Sales Cases Digest

7/14/2019 Sales Cases Digest

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1) Calimlim-Canullas v. Fortun, G.R. No. L-57499, June 22, 1984

Facts:

Petitioner was married to Fernando and lived in a house built on a land owned by the

latter’s father. When his father died, Fernando inherited the land. Subsequently,Fernando abandoned his family and began living with private respondent Daguines. Hethen sold the land with the house to Daguines. Unable to take possession, Daguinesfiled a complaint for quieting of title and damages against petitioner. The trial courtinitially found in favor of Daguines but upon MR, declared the petitioner the owner andthe sale void.

Issue:

Is the sale of the house and lot to Daguines valid?

Ruling:

No, the sale is not valid.

The sale is null and void for being contrary to morals and public policy. Contracts whosecause or purpose is contrary to law, morals, good customs, public order and publicpolicy are void and inexistent from the very beginning.

The law emphatically prohibits spouses from selling property to each other subject tocertain exceptions. This is so because if transfers or conveyances between spouses areallowed during marriage, that would destroy the system of conjugal partnership, a basic

policy in civil law. It was also designed to prevent the exercise of undue influence byone spouse over the other, as well as to protect the institution of marriage, which is thecornerstone of family law. These prohibitions apply to a couple living as husband andwife without the benefit of marriage.

2) Rubias v. Batiller, G.R. No. L-35702, May 29, 1973

Facts:

Plaintiff-appellant Rubias bought from his father-in-law, Francisco Militante, the subjectland while he is handling the case of Militante before the Court of Appeals involving thepetition for registration of the same land. Plaintiff then instituted an action againstRubias for the recovery of ownership and possession of the land which was dismissedby both the trial court and the CA in view of the earlier decision of the CA.

Issue:

Is the sale of the land by Militante to Rubias valid?



Ruling:

No, the sale is not valid.

The purchase by a lawyer of the property in litigation from his client is categorically

prohibited by Article 1491, par. 5 of the Civil Code and that consequently, plaintiff’spurchase of the property in litigation from his client was void and could produce no legaleffect. This contract cannot be ratified.

The nullity of such prohibited contracts is definite and permanent and cannot be curedby ratification. The public interest and public policy remain paramount and do not permitof compromise or ratification.

3) Yu Tek and Co v. Gonzales, G.R. No. L-9935, Feb. 1, 1915

Facts:

Yu Tek and Co and Gonzales entered into a written contract whereby in considerationof P3,000, the latter will deliver 600 piculs of sugar to the former. No sugar wasdelivered and Yu Tek was also not able to recover the amount paid. Gonzales reasonedthat their real agreement was that he will secure the sugar from his crop which he raisedfrom his plantation and that due to the total failure of his crop, his obligation to deliver the sugar was likewise extinguished because of the loss of the thing due.

Issue:

Was there a perfected contract of sale?

Ruling:

No, there is no perfected contract of sale. The contract in this case is merely anexecutory contract, a promise of sale and not a sale.

If called upon to designate the article sold, the defendant could only say sugar. Therewas no appropriation of any particular lot of sugar. Neither party could point to anyspecific quantity of sugar. The sale having not been perfected, the risk is still with theseller, hence the buyer may recover the amount paid.

4) National Grains Authority v. Intermediate Appellate Court, G.R. No. 74470, Mar.4, 1989

Facts:

Private respondent Leon Soriano offered to sell palay grains to NFA. For this purpose,he submitted all the necessary to documents to qualify as a seller. His documents were



processed and was given a quota of 2,640 cavans. He then delivered 630 cavans toNFA. When he demanded payment, he was informed that it was withheld pendinginvestigation that he is not a bonafide farmer. He was then informed that NFA cannotaccept the palay grains because he is not a bonafide farmer. Instead of withdrawing hispalay, he filed a case for specific performance/collection of money. RTC favored him

and upon appeal, the IAC affirmed the trial court’s decision. Hence, this petition.Petitioners contend that the delivery of 630 cavans was merely to offer it for sale. Sinceit did not go through the procurement process of NFA (rebagging) there was noacceptance of offer.

