CAGAYAN STATE UNIVERSITY

College of Law
SALES
ST
1 Semester, SY 2020-2021
Professor: Atty. Romeo Guillermo

Student Name: GABILO, CHRISTIAN JAY C.

Student ID No: 18-01690

1. Mr. Xi, a chinese national, has been staying in the Davao City for 4 years already.
Because of the good relationship of China and the Philippines at the present, Mr. Xi,
decided to live permanently in the Philippines. Mr. Xi then bought for a very
reasonable price the land which had long been offered to him by Mr. D, the mayor of
Davao City. Was the sale valid? Explain.

No. The subject matter of the sale is illicit per accidens, hence, an invalid
sale.

The law, as provided under Art. 1459 of the Civil Code, requires that the
subject matter of a sale be licit or lawful, that is, it should not be contrary to law
morals, good customs, public order, or public policy. Relatively, Art. XII, Section
7 of the constitution essentially prohibits the transfer or conveyance of private
land to alien, except in cases of hereditary succession.

In the instant case, it is noted that the sale in question involves the transfer of
land to Mr. Xi who is apparently of chinese national. Hence, the sale is void, it
being violative of the constitutional prohibition against the transfer of lands to
alien.

2. S, sold his Amscor .45 (he previously bought from X for 30 thousand) to B, for 5
thousand pesos only. Was the sale valid? Explain

Yes. The sale is valid there being the presence of the essential elements of
a valid contract of sale, to wit: (a) consent, (b) subject matter, and (price).
Correspondingly, the discrepancy of the consideration in herein sale vis-à-vis
the subject’s original purchase price does not necessarily invalidate the sale.

As provided under Article 1470 of the Civil Code, gross inadequacy of price
does not affect a contract of sale, except as it may indicate a defect in the
consent, or that the parties really intended a donation or some other act or
contract. As such, the fact that the subject matter of the sale was sold in a
relatively low consideration compared to its original purchase price does not
affect the validity of the contract of sale, provided that the valuable
consideration was in fact agreed upon and there is every intention of the
parties to pay and receive such price.
3. S, owns a parcel of land that is mortgaged to PNB. Later, S and B, entered into an
agreement captioned as Conditional Sale of a Registered Land with the following
provisions: (1) the price of the sale is 100 thousand (2) upon signing of the
agreement, B shall pay S 50 thousand (3) B shall assume the balance in the loan of
S to PNB in the amount of 20 thousand (4) the balance of 30 thousand will be paid
on November 30, 2020, after which, S shall execute an absolute contract of sale.
Was the sale between S and B absolute or conditional? Explain

The sale was an absolute sale notwithstanding the fact that the parties
captioned the same as conditional sale.

As held in the case of Dignos v. Court of Appeals (G.R. No. L-59266), a deed
of sale is absolute in nature although denominated as a "Deed of Conditional
Sale" where nowhere in the contract in question is a proviso or stipulation to
the effect that title to the property sold is reserved in the vendor until full
payment of the purchase price, nor is there a stipulation giving the vendor the
right to unilaterally rescind the contract the moment the vendee fails to pay
within a fixed period.

Hence, in the instant case, there being no stipulation to the effect that the title
to the property is reserved in the vendor pending the full payment of the same;
the sale shall be deemed as absolute.

4. B, offered to buy the land of S for 3 million. S agreed. B paid 200k in cash and issued
a check for the amount of 2.8 million and assured S that the check will be funded.
When the check was dishonored upon presentment, S filed an action for annulment
of sale because his consent to the sale was allegedly vitiated because of B’s promise
that the check payment will be properly funded. Was the action of S correct? Explain.

No. The action for annulment filed by S will not prosper on the ground that
the fraud existing in the case is merely an incidental inducement to the
making of the contract; the proper action must be to rescind the contract
pursuant to Art. 1191 of the Civil Code.

While it is true that Art. 1318 of the Civil Code requires the attendance of
consent as one of the essential requisites of a valid contract of sale, and that
the existence of fraud invalidates the same, Article 1338 of the Civil Code
provides that fraud is only existent when through insidious words or
machinations of one of the contracting parties, the other is induced to enter into
a contract which without them, he would not have agreed to. In order that
fraud may vitiate consent, it must be the causal (dolo causante), not
merely the incidental (dolo incidente), inducement to the making of the
contract. Additionally, the fraud must be serious. In the case at bar, there is
no causal fraud to justify the annulment of the case. Even before B issued the
check, the parties had already consented and agreed to the sale transaction;
the assurance that the check will be funded is therefore not the primary
 inducement for S to agree to the sale. Certainly, there was a meeting of minds
as to the object of the sale as well as the consideration therefor.

It is to be noted however, that while no causal fraud attended the execution of

the sales of contract, there is fraud in its general sense which involves a false
representation of fact (Tiongson v. Napala, G.R. No. 167874). Evidently, while
S already performed his obligation as a seller, B failed to perform his obligation
to pay when he failed to pay the remaining balance. Hence, while S cannot
move for the annulment of the sale there being no causal fraud, the substantial
breach of B of his obligation entitles S the right to rescind the contract.

5. S was issued on February 14, 2020 a Free Patent over a parcel of agricultural land
(4has.) which he and his predessors-in-interest have possessed and occupied since
1975. Because of the present pandemic, he is now in need for money. S sold the half
portion of the land to B for 2million. Was there a perfected sale between S & B? Was
the sale valid, voidable or rescissible? Explain.

Yes, there was a perfected and valid sale between S and B.

As provided for under Article 1318 of the Civil Code, a contract of sale is
perfected by mere meeting of the minds between the parties. Correspondingly,
a contract of sale is deemed valid present the following essential requisites, to
wit: (a) consent, (b) subject matter, and (c) consideration. In the instant case, it
is evident that all the essential requisites are existent.

Furthermore, while it is true that the Public Land Act established restrictions
that prohibit land owners to sell and mortgage the land within the first five years
of the patent grant, these restrictions have already been eased by virtue of R.A
11231, otherwise known as the Agricultural Free Patent Reform Act. Hence,
agricultural free patent shall now be considered as title in fee simple and shall
not be subject to any restriction on encumbrances or alienation.

6. Is it necessary that the seller be the owner of the thing sold at the time of the sale
(when the contract of sale is perfected)? Explain.

No. A contact of sale, it be a consensual contract, is perfected by mere

consent.

Under the Civil Code, perfection per se does not transfer ownership which
occurs upon the actual delivery of the thing sold. Correspondingly,
ownership by the seller of the thing sold is not an element for its perfection.
It is sufficient that the seller has the right to transfer the ownership thereof
at the time it is delivered.