V.

PRICE

1. Co v. CA (GR. No. 123908, Feb 9, 1998)

FACTS: On September 3, 1976, Benito Ngo purchased from Nazario Gonzales, a parcel of land
known as Lots Nos. 7-A and 7-B, Psd-05-000239, with an area of 155 square meters, which
forms part of a bigger area covered by OCT No. RO-16, which Benito earlier acquired, situated
in Iriga City. On November 3, 1976, Antonio Ong, claiming to have purchased Lots Nos. 7-A and
7-B from Nazario Gonzales through his attorney-in-fact Rustica Gonzales Rivera, filed an action
against Benito Ngo with the then Court of First Instance of Camarines Sur for annulment of sale,
reconveyance and damages. On March 11, 1979 the Filipino-Chinese Chambers of Commerce of
Naga City and of Iriga City held a joint meeting to amicably settle certain controversies among
their members. However, only the dispute between Antonio Ong and Benito Ngo was taken up
in that meeting. A consensus was reached that the litigated area should be divided between
Ong and respondent Ngo so that Lot No. 7-A would go to Ong and Lot No. 7-B to Ngo. Antonio
Ong was not satisfied with the proposal as he claimed to have bought the whole property for
P60,000.00. Thereafter, on Apil 23, 1979 Antonio Ong and Benito Ngo assisted by their
respective counsel executed an amicable settlement which provided that Lot No. 7-A would
belong to Antonio Ong and Lot No. 7-B to Benito Ngo. The amicable settlement was submitted
to the trial court for approval. However, before the same could be approved, a complaint-in-
intervention was filed by petitioner Leon Co alleging that in the joint conference between the
Filipino-Chinese Chamber of Commerce of Naga City and the Filipino-Chinese Chamber of
Commerce of Iriga City it was agreed that Lot No. 7-B would go to him after paying respondent
Benito Ngo P49,500.00 for the lot. Respondent Ngo vehemently denied having entered into
such agreement, much less having received any amount therefor. Co claimed that he had made
payments (cash and checks) to Ngo of the purchase price of the property. Said checks were
returned by Ngo but refused by Co. Against the claim of Co, Ngo contends that the payment by
petitioner in his favor was not for the purchase price of the property but for another purpose,
i.e., for the liquidation of their 1978 accounts.

ISSUE: Whether or not there is a perfected contract of sale between Co and Ngo

RULING: In fine, the evidence of petitioner does not indicate a perfection of the purported
contract of sale which, under Art. 1458 of the Civil Code, is a contract by which "one of the
contracting parties obligates himself to transfer the ownership and to deliver a determinate
thing, and the other to pay therefor a price certain in money or its equivalent." Under Art. 1475
of the Code, "the contract of sale is perfected at the moment there is meeting of the minds
upon the thing which is the object of the contract and upon the price. From that moment the
parties may reciprocally demand performance subject to the provisions of the law governing
the form of contracts."

A definite agreement on the manner of payment of the price is an essential element in the
formation of a binding and enforceable contract of sale. 8 Petitioners testimonial and
documentary evidence did not establish any definitive agreement or meeting of the minds
between the parties concerning the price or term of payment. The contention of petitioner that
the agreement of sale between him and private respondent was forged during the arbitration
meeting of 11 March 1979 is contradicted by the Minutes of such meeting. Based thereon,
there was nothing whatsoever that transpired to indicate that the sale occurred between the
parties. The admission of petitioner himself that when he issued the checks amounting
to P19,500.00 in favor of respondent Benito Ngo, supposedly as partial payment of the
purchase price, the latter destroyed the checks, thereby negating the existence of the meeting
of the minds of the parties on the sale. The non-encashment of the checks by respondent Ngo is
indicative more of his non-acceptance of the offer of petitioner to buy the property. There was
also no showing that petitioner complied with the terms and conditions of the alleged sale,
including the payment of the alleged complete purchase price of P49,500.00 for the property.
 2. ISAAC BAGNAS v. CA, GR No. L-38498, 1989-08-10

FACTS: Hilario Mateum of Kawit, Cavite, died on March 11, 1964, single, without ascendants or
descendants, and survived only by collateral relatives, of whom petitioners herein, his first
cousins, were the nearest. Mateum left no will, no debts, and an estate consisting of twenty-
nine parcels of land in Kawit and Imus, Cavite, ten of which are involved in this appeal.

