Law on SALES
Syllabus
St. Mary’s College
College of Law
Atty. Alfie Luzana Omega
I. INTRODUCTION
A. DEFINITION OF SALE (Art. 1458) -
Polytechnic University of the Philippines v. CA, 368
S 691 (2001).
1. Elements of Contract of Sale -
Sanchez v. Mapalad Realty Corp, 541 SCRA 397
2. Stages of Contract of Sale
Jovan Land v. CA, 268 S 160 (1997)
3. Characteristic of Sale
Lao v. CA, G.R. No. 115307, July 8, 1997;
Londres v. CA,394 S 133 (2002);
Spouses Buenaventura v. Court of Appeals, G.R. No.
126376, November 2003
B.SUBJECT MATTER OF SALE (Arts. 1459 to 1465)
A. MUST BE EXISTING, FUTURE OR CONTIGENT (Arts. 1347,
1348 and 1462)
1. The thing must be capable of existence
a. Emptio Rei Speratae (1461 and 1347)
b. Emptio Spei (1461)
c. Subject to resolutory condition (1465)
Quijada v. CA, GR. No. 126444,December
4, 1988.
Quijada v. CA G.R. No. 126444. December 4, 1998 Sale
AUGUST 29, 2018
FACTS:
On April 5, 1956, Trinidad Quijada together with her sisters and brother, executed a
conditional deed of donation of the two-hectare parcel of land subject of the case in
favor of the Municipality of Talacogon, the condition being that the parcel of land
shall be used solely and exclusively as part of the campus of the proposed provincial
high school in Talacogon.
On July 29, 1962, Trinidad sold one (1) hectare of the subject parcel of land to
Regalado Mondejar (respondent). Subsequently, Trinidad verbally sold the
remaining one (1) hectare to respondent without the benefit of a written deed of sale
and evidenced solely by receipts of payment. After the death of Trinidad, her heirs
filed a complaint for forcible entry against respondent, which complaint was,
however, dismissed for failure to prosecute.
The proposed provincial high school having failed to materialize, the Sangguniang
Bayan of the municipality of Talacogon enacted a resolution reverting the two (2)
hectares of land donated back to the donors. In the meantime, respondent Regalado
Mondejar sold portions of the land to several persons.
Petitioners filed this action against respondents, alleging that their deceased mother
never sold, conveyed, transferred or disposed of the property in question to any
person or entity much less to Regalado Mondejar save the donation made to the
Municipality of Talacogon in 1956; that at the time of the alleged sale to Regalado
Mondejar by Trinidad Quijada, the land still belongs to the Municipality of
Talacogon, hence, the supposed sale is null and void.
As affirmative and/or special defense, respondents alleged that plaintiffs’ action is
barred by laches or has prescribed.
Judgment was rendered in favor of the petitioner.
On appeal, the CA reversed and set aside the judgment, ruling that the sale made by
Trinidad Quijada to respondent Mondejar was valid as the former retained an
inchoate interest on the lots by virtue of the automatic reversion clause in the deed
of donation.
ISSUE:
Whether the sale of the subject property made by Trinidad Quijada to respondent
Mondejar is void, considering that at that time, ownership was already transferred to
the Municipality of Talacogon.
RULING:
We affirm the decision of the respondent court.
Be that at it may, there is one thing which militates against the claim of petitioners.
Sale, being a consensual contract, is perfected by mere consent, which is manifested
the moment there is a meeting of the minds as to the offer and acceptance thereof on
three (3) elements: subject matter, price and terms of payment of the price. ownership
by the seller on the thing sold at the time of the perfection of the contract of sale is
not an element for its perfection.
What the law requires is that the seller has the right to transfer ownership at the time
the thing sold is delivered. Perfection per se does not transfer ownership which
occurs upon the actual or constructive delivery of the thing sold. A perfected contract
of sale cannot be challenged on the ground of non-ownership on the part of the seller
at the time of its perfection; hence, the sale is still valid.
