, transferred and conveyed "by way of absolute sale, potential existence expectancy
all the coconut fruits of his land," thereby divesting himself of all
Uncertainty is w/ regard to Uncertainty is w/ regard to
ownership or dominion over the fruits during the seven- year period.
quantity & quality existence of thing
The possession and enjoyment of the coconut trees cannot be said
to be the possession and enjoyment of the land itself because these
Contract deals w/ present thing Article 1246. When the obligation consists in the delivery
Contract deals w/ future – hope of an indeterminate or generic thing, whose quality and
thing circumstances have not been stated, the creditor cannot
or expectancy demand a thing of superior quality. Neither can the debtor
deliver a thing of inferior quality. The purpose of the
Sale is valid even though
obligation and other circumstances shall be taken into
expected thing does not come
consideration. (1167a)
into existence as long as the
Sale is valid only if the
hope itself validly existed. (eg.
expected thing will exist. Article 1409 (6). The following contracts are inexistent
lotto)
and void from the beginning:

(6) Those where the intention of the parties relative to the


principal object of the contract cannot be ascertained;
Note: The presumption is Emptio Rei Speratae
o Yu Tek v. Gonzales (G.R. No. L-9935 01
February 1915, 29 Phil. 384

Subject to a resolutory condition – things acquired under a legal Doctrine:


or conventional right of redemption There is a perfected sale with regard to the “thing”
whenever the article of sale has been physically segregated
Article 1465. Things subject to a resolutory condition may be the from all other articles.
object of the contract of sale. (n)
Facts:
4) Quantity of subject matter not essential for Gonzalez received P3,000 from Yu Tek and Co. and in
perfection exchange, the former obligated himself to deliver 600 piculs
of sugar of the first and second grade, according to the
Article 1349. The object of every contract must be determinate as result of the polarization, within the period of three months.
to its kind. The fact that the quantity is not determinate shall not be It was also stipulated that in case Gonzales fails to deliver,
an obstacle to the existence of the contract, provided it is possible to the contract will be rescinded he will be obligated to return
determine the same, without the need of a new contract between the P3,000 received and also the sum of P1,200 by way of
the parties. (1273) indemnity for loss and damages.

Plaintiff proved that no sugar had been delivered to him


Particular Kinds under the contract nor had he been able to recover the
P3,000.
1) Generic things
Gonzales assumed that the contract was limited to the sugar
he might raise upon his own plantation; that the contract
represented a perfected sale; and that by failure of his crop The sale of a vain hope or expectancy is void. (n)
he was relieved from complying with his undertaking by loss
of the thing due. 3) Sale of undivided interest or share

Issue: Article 1463. The sole owner of a thing may sell an


Whether or not there was a perfected contract of sale undivided interest therein. (n)

Held: Article 1464. In the case of fungible goods, there may be a


No. This court has consistently held that there is a perfected sale of an undivided share of a specific mass, though the
sale with regard to the “thing” whenever the article of sale seller purports to sell and the buyer to buy a definite
has been physically segregated from all other articles. number, weight or measure of the goods in the mass, and
though the number, weight or measure of the goods in the
In the case at bar, the undertaking of the defendant was to mass, and though the number, weight or measure of the
sell to the plaintiff 600 piculs of sugar of the first and second goods in the mass is undetermined. By such a sale the buyer
classes. Was this an agreement upon the “thing” which was becomes owner in common of such a share of the mass as
the object of the contract? For the purpose of sale its bulk is the number, weight or measure bought bears to the
weighed, the customary unit of weight being denominated a number, weight or measure of the mass. If the mass
“picul.” Now, if called upon to designate the article sold, it is contains less than the number, weight or measure bought,
clear that the defendant could only say that it was “sugar.” the buyer becomes the owner of the whole mass and the
He could only use this generic name for the thing sold. There seller is bound to make good the deficiency from goods of
was no “appropriation” of any particular lot of sugar. Neither the same kind and quality, unless a contrary intent appears.
party could point to any specific quantity of sugar and say: (n)
“This is the article which was the subject of our contract.”
4) Sale of things in litigation
We conclude that the contract in the case at bar was merely
an executory agreement; a promise of sale and not a sale. Article 1381 (4). The following contracts are rescissible:
There was no perfected sale.
Those which refer to things under litigation if they have been
entered into by the defendant without the knowledge and
2) Future goods approval of the litigants or of competent judicial authority;

Article 1461. Things having a potential existence may be Article 1358 (2). The following must appear in a public
the object of the contract of sale. document:

The efficacy of the sale of a mere hope or expectancy is (2) The cession, repudiation or renunciation of hereditary
deemed subject to the condition that the thing will come into rights or of those of the conjugal partnership of gains
existence.
IV. OBLIGATION OF THE SELLER TO TRANSFER 1. Estoppel – Article 1434 - When a person who is not
OWNERSHIP the owner of a thing sells or alienates and delivers it,
and later the seller or grantor acquires title thereto, such
Sale by a person not the owner at the time of the title passes by operation of law to the buyer or grantee.
delivery
o Hernaez v. Hernaez (L-10027, 13 November
Article 1462 – The goods which form the subject of a 1915, 32 Phil. 214)
contract of sale may be either existing goods, owned or
possessed by the seller, or goods to be manufactured, Facts: Pedro Hernaez and Juana Espinosa died with undivided
raised, or acquired by the seller after the perfection of the estates. Their son, Domingo Hernaez sold his interest in both his
contract of sale, in this Title called “future goods.” parents’ estate to his son, Vicente Hernaez on November 6, 1901.
There may be a contract of sale of goods, whose acquisition Domingo also sold his interest in his mother’s estate to Alejandro
by the seller depends upon a contingency which may or may Montelibano; and Jose Uy-Cana (or P4,500) on February 27, 1907,
not happen. (n) with the connivance/knowledge of Vicente Hernaez, due to this,
Article 1505 – Subject to the provisions of this Title, where Vicente was estopped from asserting his title against the vendees.
goods are sold by a person who is not the owner thereof,
and who does not sell them under authority or with the Bigelow on Estoppel: …it is now a well-established principle that
consent of the owner, the buyer acquires no better title to where the true owner of property, for however short a time, holds
the goods than the seller had, unless the owner of the goods out another, or with knowledge of his own right, allows another to
is by his conduct precluded from denying the seller’s appear as the owner of or as having full power of disposition over
authority to sell. the property, the same being in the latter’s actual possession, and
Nothing in this Title, however, shall affect: innocent third parties are thus led into dealing with such apparent
(1) The provisions of any factors’ acts, recording laws, or owner, they will be protected.
any other provision of law enabling the apparent owner
of goods to dispose of them as if he were the true owner Jose Uy-Cana sold his interest to Alejandro Montelibano, holder and
thereof; owner of Domingo’s interest for P10,000.
(2) The validity of any contract of sale under statutory Rosendo Hernaez, co-heir, was notified of Alejandro’s purchases on
power of sale or under the order of a court of competent January 8, 1913, and purchased Vicente’s interests even though he
jurisdiction; knew the latter is estopped from asserting his title to the estates.
(3) Purchases made in a merchant’s store, or in fairs, or The rule is that Alejandro, as holder of a prior equitable right has
markets, in accordance with the Code of Commerce and priority over Rosendo, purchaser without value but not as against a
special laws. (n) subsequent purchaser for value and without notice.
Article 1459 – The thing must be licit and the vendor must Plaintiff Rosendo only has the right of subrogation allowed by
have a right to transfer the ownership thereof at the time it Article 1067 (If any of the heirs should sell his hereditary rights to
is delivered. (n) a stranger before the division, all or any of the co-heirs may
subrogate himself in the place of the purchaser, reimbursing him of
Exceptions: When ownership transfers by non-owner for the value of the purchase, within a month, counted from the time
they were informed) of the Civil Code. Alejandro has acquired the
estate of the deceased spouses. Issue: Whether or not HSBC acquired the quedans in good faith