On April 3, 1964, the private respondents, themselves collateral relatives of Mateum though
more remote in degree than the petitioners, registered with the Registry of Deeds for the
Province of

Cavite two deeds of sale purportedly executed by Mateum in their (respondents') favor
covering ten parcels of land. Both deeds were in Tagalog, save for the English... descriptions of
the lands conveyed under one of them; and each recited the consideration of the sale to be
"*** halagang ISANG PISO (P1.00), salaping Pilipino, at mga naipaglingkod, ipinaglilingkod at...
ipaglilingkod sa aking kapakanan ***" ("the sum of ONE PESO (P1.00), Philippine Currency, and
services rendered, being rendered and to be rendered for my benefit"). On May 22, 1964 the
petitioners commenced suit against the respondents in the Court of First Instance of Cavite,
seeking annulment of the deeds of sale as fictitious, fraudulent or falsified, or, alternatively, as
donations... void for want of acceptance embodied in a public instrument. The petitioners
prayed for... recovery of ownership and possession of said lands, accounting of the fruits
thereof and damages.

In answer to the complaint, the defendants (respondents here) denied the alleged fictitious or
fraudulent character of the sales in their favor, asserting that said sales were made for good
and valuable consideration; that while "*** they may have the effect of... donations, yet the
formalities and solemnities of donation are not required for their validity and effectivity, ***;"
that defendants were collateral relatives of Hilario Mateum and had done many good things for
him, nursing him in his last... illness, which services constituted the bulk of the consideration of
the sales; and (by way of affirmative defense) that the plaintiffs could not question or seek
annulment of the sales because they were mere collateral relatives of the deceased vendor and
were not bound,... principally or subsidiarily, thereby.

ISSUES: Whether, in view of the fact that, for properties assuredly worth in actual value many
times over their total assessed valuation of more than P10,000.00, the questioned deeds of sale
each state a price of only one peso (P1.00) plus unspecified past, present and future services to
which no value is assigned, said deeds were void or inexistent from the beginning ("nulo") or
merely voidable, that is, valid until annulled.

RULING: If they were only voidable, then it is a correct proposition that since the vendor
Mateum had no forced heirs whose legitimes may have been impaired, and the petitioners, his
collateral relatives, not being bound either principally or subsidiarily to the terms of said deeds,
the latter had and have no actionable right to question those transfers.
On the other hand, if said deeds were void ab initio because to all intents and purposes without
consideration, then a different legal situation arises, and quite another result obtains, as
pointed out by the eminent civil law authority, Mr. Justice J.B.L. Reyes

If therefore the contract has no causa or consideration, or the causa is false and fictitious (and
no true hidden causa is proved) the property allegedly conveyed never really leaves the
patrimony of the transferor, and upon the latter's death without a testament, such property
would pass to the transferor's heirs intestate and be recoverable by them or by the
Administrator of the transferor's estate. Armentia only ruled that transfers made by a decedent
in his lifetime, which are... voidable for having been fraudulently made or obtained, cannot be
posthumously impugned by collateral relatives succeeding to his estate who are not principally
or subsidiarily bound by such transfers.

upon the consideration alone that the apparent gross, not to say enormous, disproportion
between the stipulated price (in each deed) of P1.00... plus unspecified and unquantified
services and the undisputedly valuable real estate allegedly sold -- worth at least P10,500.00
going only by assessments for tax purposes which, it is well-known, are notoriously low
indicators of actual... value -- plainly and unquestionably demonstrates that they state a false
and fictitious consideration, and no other true and lawful cause having been shown, the Court
finds both said deeds, insofar as they purport... to be sales, not merely voidable, but void ab
initio.

The transfers in question being void, it follows as a necessary consequence and conformably to
the concurring opinion in Armentia, with which the Court fully agrees, that the properties
purportedly conveyed remained part of the estate of

Hilario Mateum, said transfers notwithstanding, recoverable by his intestate heirs, the
petitioners herein, whose status as such is not challenged.

The onus, therefore, of showing the existence... of valid and licit consideration for the
questioned conveyances rested on the private respondents. But even on a contrary
assumption, and positing that the petitioners initially had the burden of showing that the
transfers lacked such... consideration as they alleged in their complaint, that burden was shifted
to the private respondents when the petitioners presented the deeds which they claimed
showed that defect on their face and it became the duty of said respondents to offer evidence
of existent, lawful... consideration.

The questioned transfers are declared void and of no force or effect.