The consummation, however, of the perfected contract is another matter. It occurs
upon the constructive or actual delivery of the subject matter to the buyer when the
seller or her successors-in-interest subsequently acquires ownership thereof. Such
circumstance happened in this case when petitioners — who are Trinidad Quijada’s
heirs and successors-in-interest — became the owners of the subject property upon
the reversion of the ownership of the land to them. Consequently, ownership is
transferred to respondent Mondejar and those who claim their right from him. Article
1434 of the New Civil Code supports the ruling that the seller’s “title passes by
operation of law to the buyer.” This rule applies not only when the subject matter of
the contract of sale is goods, but also to other kinds of property, including real
property.
There is also no merit in petitioners’ contention that since the lots were owned by
the municipality at the time of the sale, they were outside the commerce of men under
Article 1409 (4) of the NCC; thus, the contract involving the same is inexistent and
void from the beginning. However, nowhere in Article 1409 (4) is it provided that
the properties of a municipality, whether it be those for public use or its patrimonial
property are outside the commerce of men.
Besides, the lots in this case were conditionally owned by the municipality. To rule
that the donated properties are outside the commerce of men would render nugatory
the unchallenged reasonableness and justness of the condition which the donor has
the right to impose as owner thereof. Moreover, the objects referred to as outsides
the commerce of man are those which cannot be appropriated, such as the open seas
and the heavenly bodies.
2. Seller’s obligation to transfer ownership
at the time of delivery (Arts. 1459,1462, 1505,
1434 and 1462)
Noel v. CA, 240 S 78 (1995)
FACTS: (Quiason, J.)
PETITIONS for review on certiorari of a decision of the Court of Appeals.
Gregorio Nanaman and Hilaria Tabuclin (Nanaman spouses) were a childless,
legally-married couple. Gregorio, however, had a child named Virgilio Nanaman
(IC) by another woman. Since he was two years old, Virgilio was reared byGregorio
and Hilaria. He was sent to school by the couple until he reached third year of the
law course. During their marriage, Gregorio and Hilaria acquired certain property
including a 34.7-hectare land in Tambo, Iligan City on which they planted sugarcane,
corn and bananas. They also lived there with Virgilio and 15 tenants. On October 2,
1945, Gregorio died. Hilaria then administered the property with the help of
Virgilio. Through their tenants, Hilaria and Virgilio enjoyed the produce of the land
to the
exclusion of Juan Nanaman, the brother of Gregorio, and Esperanza and Caridad
Nanaman, Gregorio's daughters by still another woman. In 1953, Virgilio (IC)
declared the property in his name for taxation purposes. On November 1, 1952,
Hilaria and Virgilio, mortgaged the 34.7-hectare land in favor of private respondent,
in consideration of the amount of P4,800.00.
On February 16, 1954, Hilaria and Virgilio executed a deed of sale over the same
tract of land also in favor of private respondent in consideration of the sum
of P16,000.00. Witnesses to the sale were the wife of Virgilio, Rosita S. Nanaman,
Rufo C. Salas, the driver of private respondent, and Remedios Pilotan. The tax
declaration in the name of Virgilio was cancelled and a new tax declaration was
issued in the name of private respondent, Jose Deleste. Having discovered that the
property was in arrears in the payment of taxes from 1952, private respondent paid
the taxes for 1952, 1953 and 1954. From then on, private respondent has paid the
taxes on the property.
On May 15, 1954, Hilaria died. On October 27, 1954, Esperanza and Caridad
Nanaman filed intestate estate proceedings concerning the estate of their father,
Gregorio. Included in the list of property of the estate was the 34.7-hectare land.
Inasmuch as only Esperanza, Caridad and Virgilio Nanaman were named as heirs of
Gregorio in the petition, Juan Nanaman, Gregorio's brother, opposed it. On
November 26, 1954, the petition was amended to include the estate of Hilaria with
Alejo Tabuclin, Hilaria's brother, and Julio Tabuclin, (nephew)a son of Hilaria’s
deceased brother, Jose, as additional petitioners. Having been appointed special
administrator of the estate of the Nanaman couple, Juan Nanaman included the 34.7-
hectare land in the list of the assets of the estate. Juan also reported that Virgilio
took the amount of P350.00 from the produce of the estate without prior permission
and that five tenants delivered sugar and palay to private respondent. Hence Juan
prayed that the court cite private respondent and the tenants in contempt of court.