Rosendo instituted an action on January 24, 1913, seeking to Held: The Supreme Court held that the quedans are now owned by
subrogate himself in the rights acquired by Alejandro. HSBC. Plaintiff voluntarily clothed Ranft with all the attributes of
ownership. Rule of Equitable Estoppel, where one of two innocent
Issue: Whether or not Rosendo is entitled to exercise his right of persons must suffer a loss he who by his conduct made the loss
subrogation (Art. 1067) possible must bear it.
There has been no fraud on part of the defendant HSBC. Siy Cong
Held: Yes, the trial court found that Rosendo was not chargeable Bien intrusted the certificates to Ranft, with every evidence of title
with notice prior to Jan. 8, 1913 and he was entitled to exercise his and transferability upon them. The principle of equitable estoppel
right of subrogation. But only upon payment to Alejandro of the places the loss upon him whose misplaced confidence made the
purchase price (P10,000). The Court modified the trial court’s wrong possible.
decision. Plaintiff has to pay P10,000, the original purchase price of
Jose Uy-Cana and not P4,500. o Jalbuena v. Lizarraga, (G.R. No. L-10599, 24
December 1915, 33 Phil. 77)
Facts: May 22, 1903, Lizarrage, as judgment creditor, caused the
o Siy Cong Bien v. HSBC (G.R. No. L-34655, 05 sherrif of Iloilo to levy upon an old sugar-mill owned by Ildefonso
March 1932, 56 Phil. 598) Doronila, judgment debtor and husband of plaintiff. Doronila stated
Facts: Otto Ranft called at the office of the herein plaintiff to to the sheriff that he owned the mill, which was sold at a public sale
purchase hemp (abaca), and he was offered the bales of hemp as to Lopez on July 1, 1913.
described in the quedans above mentioned. The parties agreed to Plaintiff Jalbuena filed an action on Nov. 26, 1913, to recover the mill
the aforesaid price, and on the same date the quedans, together stating that it was her exclusive property and not her husband’s. She
with the covering invoice, were sent to Ranft by the plaintiff, without knew that the mill would be sold as her husband’s property and
having been paid for the hemp, but the plaintiff's understanding was stood by and permitted the sale to go forward without making a
that the payment would be made against the same quedans, and it protest. The trial court held that she was estopped from asserting
appear that in previous transaction of the same kind between the her claim. Plaintiff argues that this was an error and cited upon the
bank and the plaintiff, quedans were paid one or two days after their doctrine of Waite vs. Peterson, where it was said that “a judgment
delivery to them. However, on the day the Quedan was supposed creditor would not be permitted to retain the purchase price of land
to be delivered, Ranft died. Thereupon, Siy discovered that Ranft sold as the property of a judgment debtor after it has been made to
delivered the quedans to HSBC to whom Ranft was indebted to. Sit appear that the debtor had no title to the land.”
then filed before the estate proceedings to collect the debt of Ranft
and filed an action against HSBC to demand for the recovery of Issue: Whether or not plaintiff may recover the mill
possession of the quedans. Held: No, the Waite vs. Peterson case is accurate but it has nothing
to do with estoppel. It has been held that when a person having title
Siy further argued that there was negligence in the part of HSBC to or an interest in property knowingly stands by and suffers it to be
because Ranft had not yet acquired ownership over the quedans at sold under judgment or decree, without asserting his title or making
the time of their indorsement to HSBC. it known to the bidders, he cannot afterward set up his claim.
(see Bigelow on Estoppel again above^) acquired a valid title even though his predecessors in interest did not
Section 333, No. 1 of the Code of Civil Procedure: Whenever a party have any right over it. The void title has ripened into a valid one.
has, by his own declaration, act, or omission, intentionally and Article 1505 protects innocent 3rd parties who have made purchases
deliberately led another to believe a particular thing true, he cannot at merchant’s store in good faith to give stability to business
in any litigation arising out of such declaration be permitted to falsify transactions. Co Kang Chui is now the owner because he bought it at
it. Plaintiff had full knowledge of the fact that the property was going a merchant’s store in good faith and for value.
to be sold to pay her husband’s debt. She did not communicate her
claim to the purchaser and it is now too late to assert such a claim. o Masiclat v. Centeno (G.R. No. L-8420, 31 May
1956, 99 Phil. 1043)
2. Recording Laws; Torrens System - Presidential
Decree No. 1529 (Property Registration Decree) Sale by a person having a voidable title
3. Statutory Sale – Order of Courts Article 1506 – Where the seller of goods has a voidable title
4. Sale in Merchant’s Store, Market or Fair thereto, but his title has not been voided at the time of the sale, the
o Sun Brothers & Co. v. Velasco (Court of Appeals buyer acquires a good title to the goods, provided he buys them in
Case No. 17085-R, 13 january 1958, 54-18 OG good faith, for value, and without notice of the seller’s defect of title.
5143, 11 August 1958) Article 559 - The possession of movable property acquired in good
Facts: Sun Brothers delivered to Lopez an Admiral refrigerator under faith is equivalent to a title. Nevertheless, one who has lost any