 3. SPOUSES BUENAVENTURA AND CONSOLACIONI JOAQUIN VS CA, GR No. 126376,
2003-11-20

FACTS: Spouses Leonardo Joaquin and Feliciana Landrito are the parents of plaintiffs
Consolacion, Nora, Emma and Natividad as well as of defendants Fidel, Tomas, Artemio, Clarita,
Felicitas, Fe, and Gavino, all surnamed JOAQUIN. The married Joaquin children are joined in this
action by their respective spouses. Sought to be declared null and void ab initio are certain
deeds of sale of real property executed by defendant parents Leonardo Joaquin and Feliciana
Landrito in favor of their co-defendant children and the corresponding certificates of title issued
in their names.
Defendants, on the other hand aver (1) that plaintiffs do not have a cause of action against
them as well as the requisite standing and interest to assail their titles over the properties
in litis; (2) that the sales were with sufficient considerations and made by defendants parents
voluntarily, in good faith, and with full knowledge of the consequences of their deeds of sale;
and (3) that the certificates of title were issued with sufficient factual and legal basis.
The trial court ruled in favor of the defendants and dismissed the complaint. The trial court
stated that the testimony of the defendants, particularly that of the father will show that the
Deeds of Sale were all executed for valuable consideration. This assertion must prevail over the
negative allegation of plaintiffs. The argument that plaintiffs do not have a valid cause of action
against defendants since there can be no legitime to speak of prior to the death of their parents
is found by the court tenable. In determining the legitime, the value of the property left at the
death of the testator shall be considered (Art. 908 of the New Civil Code). Hence, the legitime of
a compulsory heir is computed as of the time of the death of the decedent. Plaintiffs therefore
cannot claim an impairment of their legitime while their parents live. The Court of Appeals
affirmed the decision of the trial court.

ISSUE: Whether the Deeds of Sale are void for lack of consideration and Whether the Deeds of
Sale are void for lack of consideration.

RULING:
Whether the Deeds of Sale are void for lack of consideration
Petitioners assert that their respondent siblings did not actually pay the prices stated in the
Deeds of Sale to their respondent father. Thus, petitioners ask the court to declare the Deeds of
Sale void. A contract of sale is not a real contract, but a consensual contract. As a consensual
contract, a contract of sale becomes a binding and valid contract upon the meeting of the
minds as to price. If there is a meeting of the minds of the parties as to the price, the contract
of sale is valid, despite the manner of payment, or even the breach of that manner of payment.
If the real price is not stated in the contract, then the contract of sale is valid but subject to
reformation. If there is no meeting of the minds of the parties as to the price, because the price
stipulated in the contract is simulated, then the contract is void. Article 1471 of the Civil Code
states that if the price in a contract of sale is simulated, the sale is void.
It is not the act of payment of price that determines the validity of a contract of sale. Payment
of the price has nothing to do with the perfection of the contract. Payment of the price goes
into the performance of the contract. Failure to pay the consideration is different from lack of
consideration. The former results in a right to demand the fulfilment or cancellation of the
obligation under an existing valid contract while the latter prevents the existence of a valid
contract.
Petitioners failed to show that the prices in the Deeds of Sale were absolutely simulated. The
trial court did not find the allegation of absolute simulation of price credible. Petitioners’ failure
to prove absolute simulation of price is magnified by their lack of knowledge of their
respondent siblings’ financial capacity to buy the questioned lots. On the other hand, the Deeds
of Sale which petitioners presented as evidence plainly showed the cost of each lot sold. Not
only did respondents’ minds meet as to the purchase price, but the real price was also stated in
the Deeds of Sale. As of the filing of the complaint, respondent siblings have also fully paid the
price to their respondent father.

Whether the Deeds of Sale are void for gross inadequacy of price
Petitioners ask that assuming that there is consideration, the same is grossly inadequate as to
invalidate the Deeds of Sale.
Articles 1355 of the Civil Code states:
Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall not
invalidate a contract, unless there has been fraud, mistake or undue influence.
(Emphasis supplied)
Article 1470 of the Civil Code further provides:
Art. 1470. Gross inadequacy of price does not affect a contract of sale, except as may
indicate a defect in the consent, or that the parties really intended a donation or some
other act or contract. (
Petitioners failed to prove any of the instances mentioned in Articles 1355 and 1470 of the Civil
Code which would invalidate, or even affect, the Deeds of Sale. Indeed, there is no requirement
that the price be equal to the exact value of the subject matter of sale. All the respondents
believed that they received the commutative value of what they gave. In the instant case, the
trial court found that the lots were sold for a valid consideration, and that the defendant
children actually paid the purchase price stipulated in their respective Deeds of Sale. Actual
payment of the purchase price by the buyer to the seller is a factual finding that is now
conclusive upon us.
 4. YU BUN GUAN v. ELVIRA ONG, GR No. 144735, 2001-10-18

FACTS: Elvira Ong and Yu Bun Guan are husband and wife. They lived together until she and
her children were abandoned by Yu Bun Guan.

Elvira Ong purchased out of her personal funds, a parcel of land. Also during their marriage,
they purchased, out of their conjugal funds, registered in their names. Before their separation
in 1992, she reluctantly agreed' to the Yu Bun Guan importuning that she execute a Deed of
Sale of the J.P. Rizal property in his favor, but on the promise that he would construct a
commercial building for the benefit of the children. He suggested that the J.P. Rizal property
should be in his name alone so that she would not be involved in any obligation.

The consideration for the `simulated sale' was that, after its execution in which he would
represent himself as single, a Deed of Absolute Sale would be executed in favor of the three (3)
children and that he would pay the Allied Bank, Inc. the loan he obtained. Elvira Ong executed a
Deed of Absolute Sale but then he did not pay the consideration of P200,000.00, supposedly
the `ostensible' valuable consideration. On the contrary, she paid for the capital gains tax and
all the other assessments even amounting to not less than P60,000.00, out of her personal
funds.