Accordingly, in its Order of January 30, 1956, the probate court required private
respondent and said tenants to appear before it and "show cause why they should not
be cited for contempt for illegally interfering in the land" under special
administration.
On June 16, 1956, when Edilberto Noel took over as regular administrator of the
estate, he was not able to take possession of the land in question because it was in
the possession of private respondent and some heirs of Hilaria. Later, Private
respondent and the heirs of the Nanaman spouses executed an amicable settlement
of the Nanaman estate. In the document, private respondent agreed "to relinquish his
rights to one-half (1/2) of the entire parcel of land in Tambo, Iligan City, indicated
in item 1 under the Estate, sold to him by Hilaria Tabuclin, in favor of all the heirs
of the abovementioned intestate [estate] for the reason that not all of the heirs of
Gregorio Nanaman have signed and agreed.” The court approved the amicable
settlement but when it was questioned by some heirs, the court set aside its approval
and declared it null and void. Noel, as regular administrator, and as ordered by the
court filed an action against private respondent for the reversion of title over the
34.7-hectare land to the Nanaman estate and to order private respondent to pay the
rentals and attorney’s fees to the estate.
ISSUE:
W/N Hilaria and Virgilio could dispose of the entire property sold to private
respondent and assuming that they did not have full ownership thereof, whether the
right of action to recover the share of the collateral heirs of Gregorio had prescribed
or been lost through laches.
HELD:
NO. Gregorio died in 1945 long before the effectivity of the Civil Code of
the Philippines on August 30, 1950. Under Article 2263 of the said Code, "rights to
the inheritance of a person who died, with or without a will, before the effectivity of
this Code, shall be governed by the Civil Code of 1889, by other previous laws, and
by the rules of Court."
Thus, succession to the estate of Gregorio was governed primarily by the
provisions of the Spanish Civil Code of 1889. Under Article 953 thereof, a spouse
like Hilaria, who is survived by brothers or sisters or children of brothers or sisters
of the decedent, as is obtaining in this case, was entitled to receive in usufruct the
part of the inheritance pertaining to said heirs. Hilaria, however, had full ownership,
not merely usufruct, over the undivided half of the estate (Spanish Civil Code of
1889, Art. 493). It is only this undivided half-interest that she could validly alienate.
On the other hand, Virgilio was not an heir of Gregorio under the Spanish Civil Code
of 1889. Although he was treated as a child by the Nanaman spouses, illegitimate
children who were not natural were disqualified to inherit under the said Code (Cid
v. Burnaman, 24 SCRA 434 [1968]). Article 998 of the Civil Code of the
Philippines, which gave an illegitimate child certain hereditary rights, could not
benefit Virgilio because the right of ownership of the collateral heirs of Gregorio
had become vested upon his death (Civil Code of the Philippines, Art. 2253; Uson
v. Del Rosario, 92 Phil. 530 [1953]). Therefore, Virgilio had no right at all to transfer
ownership over which he did not own. In a contract of sale, it is essential that the
seller is the owner of the property he is selling. The principal obligation of a seller is
"to transfer the ownership of" the property sold (Civil Code of the Philippines, Art.
1458). This law stems from the principle that nobody can dispose of that which does
not belong to him (Azcona v. Reyes, 59 Phil. 446 [1934]; Coronel v. Ona, 33 Phil.
456 [1916). NEMO DAT QUAD NON HABET .
While it cannot be said that fraud attended the sale to private respondent, clearly
there was a mistake on the part of Hilaria and Virgilio in selling an undivided interest
in the property which belonged to the collateral heirs of Gregorio. The sale, having
been made in 1954, was governed by the Civil Code of the Philippines. Under Article
1456 of said Code, an implied trust was created on the one-half undivided interest
over the 34.7-hectare land in favor of the real owners Under the law in force in 1945,
the surviving spouse was given the management of the conjugal property until the
affairs of the conjugal partnership were terminated. The surviving spouse became
the owner of one-half interest of the conjugal estate in his own right. He also became
a trustee with respect to the other half for the benefit of whoever may be legally
entitled to inherit the said portion. "He could therefore no more acquire a title by
prescription against those for whom he was administering the conjugal estate than
could a guardian his ward or a judicial administrator against the heirs of an estate. .