Issue:

Was there a perfected contract of sale?

Ruling:

Yes, there was a perfected contract of sale.

When NFA accepted the respondent’s offer by giving it a quota of 2,640 cavans, therewas already a meeting of minds between the parties. The object of the contract, beingthe palay grains produced in Soriano’s farmland and the NFA was to pay the samedepending upon its quality. The fact that the exact number of cavans of palay to bedelivered has not been determined does not affect the perfection of the contract. Article1349 of the New Civil Code provides: ". . .. The fact that the quantity is not determinateshall not be an obstacle to the existence of the contract, provided it is possible todetermine the same, without the need of a new contract between the parties." In thiscase, there was no need for NFA and Soriano to enter into a new contract to determine

the exact number of cavans to be sold. Soriano can deliver so much of his produce aslong as it does not exceed 2,640 cavans.

5) Nool v. Court of Appeals, G.R. No. 116635, July 4, 1997

Facts:

Appellant Conchita Nool mortgaged her two parcels of land with DBP. Failing to pay theloan, the mortgaged was subsequently foreclosed, with DBP as the buyer of the land.

Appellee Anacleto Nool negotiated with DBP and bought the same. By virtue of suchsale, titles were issued in the name of appellee. Appellant claims that she merely soughtthe help of appelle to redeem the land from DBP and as evidenced by their writtenagreement contained in Exhibit “C”, she sold the land to appellant. And as evidenced byExhibit “D” she was to repurchase the property when she later on has the money.

Appellee refused to return the land, hence this case. Both the trial court and the CAruled in favor of the appellee hence this petition.

Issue:



a) Can the appellant sell the land to the appellee?b) Can she enforce the contract of repurchase?

Ruling:

a) No, the appellant cannot validly sell the land to the appellee.

It is clear that at the time of the sale, the sellers no longer had any title to the land. Appellee has already acquired the property from DBP at the time of the sale. Hence, thesale was inoperative. Art. 1459 of the Civil Code provides that “the vendor must have aright to transfer ownership thereof at the time it is delivered. Here, appellant cannotdeliver the property anymore since it is already in the possession of the appelle havingbought it from DBP.

A person can only sell what he owns or what he is authorized to sell; the buyer can as aconsequence acquire no more than what the seller can legally transfer. No one can give

what he does not have – Nemo dat quod non habet.

b) No, the contract of repurchase is void and unenforceable.

A contract of repurchase arising out of a contract of sale where the seller did not haveany title to the property "sold" is not valid. Since nothing was sold, then there is alsonothing to repurchase.

Furthermore, assuming arguendo that Exhibit “D” is a separate and distinct agreement,it becomes a unilateral promise to sell which must be supported by a considerationdistinct from the price. Here, there was no proof that the agreement to repurchase was

supported by any consideration.

6) Diego v. Diego, G.R. No. 179965, Feb. 20, 2013

Facts:

Petitioner Nicolas Diego and his brother Rodolfo entered into an oral contract to sellpetitioner’s share, fixed at P500,000.00, over the family’s Diego building. Rodolfo paidP250,000 as downpayment and it was agreed that a deed of sale will be executed uponpayment of the balance. Rodolfo failed to pay the balance.

Meanwhile, respondent Eduardo, another sibling of the petitioner, failed to remit to himhis share over the rental income of the building. Instead, he gave it to Rodolfo.Petitioner then filed a complaint with the trial court for the accounting of the rents and itsremittance to him. Respondents claim that petitioner had no more share over the rents,having sold his share over the building to Rodolfo. Trial court dismissed the complaintand ordered the petitioner to execute the deed of sale in favor of Rodolfo. In doing so,the RTC held that the contract of sale was already perfected as early as 1993 whenpartial payment was made and from then on, petitioner ceased to be a co-owner and is



no longer entitled to the fruits of the building. Upon appeal, CA affirmed the trial court,holding that the only remaining right of the petitioner is to demand payment of thebalance of the purchase price. Hence, this petition.

Issue:

Is the agreement between the brothers a contract of sale or a contract to sell?

Ruling:

The contract entered into by Nicolas and Rodolfo was a contract to sell.