"Because of the sale, a new title (TCT No. 181033) was issued in his name, but to `insure' that
he would comply with his commitment, she did not deliver the owner's copy of the title to him.
"Because of the refusal of [petitioner] to perform his promise, and also because he insisted on
delivering to him the owner's copy of the title [to] the JP Rizal property, in addition to threats
and physical violence, she decided executing an Affidavit of Adverse Claim. "Also to avoid
burdening the JP Rizal property with an additional loan amount, she wrote the Allied Bank, Inc...
withdrawing her authority for [petitioner] to apply for additional loans.

Yu Bun Guan on the other hand, filed with the RTC, Makati a `Petition for Replacement' of an
owner's duplicate title. "Attached to the Petition was the Affidavit of Loss... in which he falsely
made it appear that the owner's copy of the title was lost or misplaced, and that was granted
by the court in an Order "Upon discovery of the `fraudulent steps' taken by the [petitioner],
[respondent] immediately executed an Affidavit of Adverse Claim on November 29, 1993. "She
precisely asked the court that the sale of the JP Rizal property be declared as null and void; for
the title to be cancelled; payment of actual, moral and exemplary damages; and attorney's fees
"It was, on the other hand, the version of Yu Bun Guan.

Because he was not a Filipino, he utilized Elvira Ong as his `dummy' and agreed to have the sale
executed in the name of Elvira Ong, although the consideration was his own and from his
personal funds. "When he finally acquired a Filipino citizenship in 1972, he purchased another
property being referred to as the `Juno lot' out of his own funds a Deed of Sale was then
executed
Believing in good faith that his owner's copy of the title was lost and not knowing that the same
was surreptitiously `concealed' by [respondent], he filed in 1993 a petition for replacement of
the owner's copy of the title, in court.

Yu Bun Guan added that [respondent] could not have purchased the property because she had
no financial capacity to do so; the RTC found that the JP Rizal property was the paraphernal
property of respondent, because (1) the title had been issued in her name; (2) petitioner had
categorically admitted that the property was in her name; (3) petitioner was estopped from
claiming otherwise. The trial court further held that the in pari delicto rule found in Articles
1411 and 1412 of the Civil Code was not applicable to the present case, because it would apply
only to existing contracts with an illegal cause or object, not to simulated or fictitious
contracts... or to those that were inexistent due to lack of an essential requisite such as cause
or consideration.

ISSUE: Whether or not the Court of Appeals likewise palpably erred in declaring the sale of the
subject property to herein petitioner in 1992 to be fictitious, simulated and inexistent.

RULING: A simulated deed of sale has no legal effect, and the transfer certificate of title issued
in consequence thereof should be cancelled. Pari delicto does not apply to simulated sales.

The Petition is devoid of merit.

Next, petitioner argues that there was a valid sale between the parties, and that the
consideration consisted of his promise to construct a commercial building for the benefit of
their three children and to pay the loan he had obtained from Allied Bank.

We disagree.

In the present case, it is clear from the factual findings of both lower courts that the Deed of
Sale was completely simulated and, hence, void and without effect. No portion of the P200,000
consideration stated in the Deed was ever paid. And, from the facts of the case, it is clear that
neither party had any intention whatsoever to pay that amount. Instead, the Deed of Sale was
executed merely to facilitate the transfer of the property to petitioner pursuant to an
agreement between the parties to enable him to construct a commercial building and to sell
the Juno property to their children. Being merely a subterfuge, that agreement cannot be
taken as the consideration for the sale. The principle of in pari delicto provides that when two
parties are equally at fault, the law leaves them as they are and denies recovery by either one
of them. However, this principle does not apply with respect to inexistent and void contracts
"The principle of in pari delicto non oritur actio denies all recovery to the guilty parties inter se.
It applies to cases where the nullity arises from the illegality of the consideration or the purpose
of the contract. When two persons are equally at fault, the law does not relieve them. The
exception to this general rule is when the principle is invoked with respect to inexistent
contracts."
 5. G.R. No. 132305 December 4, 2001LABAGALA vs. SANTIAGO
FACTS: Jose T. Santiago owned a parcel of land in Manila. However, his sisters sued him for
recovery of2/3 share of the land alleging that he had fraudulently registered it in his name. The
trial courtdecided in favor of his sisters. Jose died intestate. His sisters then filed a complaint
before the RTC for recovery of the 1/3portion of said property which was in the possession of
Ida C. Labagala (who claimed to be IdaC. Santiago, the daughter of Jose).The trial court ruled in
favor of Labagala. According to the trial court, the said deed constitutes avalid donation. Even if
it were not, petitioner would still be entitled to Jose's 1/3 portion of theproperty as Jose's
daughter.When appealed, the Court of Appeals (CA) reversed the decision of the trial court. It
took intoaccount that Ida was born of different parents, as indicated her birth certificate.