. . The surviving husband as the administrator and liquidator of the conjugal estate
occupies the
position of a trustee of the highest order and is not permitted by the law to hold that
estate or any portion thereof adversely to those for whose benefit the law imposes
upon him duty of administration and liquidation" (Pamittan v. Lasam, 60 Phil. 908
[1934]).
The possession of Virgilio, his registration of the land in his name for tax
purposes, his hiring of tenants to till the land, and his enjoyment of the produce of
the tenants, appear more as acts done to help Hilaria in managing the conjugal
property. There is no evidence to prove indubitably that Virgilio asserted a claim
of ownership over the property in his own right and adverse to all including
Hilaria.
Amended judgment reversed and set aside, original judgment reinstated in toto.
Arra Realty Corp. v. Guaranty Corp. and Insurance
Agency, 438 S
441(2004);
Heirs of Jesus M. Marcuña v. CA, 461 S 186 (2005).
B. MUST BE LICIT (Arts. 1347, 1459 and 1575)
C. MUST BE DETERMINATE OR DETERMINABLE (1460) -
Melliza v. City of llo-ilo,23 S 477 (1968);
FACTS:
Juliana Melliza owned 3 parcels of residential land in Iloilo City (OCT 3462). Said
parcels of land were known as Lots Nos. 2, 5 and 1214. On November 27, 1931 she
donated to the then Municipality of Iloilo, 9,000 sq. m. of Lot 1214 to serve as site
for the municipal hall, avenue and parks and for “Arellano Plan.”
In 1952, the University of the Philippines enclosed the site donated with a wire fence.
Pio Sian Melliza thereupon made representations with the city authorities for
payment of the value of the lot (Lot 1214-B). The University of the Philippines,
meanwhile, obtained Transfer Certificate of Title No. 7152 covering the three lots,
Nos. 1214-B, 1214-C and 1214-D.
On December 10, 1955, Melizza filed an action in the Court of First Instance of Iloilo
against Iloilo City and the University of the Philippines for recovery of Lot 1214-B
or of its value.
On May 19, 1965, the Court of Appeals affirmed the interpretation of the Court of
First Instance that the portion of Lot 1214 sold by Juliana Melliza was not limited to
the 10,788 square meters specifically mentioned but included whatever was needed
for the construction of avenues, parks and the city hall site.
ISSUE:
Whether contract is perfected if object of the sale is capable of being determinate at
the time of the contract.
HELD:
Yes. The requirement of the law that a sale must have for its object a determinate
thing is fulfilled as long as at the time of the contract is entered into, the object is
capable of being determinate without the necessity of a new or further agreement
between the parties. The specific lots and purpose that the lots object of sale are the
ones needed for city hall site, avenue and parks according to “Arellano Plan”
sufficiently provides a basis as of the time of the execution of the contract for
rendering determinate said lots without the need of a new and further agreement of
the parties.
Heirs of San Andres v. Rodriguez, 332 S 769 (2000);
Juan San Andres sold a portion of his property to
Rodriguez as evidenced by a Deed of Sale. Upon his death
Ramon San Andres was appointed as administrator of the
property. He hired a land surveyor and found that
Rodriguez enlarged the property he bought from late Juan.
Ramon demanded form the Rodriguez to vacate the portion
allegedly occupied but the latter refused hence the
present action.
Rodriguez said that the excess portion was also sold to
him by late Juan the following day after the first sale.
He argued that the full payment of the whole sold lot
would be effected within five years from the execution
of the formal deed of sale after a survey of the property
is conducted, as evidenced by a receipt of sale. The
balance of the purchase price was consigned.
RTC ruled in favor of petitioner while CA reversed the
ruling. In SC petitioner argued that there is no certain
object of the contract of sale as the lot was not
described with sufficiency that there should be another
contract to finally ascertain the identity.
SC: Petition has no merit. The contract of sale has the
following elements: 1. consent or meeting of the minds,
2. determinate subject matter, 3. price certain in money.