a “Conditional Sale Agreement”. P500/P1700 was paid as movable or has been unlawfully deprived thereof may recover it from
downpayment. They stipulated that Lopez shall not remove the the person in possession of the same.
fridge from his address without the express written consent of Sun If the possessor of a movable lost or which the owner has
Brothers. If so, they may rescind the sale, recover possession, and been unlawfully deprived, has acquired it in good faith at a public
the amounts paid shall be forfeited. The fridge shall remain their sale, the owner cannot obtain its return without reimbursing the
absolute property until Lopez has fully paid the price. price paid therefor.
o Tagatac v. Jimenez (Court of Appeals Case No.
Lopez, under fake name Jose Lim, sold it to JV Trading (Jose 13514-R, 22 February 1957, 53-12 OG 3792, 30
Velasco) without Sun’s knowledge for P850, with a document stating June 1957)
that he is the absolute owner. Velasco sold it to Co Kang Chui for Facts: Tagatac bought a car for $4,500 in the US, 7 months later
P985. she brought it to the PH. Her friend Joseph Lee was with one Warner
Feist who posed as a wealthy man. Feist offered to buy her car for
Issue: Whether or not Co Kang Chui, as an innocent buyer from a P15,000. The deed of sale was made, Feist paid by a postdated
store, has a better right than Sun Brothers, a conditional vendor check. The car was delivered to him.
Tagatac tried to encash the check, PNB refused and told her Feist
Held: Yes. Read Article 1505 (3). It is true that Lopez, conditional had no account in their bank. Tagatac notified the law enforcement
vendee, never had a title to the refrigerator because he has not fully of the estafa committed by Feist, he was not apprehended and the
paid the price as stipulated with Sun Brothers. SC did not agree with car disappeared.
the lower court in holding Velasco a purchaser in good faith. But Co Feist had the deed of sale notarized and sold the car to Sanchez who
Kang Chui, being an innocent purchaser in a merchant store, offered to sell the car to Liberato Jimenez for P10,000.
Tagatac filed a suit for the recovery of the car’s possession. The Defendant w/ her atty. Proceeded to Rebullida and showed the ring
sheriff obtained, seized and impounded the car but it was delivered in question, Mr. Rebullida said that it was the ring that plaintiff
back to Jimenez upon his filing of a counter-bond. The lower court bought from him in 1947. Defendant refused to deliver it to plaintiff
held that he had the right of ownership and possession. claiming that the ring was lost. Defendant showed that she
purchased her ring from Mrs. Miranda who got it from Angelita
Issue: (1) Whether or not Jimenez is a purchaser in good faith. (2) Hinahon who got it from Aling Petring, diamond ring was found to
WON Tagatac has been unlawfully deprived of her car weigh 2.57 carats. Plaintiff lost in the lower court.
Held: 1. Yes. The presumption that a person found in possession of
a thing taken in the doing of a recent wrongful act is the taker and CA decision in favor of Guevara: Mr. Rebullido’s testimony is entitled
the doer of the act does not apply in this case because the car was to great weight due to his 30 yrs experience in the jewelry business
not stolen. Jimenez possessed the car 2 months after Feist swindled and Mrs. Miranda as third-party defendant admitted that De Garcia
Tagatac and he did not have knowledge of any flaw in the title of the suggested that she would make alterations to the design to hide its
person from whom he acquired it. true identity (2.05 carats  2.57 carats). CA reversed lower court’s
2. Yes, but it does not fall under the scope of Article 599 (Civil decision and ordered De Garcia to return the ring or its value of
liability of a person who is criminally liable includes restitution of P1000 and atty’s fee of P1000, and P1000 exemplary.
thing even though it is with a third person who acquired it legally).
There was a valid transmission of ownership from the true owner Issue: Whether or not CA erred in ordering De Garcia to return the
[Tagatac] to the swindler [Feist] because they had a contract of sale, ring to Guevara by virtue of Article 559 of the Civil Code
it remained valid and binding. Held: No, CA correctly applied Article 559 which states that “one
Feist w/ a voidable title - Sanchez, acquired a Good Title, who has lost any movable or has been unlawfully deprived thereof
purchaser in good faith  Jimenez, purchaser in good faith, and for may recover it from the person in possession of the same”. Guevara
value. Voidable contract, once ratified is cleansed from all its defects was entitled to recover it from petitioner without reimbursement
(Article 1396) because the latter did not acquire it at a public sale.
GOOD TITLE = indefeasible title to the car even against original The common law principle that where one of two innocent persons
owner Tagatac. Between 2 innocent parties, the one whose acts who made the wrong possible due to misplaced confidence must
made the injury possible must shoulder the consequences. suffer the loss is NOT applicable in this case because the case is
covered by an express provision of the Civil Code. Provision >
o De Garcia v. Court of Appeals (G.R. No. L-20264, 30 Common Law.
January 1971, 37 SCRA 129)
Facts: The case is a petition for certiorari filed by De Garcia to o EDCA Publishing v. Sps. Santos (G.R. No. 80298, 26
review CA’s decision. SC said there is no basis for reversal. April 1990, 184 SCRA 614)