ISSUES: (1) Whether or not respondents may impugn petitioner's filiation in this action for
recovery of title andpossession; (2) Whether or not petitioner is entitled to Jose's 1/3 portion of
the property he co-owned withrespondents, through succession, sale, or donation.

HELD: The Court AFFIRMED the decision of the CA.On Issue No. 1Yes.Article 263 refers to an
action to impugn the legitimacy of a child, to assert and prove that aperson is not a man's child
by his wife. However, the present respondents are asserting notmerely that petitioner is not a
legitimate child of Jose, but that she is not a child of Jose at all.
 6. VELASCO v. CA 51 SCRA 439, June 29, 1973
FACTS: Petitioner: On November 29, 1962 parties entered into contract of sale of land for
P100,000. The payment terms would be a down payment of P10,000 and 20,000 and the
P70,000 is payable in installment. Petitioner then paid the P10,000 down payment on
November 29, 1962. On January 8, 1964 he paid the remaining 20,000 but the respondent
refused to accept and execute a deed of sale.

Respondent: No contract of sale was perfected because the minds of the parties did not meet.
The property was leased by Socorro Velasco and the defendant indicated willingness in selling
the property for 100,000 under the terms of P30,000 down payment, 20,000 of which to be
paid on November 30, 1962 and the remaining 70,000 is payable in 10 years with 9% interest
per annum. On November 29, 1962 Socorro paid 10,000, short of the alleged 20,000 agreed
down payment. However, said payment was accepted. On January 8, 1964 Socorro tendered
the 20,000 down payment but defendant refused to accept because the latter considered the
contract rescinded on the account the former’s failure to complete the down payment on or
before December 31, 1962.

ISSUE: WON a contracted sale was perfected between the parties.

HELD: No. The minds of the parties did not meet “in regard to the manner of payment.” It is not
difficult to glean from the aforequoted averments that the petitioners themselves admit that
they and the respondent still had to meet and agree on how and when the down-payment and
the installment payments were to be paid. Such being the situation, it cannot, therefore, be
said that a definite and firm sales agreement between the parties had been perfected over the
lot in question. Indeed, this Court has already ruled before that a definite agreement on the
manner of payment of the purchase price is an essential element in the formation of a binding
and enforceable contract of sale.3 The fact, therefore, that the petitioners delivered to the
respondent the sum of P10,000 as part of the down-payment that they had to pay cannot be
considered as sufficient proof of the perfection of any purchase and sale agreement between
the parties herein under article 1482 of the new Civil Code, as the petitioners themselves admit
that some essential matter — the terms of payment — still had to be mutually covenanted.

7. CATINDIG v. VDA. DE MENESES

FACTS: The late Rosendo Meneses, Sr. owns a parcel of land situated in Malolos, Bulacan, with
an area of 49,139 square meters under Transfer Certificate of Title (TCT) No. T-1749
(hereinafter referred to as the Masusuwi Fishpond). Aurora Irene C. Vda. De Meneses,
respondent, is the surviving spouse of the registered owner. She was issued Letters of
Administration over the estate of her late husband. On May 17, 1995, respondent filed a
Complaint for Recovery of Possession, Sum of Money and Damages against petitioners Manuel
Catindig and Silvino Roxas, Sr. before the Regional Trial Court of Malolos, Bulacan, to recover
possession over the Masusuwi Fishpond.
Respondent alleged that in September 1975, petitioner Catindig, the first cousin of her
husband, deprived her of her possession over the Masusuwi Fishpond, through fraud, undue
influence and intimidation. Since then, petitioner Catindig unlawfully leased the property to
petitioner Roxas. Respondent verbally demanded that petitioners vacate the said property, but
all were futile, thus, forcing respondent to send demand letters to petitioners Roxas and
Catindig. However, petitioners ignored the demand letters that led the respondent to file a suit
against the petitioners to recover the property and demanded payment of unearned income,
damages, attorney's fees and costs of suit. In his answer, petitioner Catindig stated that in
January 1978, he bought the Masusuwi Fishpond from respondent and her children, as
evidenced by a Deed of Absolute Sale. Catindig further argued that even assuming that
respondent was indeed divested of her possession of the Masusuwi Fishpond by fraud, her
cause of action had already prescribed considering the lapse of about twenty (20) years from
1975, which was allegedly the year when she was fraudulently deprived of her possession over
the said property.
On the other hand, petitioner Roxas asserted in his own answer that respondent has no cause
of action against him, since Catindig is the lawful owner of the Masusuwi Fishpond, to whom he
had paid his rentals in advance until the year 2001. The Trial Court ruled in favor of Meneses.
Petitioners' then challenged the Trial Court's decision before the Court of Appeals. Petitioner
Catindig insisted that he holds a valid Deed of Sale, thus, ownership belongs to him. Petitioner
Roxas argued that he, relying on that Deed of Sale, is a lessee in good faith.
After the trial, the Regional Trial Court rendered its judgment and ruled in favor of the
respondent. It was found out that the Deed of Sale executed between respondent and
petitioner Catindig was simulated and fictitious so it did not convey title over the Masusuwi
Fishpond to Catindig. The Deed of Absolute Sale also lacked consideration, because respondent
and her children never received the stipulated purchase price for the said property which was
pegged at P150,000.00. Since ownership over the property has never been transferred to
Catindig, the trial court declared that he has no right to lease it to Roxas. The petitioners
separately challenged the trial court's decision before the Court of Appeals. The appellate court
dismissed the appeals of both petitioners because according to the Court of Appeals, the trial
court properly rejected petitioners' reliance on the Deed of Absolute Sale between respondent
and petitioner Catindig.