There is no dispute that Rodriguez purchased a potion of
Lot 1914-B consisting of 345 square meters. The said
portion is located at the middle of the lot. Since the
lot subsequently sold is said to adjoined the previously
paid lot, the subject is capable of being determined
without the need of another contract.
However, there is a need to clarify what CA said is a
conditional sale. CA considered as a condition the
stipulation of the parties that the full consideration,
based on a survey of the lot, would be due and payable
within 5 years from the execution of the formal deed of
sale.
It is evident in the stipulation in the receipt that the
vendor late Juan sold the lot to Rodriguez and undertook
the transfer of ownership without any qualification,
reservation or condition.
It can be gainsaid from the facts that the contract of
sale is absolute, and not conditional. There is no
reservation of ownership nor stipulation providing for a
unilateral rescission by either party. In fact the sale
was consummated upon the delivery of the lot to Rodriguez.
Art.1477 provides that the ownership of the thing sold
shall be transferred to the vendee upon the actual or
constructive deliver thereof.
The stipulation that the payment of the full
consideration based on a survey shall be due and payable
in 5 years from the execution of the formal deed of sale
is not a condition which affects the efficacy of contract.
CA decision is AFFIIRMED.
1. Generic things as objects of sale (Arts. 1246
and 1409[6])
Yu Tek & co., v.Gonzales, 29 Phil. 384 (1915)
Doctrine:
There is a perfected sale with regard to the “thing” whenever the article of
sale has been physically segregated from all other articles.
Facts:
Gonzalez received P3,000 from Yu Tek and Co. and in exchange, the former
obligated himself to deliver 600 piculs of sugar of the first and second grade,
according to the result of the polarization, within the period of three months.
It was also stipulated that in case Gonzales fails to deliver, the contract will
be rescinded he will be obligated to return the P3,000 received and also the
sum of P1,200 by way of indemnity for loss and damages.
Plaintiff proved that no sugar had been delivered to him under the contract
nor had he been able to recover the P3,000.
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 he was relieved from complying with his undertaking
by loss of the thing due.
Issue:
Whether or not there was a perfected contract of sale
Held:
No. This court has consistently held that there is a perfected sale with regard
to the “thing” whenever the article of sale has been physically segregated
from all other articles.
In the case at bar, the undertaking of the defendant was to sell to the plaintiff
600 piculs of sugar of the first and second classes. Was this an agreement
upon the “thing” which was the object of the contract? For the purpose of sale
its bulk is weighed, the customary unit of weight being denominated a “picul.”
Now, if called upon to designate the article sold, it is clear that the defendant
could only say that it was “sugar.” He could only use this generic name for
the thing sold. There was no “appropriation” of any particular lot of sugar.
Neither party could point to any specific quantity of sugar and say: “This is
the article which was the subject of our contract.”
We conclude that the contract in the case at bar was merely an executory
agreement; a promise of sale and not a sale. There was no perfected sale.
2. Undivided Interest (1463, 1464)
3. Undivided Share in a mass of fungible goods may
be object of sale. (Art. 1464)
D. WHETHER QUANTITY OF OBJECT IS ESSENTIAL FOR
PERFECTION
E.
(Art. 1349)
National Grains Authority v. IAC, 171 SCRA 131 (1989);
Johannes Schuback &
FACTS:
Petitioner, National Grains Authority (now the NFA), is a government agency
created under Presidential Decree No. 4. One of the its incidental functions is the
buying of palay grains from disqualified famers.
On August 23, 1979, private respondent Leon Soriano offered to sell palay grains to
the NFA, through William Cabal, the Provincial Manager of NFA stationed at
Tuguegarao, Cagayan. He submitted the documents required by the NFA for pre-
qualifying as a seller. Then, private respondent’s documents were processed
accordingly; he was given a quota of 2 640 cavans of palay. The quota noted in the
Farmer’s Information Sheet represented the maximum number of cavans of palay
that Soriano may sell to the NFA.