The case filed in the lower court: Facts: The case calls for the interpretation of Article 559 of the Civil
Private respondent Guevara, herein plaintiff, seeks recovery of her Code, or when a person may be deemed to have been “unlawfully
diamond (2.05 carats) ring with white gold mounting, bought on Oct. deprived” of movable property. The movable property in this case
27, 1947 from Rebullida Inc. She was at La Bulakena restaurant consists of books, bought from petitioner EDCA by an impostor who
owned by Consuelo De Garcia, when she recognized her ring in the sold it to the respondents Santos.
finger of Mrs. De Garcia and asked her where she bought it. She
explained that her ring was stolen from her house in Feb 1952.
October 5, 1981, Professor Jose Cruz placed an order via telephone buying the car. Teodoro was out and only his son, Irineo Santos
with EDCA for 406 books, payable on delivery. EDCA delivered them talked with De Dios. Teodoro instructed his son to see Marella at his
and Cruz issued a personal check of P8,995.65. Two days later, he house 1642 Crisostomo Street, Sampaloc, Manila who agreed to buy
sold 120 of the books to respondents, who after verifying Cruz’s the car for P14,700, saying that he would pay after the car had been
ownership from the invoice he showed her, paid him P1,700. registered to his name.
Teodoro, Irineo, and De Dios went to Atty. Padolina to execute the
EDCA became suspicious of Cruz’s second order and inquired with deed of sale in favor of Marella, the price has not yet been paid.
De La Salle College and found that Cruz, whose real name is Tomas Irineo and De Dios proceeded to Marella’s address where the latter
de la Pena, was not a dean there. EDCA went to the police and they said that he was short by P2000 for the payment and said they
arrested Cruz on October 7. The police of Precinct 5 seized the 120 should stop by his sister’s house to get it. Marella asked Irenio to
books from respondents without warrant. Respondents then sued for give to him the registration papers and the deed of sale, saying that
recovery of the books, after a writ of preliminary attachment was he would show them to his lawyer.
issued, petitioner finally surrendered the books to respondents. MTC, Irenio and De Dios went to his alleged sister’s house, and another
Trial Court, and CA denied petitioner’s request. unidentified companion stayed in the car. The former stayed in the
sala and De Dios went to a room and disappeared. Irenio then
Issue: Whether or not petitioner has been unlawfully deprived of rushed to Marella’s address but he was not there.
the books because the check issued by the impostor was dishonored Marella sold the car to plaintiff Aznar for P15,000 who acquired it in
good faith. Philippine Constabulary seized the car by reason of
Held: No, petitioners reason that since the payment check bounced, Teodoro Santos’ report that the car was unlawfully taken from him.
their sale with Cruz was nullified is untenable. Their contract of sale Aznar filed a complaint for replevin against Yapdiangco, the head of
was perfected, since they did not have a stipulation to the contrary, PH Constabulary. The lower court rendered the decision in favor of
the ownership is transferred to the vendee after delivery. The fact Teodoro, ruling that he had been unlawfully deprived of the car.
that Cruz has not yet paid EDCA was a matter between them and
does not impair the title acquired by respondents. Issue: Between Teodoro Santos and Jose Aznar, who has a better
Petitioner’s contention that respondents have not established right to the possession of the disputed car?
ownership because they have not produced a receipt is
unacceptable. Article 559 provides that “possession of movable Held: Teodoro Santos has a better right. Plaintiff-appellant Aznar,
property acquired in good faith is equivalent to a title.” contends that the applicable provision is Article 1506 and not 559.
The case should be against Tomas de la Pena and not respondents This contention is unmeritorious. Under 1506, it is essential that the
because they have already acquired a good title. EDCA must suffer seller should have a voidable title at least. In this case, the seller had
their own negligence. no title at all. Marella’s ownership was by virtue of the contract. He
would only acquire ownership/title after the car has been delivered
to him. Article 712: ownership is not transferred by contract but by
o Aznar v. Yapdiangco (G.R. No. L-18536, 31 March tradition or delivery.
1965, 13 SCRA 486)
Facts: In May 1959, Teodoro Santos advertised the sale of his The car was never delivered to the vendee by the vendor to
FORD Fairlane 500. On May 28, L. De Dios, claiming to be Marella’s consummate or complete the transfer of ownership by virtue of the
nephew, went to Santos’ residence to forward Marella’s interest in contract. Marella took possession by stealing it. There was no
evidence that Irenio voluntarily delivered the key to the unidentified
person who went with him and De Dios. The lower court was correct
in applying Article 559: if the owner lost a thing, or been unlawfully
deprived of it, he has a right to recover it not only from the finder,
thief, robber but also from third persons who may have acquired it
from such finder/thief/robber.

The only defense for 559 is if the third person acquired it at a public
sale. Aznar’s contention that since Santos misplaced his confidence
on Marella, he should be made to suffer the loss is not applicable.
Statutory provision > Common Law principle.