ISSUE:  Whether or not Catindig's claim that the Deed of Sale was genuine.
RULING: The trial court found that the Deed of Sale was simulated and fictitious and has no
consideration.  
On its face, the Deed of Absolute Sale:
Is not complete and is not in due form. It is a 3-page document but with several items left
unfilled or left blank, like the day the document was supposed to be entered into, the tax
account numbers of the persons appearing as signatories to the document and the names of
the witnesses. In other words, it was not witnessed by any one. More importantly, it was not
notarized. While the name Ramon E. Rodrigo, appeared typed in the Acknowledgement, it was
not signed by him.
The questioned deed was supposedly executed in January 1978. Petitioner Catinidig testified
that his brother Francisco Catindig was with him when respondent signed the document. The
evidence, however, shows that Francisco Catindig died on January 1, 1978 as certified to by the
Office of Municipal Civil Registrar of Malolos, Bulacan and the Parish Priest of Sta. Maria
Assumpta Parish, Bulacan.
The document mentions 49,130 square meters, as the area sold by respondent and her two
children to petitioner Catindig. But this is the entire area of the property as appearing in the
title and they are not the only owners. The other owner is Rosendo Meneses, Jr, stepson of
herein respondent, whose name does not appear in the document. The declaration of Catindig
that Rosendo Meneses, Jr. likewise sold his share of the property to him in another document
does not inspire rational belief. This other document was not presented in evidence and
Rosendo Meneses, Jr., did not testify, if only to corroborate Catindig's claim.
The Court also finds compelling reason to depart from the court a quo's finding that respondent
never received the consideration stipulated in the simulated deed of sale, thus:
The title to this property is still in the name of Rosendo Meneses, Sr., and the owner's duplicate
copy of the title is still in the possession of Meneses. If
Catindig was really a legitimate buyer of the property who paid the consideration with good
money, why then did he not register the document of sale or had it annotated at the back of
the title, or better still, why then did he not have the title in the name of Rosendo Meneses, Sr.
canceled so that a new title can be  issued in his name? Equally telling is Catindig's failure to pay
the real estate taxes for the property from 1978 up to the present.
It is a well-entrenched rule that where the deed of sale states that the purchase price has been
paid but in fact has never been paid, the deed of sale is null and void ab initio for lack of
consideration. Moreover, Article 1471 of the Civil Code, provides that if the price is simulated,
the sale is void, which applies to the instant case, since the price purportedly paid as indicated
in the contract of sale was simulated for no payment was actually made.
Since it was well established that the Deed of Sale is simulated and therefore void, petitioners'
claim the respondent's cause of action is one for annulment or contract, which already
prescribed, is unavailing, because only voidable contracts may be annulled. On the other hand,
respondent's defense for the declaration of the inexistence of the contract does not prescribe.
In Pascual v. Coronel, the Court held that as against the registered owners and the holder of an
unregistered deed of sale, is the former who has better right to possess. Likewise, in the recent
case of Umpoc v. Mercado, the Court declared that the trial court did not err in giving more
probative weight to the TCT in the name of the decedent vis-a-vis the contested unregistered
Deed of Sale. Further, it a fundamental principle in land registration that the certificate of title
serves as evidence of an indefeasible and incontrovertible title of the property in favor of the
person whose name appears therein. It is conclusive evidence with respect to the ownership of
the land described therein. Moreover, the age-old rule is that the person who has a Torrens
title over a land is entitled to possession thereof.
Petitioner Roxas is not regarded as a lessee in good faith because of his reliance to an
unregistered and unnotarized Deed of Sale.

The petition in G.R. No. 165851 is denied. The Decision of the Court of Appeals dated October
22, 2004, which affirmed the decision of the Regional Trail Court of Malolos, Bulacan is
affirmed.