The stipulation to execute a deed of sale upon full payment of the purchase price is aunique and distinguishing characteristic of a contract to sell. It also shows that thevendor reserved title to the property until full payment.

A stipulation in the contract, "[w]here the vendor promises to execute a deed of absolute sale upon the completion by the vendee of the payment of theprice," indicates that the parties entered into a contract to sell.

Jurisprudence has established that where the seller promises to execute a deedof absolute sale upon the completion by the buyer of the payment of the price,the contract is only a contract to sell.

The absence of a formal deed of conveyance is a strong indication that the parties didnot intend immediate transfer of ownership, but only a transfer after full payment of thepurchase price.

The need to execute a deed of absolute sale upon completion of payment of theprice generally indicates that it is a contract to sell, as it implies the reservation of title in the vendor until the vendee has completed the payment of the price.

5) Pichel v. Alonzo, G.R. No. L-36902, Jan. 30, 1982

Facts:

Respondent Alonzo was awarded by the government a piece of land in accordance withRA 477. The award was cancelled in 1965 on the ground that it was alienated toanother contrary to law. In 1972, Alonzo’s rights were reinstated. In 1968, Alonzo andhis wife sold to Pichel the fruits of the coconuts which may be harvested in the land from1968-1976 fo P4,200. Pichel started harvesting on 1972. Alonzo filed a complaint toannul the sale for non-payment of the price. The trial court rendered judgment holdingthat the agreement was really a contract of lease on the land and that the sale is nulland void.

Issue:



Is the agreement a lease or a sale?

Ruling:

The agreement is a contract of sale.

It has all the essential elements of a sale. The subject matter of the contract of sale inquestion are the fruits of the coconut trees on the land during the years from September 15, 1968 up to January 1, 1976, which subject matter is a determinate thing. Under

Article 1461 of the New Civil Code, things having a potential existence may be theobject of the contract of sale. And in Sibal vs. Valdez , 50 Phil. 512, pending crops whichhave potential existence may be the subject matter of the sale. Here, the SupremeCourt, citing Mechem on Sales and American cases said which have potential existencemay be the subject matter of sale. Here, the Supreme Court, citing Mechem on Sales

and American cases said:

Mr. Mechem says that a valid sale may be made of a thing, which though not yet actuallyin existence, is reasonably certain to come into existence as the natural increment or usual incident of something already in existence, and then belonging to the vendor, andthe title will vest in the buyer the moment the thing comes into existence. (Emerson vs.European Railway Co., 67 Me., 387; Cutting vs. Packers Exchange, 21 Am. St. Rep. 63)Things of this nature are said to have a potential existence. A man may sell property of which he is potentially and not actually possess. He may make a valid sale of the winethat a vineyard is expected to produce; or the grain a field may grow in a given time; or the milk a cow may yield during the coming year; or the wool that shall thereafter growupon sheep; or what may be taken at the next case of a fisherman's net; or fruits to grow;or young animals not yet in existence; or the goodwill of a trade and the like. The thing

sold, however, must be specific and Identified. They must be also owned at the time bythe vendor. (Hull vs. Hull 48 Conn. 250 (40 Am. Rep., 165) (pp. 522-523).

6) EDCA v. Santos, G.R. No. 80298, April 26, 1990

Facts:

A person passing himself as Professor Jose Cruz placed an order by telephone for 406books payable on delivery. EDCA delivered the books as ordered for which Cruz issueda check. Cruz then sold 120 books to the respondents. Sensing that something isamiss, EDCA investigated Cruz and found out that he was an impostor. An entrapment

ensued and it was found out that he sold the books to the respondents. EDCA forcedtheir way to the respondent’s bookstore and seized the books without a warrant.Respondents sued to recover the books and obtained a favorable decision from MTC toCA.

Issue:

Was EDCA unlawfully deprived of the books?



Ruling:

No.

Ownership has already passed to Cruz when the books were delivered. The fact thatthe check bounced does not erase the fact that the sale has already been perfected.

The respondents, having obtained the books in good faith, may not be deprived of thesame.

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Sales Cases Digest