8. LOURDES ONG LIMSON vs. COURT OF APPEALS, SPOUSES LORENZO DE VERA and
ASUNCION SANTOS-DE VERA, TOMAS CUENCA, JR. and SUNVAR REALTY
DEVELOPMENT CORPORATION
G.R. No. 135929 (April 20, 2001)
FACTS: Petitioner Lourdes Ong Limson alleged that in July 1978 respondent spouses Lorenzo de
Vera and Asuncion Santos-de Vera, through their agent Marcosa Sanchez, offered to sell to
petitioner a parcel of land consisting of 48, 260 square meters, more or less, situated in Barrio
San Dionisio, Parañaque, Metro Manila; that respondent spouses informed her that they were
the owners of the subject property; that on 31 July 1978 she agreed to buy the property at the
price of P34.00 per square meter and gave the sum of P20,000.00 to respondent spouses as
"earnest money;" that respondent spouses signed a receipt therefor and gave her a 10-day
option period to purchase the property; that respondent Lorenzo de Vera then informed her
that the subject property was mortgaged to Emilio Ramos and Isidro Ramos; that respondent
Lorenzo de Vera asked her to pay the balance of the purchase price to enable him and his wife
to settle their obligation with the Ramoses.
Petitioner also averred that she agreed to meet respondent spouses and the Ramoses on 5
August 1978 at the Office of the Registry of deeds of Makati, Metro Manila, to consummate the
transaction but due to the failure of respondent Asuncion Santos-de Vera and the Ramoses to
appear, no transaction was formalized. In a second meeting scheduled on 11 August 1978 she
claimed that she was willing and ready to pay the balance of the purchase price but the
transaction again did not materialize as respondent spouses failed to pay the back taxes of
subject property. Subsequently, on 23 August 1978 petitioner allegedly gave respondent
Lorenzo de Vera three (3) checks in the total amount of P36, 170.00 for the settlement of the
back taxes of the property and for the payment of the quitclaims of the three (3) tenants of
subject land. The amount was purportedly considered part of purchase price and respondent
Lorenzo de Vera signed the receipts therefor.
Petitioner alleged that on 5 September 1978 she was surprised to learn from the agent of
respondent spouses that the property was the subject of a negotiation for the sale to
respondent Sunvar Realty Development Corporation (SUNVAR) represented by respondent
Tomas Cuenca, Jr. On 15 September 1978 petitioner discovered that although respondent
spouses purchased the property from the Ramoses on 20 March 1970 it was only on 15
September 1978 that TCT No. S-72946 covering the property was issued to respondent spouses.
On the other hand, respondents SUNVAR and Cuenca, alleged that petitioner was not the
proper party in interest and/or had no cause of action against them. But, even assuming that
petitioner was the proper party in interest, they claimed that she could only be entitled to the
return of any amount received by respondent spouses. In the alternative, they argued that
petitioner had lost her option to buy the property for failure to comply with the terms and
conditions of the agreement as embodied in the receipt issued therefor.
ISSUE: Whether or not there was a perfected contract to sell between petitioner and
respondent spouses.
RULING: A scrutiny of the facts as well as the evidence of the parties overwhelmingly leads to
the conclusion that the agreement between the parties was a contract of option and not a
contract to sell. An option, as used in the law of sales, is a continuing offer or contract by which
the owner sitpulates with another that the latter shall have the right to buy the property at a
fixed price within a time certain, or under, or in compliance with, certain terms and conditions,
or which gives to the owner of the property the right to sell or demand a sale. It is also
sometimes called an "unaccepted offer." An option is not itself a purchase, but merely secures
the privilege to buy. It is not a sale of property but a sale of right to purchase. It is simply a
contract by which the owner of property agrees with another person that he shall have the
right to buy his property at a fixed price within a certain time. He does not sell his land; he does
not then agree to sell it; but he does not sell something, i.e., the right or privilege to buy at the
election or option of the other party. Its distinguishing characteristic is that it imposes no
binding obligation on the person holding the option, aside from the consideration for the offer.
Until acceptance, it is not, properly speaking, a contract, and does not vest, transfer, or agree to
transfer, any title to, or any interest or right in the subject matter, but is merely a contract by
which the owner of the property gives the optionee the right or privilege of accepting the offer
and buying the property on certain terms.
The consideration of P20,000.00 paid by petitioner to respondent spouses was referred to as
"earnest money." However, a careful examination of the words used indicated that the money
is not earnest money but option money. "Earnest money" and "option money" are not the
same but distinguished thus; (a) earnest money is part of the purchase price, while option
money is the money given as a distinct consideration for an option contract; (b) earnest money
given only where there is already a sale, while option money applies to a sale not yet perfected;
and, (c) when earnest money is given, the buyer is bound to pay the balance, while when the
would-be buyer gives option money, he is not required to buy, but may even forfeit it
depending on the terms of the option. There is nothing in the Receipt which indicates that the
P20,000.00 was part of the purchase price. Moreover, it was not shown that there was a
perfected sale between the parties where earnest money was given.
Doubtless, the agreement between respondent spouses and petitioner was an "option
contract" or what is sometimes called an "unaccepted offer." During the option period the
agreement was not converted into a bilateral promise to sell and to buy where both
respondent spouses and petitioner were then reciprocally bound to comply with their
respective undertakings as petitioner did not timely, affirmatively and clearly accept the offer of
respondent spouses. On 11 August 1978 the option period expired and the exclusive right of
petitioner to buy the property of respondent spouses ceased. The subsequent meetings and
negotiations, specifically on 11 and 23 August 1978, between the parties only showed the
desire of respondent spouses to sell their property to petitioner. Also, on 14 September 1978
when respondent spouses sent a telegram to petitioner demanding full payment of the
purchase price on even date simply demonstrated an inclination to give her preference to buy
subject property. Collectively, these instances did not indicate that petitioner still had the
exclusive right to purchase subject property. Verily, the commencement of negotiations
between respondent spouses and respondent SUNVAR clearly manifested that their offer to sell
subject property to petitioner was no longer exclusive to her.
 9. SAN MIGUEL PROPERTIES PHILS., INC. v SPOUSES ALFREDO and GRACE HUANG, G. R.
No. 137290, 31 July 2000

FACTS: San Miguel Properties offered two parcels of land for sale and the offer was made to
an agent of the respondents. An “earnest-deposit” of P1 million was offered by the respondents
and was accepted by the petitioner’s authorized officer subject to certain terms. Petitioner,
through its executive officer, wrote the respondent’s lawyer that because the parties failed to
agree on the terms and conditions of the sale despite the extension granted by the petitioner,
the latter was returning the “earnest-deposit”.
The respondents demanded execution of a deed of sale covering the properties and attempted
to return the “earnest-deposit” but petitioner refused on the ground that the option to
purchase had already expired. A complaint for specific performance was filed against the
petitioner and the latter filed a motion to dismiss the complaint because the alleged “exclusive
option” of the respondents lacked a consideration separate and distinct from the purchase
price and was thus unenforceable; the complaint did not allege a cause of action because there
was no “meeting of the mind” between the parties and therefore the contact of sale was not
perfected.
The trial court granted the petitioner’s motion and dismissed the action. The respondents filed
a motion for reconsideration but were denied by the trial court. The respondents elevated the
matter to the Court of Appeals and the latter reversed the decision of the trial court and held
that a valid contract of sale had been complied with. Petitioner filed a motion for
reconsideration but was denied.

ISSUE: Whether or not there was a perfected contract of sale between the parties

RULING: The decision of the appellate court was reversed and the respondents’ complaint was
dismissed. It is not the giving of earnest money, but the proof of the concurrence of all the
essential elements of the contract of sale which establishes the existence of a perfected sale.
The P1 million “earnest-deposit” could not have been given as earnest money because at the
time when petitioner accepted the terms of respondents’ offer, their contract had not yet been
perfected. This is evident from the following conditions attached by respondents to their letter.
The first condition for an option period of 30 days sufficiently shows that a sale was never
perfected. As petitioner correctly points out, acceptance of this condition did not give rise to a
perfected sale but merely to an option or an accepted unilateral promise on the part of
respondents to buy the subject properties within 30 days from the date of acceptance of the
offer. Such option giving respondents the exclusive right to buy the properties within the period
agreed upon is separate and distinct from the contract of sale which the parties may enter. All
that respondents had was just the option to buy the properties which privilege was not,
however, exercised by them because there was a failure to agree on the terms of payment. No
contract of sale may thus be enforced by respondents.
Even the option secured by respondents from petitioner was fatally defective. Under the
second paragraph of Art. 1479, an accepted unilateral promise to buy or sell a determinate
thing for a price certain is binding upon the promisor only if the promise is supported by a
distinct consideration. Consideration in an option contract may be anything of value, unlike in
sale where it must be the price certain in money or its equivalent. There is no showing here of
any consideration for the option. Lacking any proof of such consideration, the option is
unenforceable. Equally compelling as proof of the absence of a perfected sale is the second
condition that, during the option period, the parties would negotiate the terms and conditions
of the purchase. The stages of a contract of sale are as follows: (1) negotiation, covering the
period from the time the prospective contracting parties indicate interest in the contract to the
time the contract is perfected; (2) perfection, which takes place upon the concurrence of the
essential elements of the sale which are the meeting of the minds of the parties as to the object
of the contract and upon the price; and (3) consummation, which begins when the parties
perform their respective undertakings under the contract of sale, culminating in the
extinguishment thereof. In the present case, the parties never got past the negotiation stage.
The alleged “indubitable evidence” of a perfected sale cited by the appellate court was nothing
more than offers and counter-offers which did not amount to any final arrangement containing
the essential elements of a contract of sale. While the parties already agreed on the real
properties which were the objects of the sale and on the purchase price, the fact remains that
they failed to arrive at mutually acceptable terms of payment, despite the 45-day extension
given by petitioner.