Soriano delivered 630 cavans of palay. The palay delivered were not rebagged,
classified and weighed. When Soriano demanded payment of 630 cavans of palay,
he was informed that its payment will be held in abeyance since Mr. Cabal was still
investigating on an information he received that Soriano was not a bona fide farmer
and the palay delivered by him was not produced from his farmland but was taken
from the warehouse of a rice trader, Ben de Guzman. Then, private respondent was
asked to withdraw from the NFA Warehouse the 630 cavans Soriano delivered,
stating that NFA cannot legally accept the said delivery on the basis of the
subsequent certification of the BAEX technician, Napoleon Callangan, that Soriano
is not a bona fide farmer.
Despite the advised to withdraw the cavans of palay, private respondent insisted that
the palay grains delivered be paid. Then, he filed a complaint for specific
performance and collection of money with damages against NFA and Mr. Cabal
before the Court of First Instance of Tugeugarao.
Upon the agreement and order of the court, the cavans of play were withdrawn and
an inventory was made by the sheriff as representative of the court, representative of
Soriano, and a representative of NFA.
The Court of First Instance of Cagayan rendered judgment in favor of private
respondent and ordered the NFA to pay the amount of Php 47 250 representing the
unpaid price of the 630 cavans of palay plus legal interest. The lower court’s decision
was then affirmed by the Intermediate Appellate Court.
ISSUE:
Is there a contract of sale between the parties?
HELD:
Yes. Article 1458 of the Civil Code of the Philippines defines sale as a contract
whereby one of the contracting parties obligates himself to transfer the ownership of
and to deliver a determinate thing, and the other party to pay the price certain in
money or its equivalent. A contract, on the other, is a meeting of minds between two
persons whereby one binds himself, with respect to the other, to give something or
to render some service. The essential requisites of contracts are: 1. consent of the
contracting parties, 2. Object certain which is the subject matter of the contract, and
3. cause of the obligation which is established. In the present case, private respondent
initially offered to sell palay grains produced in his farmland to NFA. When the latter
accepted the offer noting in Soriano’s Farmer’s Information Sheet a quota of 2 640
cavans of palay, there was already meeting of minds between the parties. The object
of the contract, being the palay grains produced in Soriano’s farmland and the NFA
was to pay the same depending upon its quality. The fact the exact number is not
determinate shall not be an obstacle to the existence of the contract – Provided it is
possible to determine the same, without the need of a new contract between the
parties. In this case, there was no need for NFA and Soriano to enter into a new
contract to determine the exact number of cavans of palay sold. Soriano can deliver
so much of his produce as long as it does not exceed 2 640 cavans.
JOHANNES SCHUBACK & SONS PHILIPPINE TRADING CORPORATION, petitioner, vs.
THE HON. COURT OF APPEALS, RAMON SAN JOSE, JR., doing business under the
name and style “PHILIPPINE SJ INDUSTRIAL TRADING,” respondents. G.R. No.
105387 November 11, 1993
FACTS:
Sometime in 1981, the defendant established a contract with plaintiff through the
Philippine Consulate General in Hamburg, West Germany, because he wanted to
purchase MAN bus spare parts from Germany. Plaintiff communicated with its
trading partner, JOHANNES SCHUBACK & SONS PHILIPPINE TRADING
CORPORATION (Schuback Hamburg) regarding the spare parts defendant wanted
to order. Defendant submitted to plaintiff a list of the parts he wanted to purchase
with specific part numbers and description. Plaintiff sent to defendant a letter dated
25 November, 1981, enclosing its offer on the items listed by defendant.
Plaintiff submitted its formal offer containing the item number, quantity, part
number, description, unit price and total to defendant. On December, 24, 1981,
defendant informed plaintiff of his desire to avail of the prices of the parts at that
time.
Plaintiff immediately ordered the items needed by defendant from Schuback
Hamburg to enable defendant to avail of the old prices. Schuback Hamburg in turn
ordered the items from NDK, a supplier of MAN spare parts in West Germany. On
January 4, 1982,t Schuback Hamburg sent plaintiff a proforma invoice to be used by
defendant in applying for a letter of credit. Said invoice required that the letter of
credit be opened in favor of Schuback Hamburg.
On October 18, 1982, Plaintiff again reminded defendant of his order and advised
that the case may be endorsed to its lawyers. Defendant replied that he did not make
any valid Purchase Order and that there was no definite contract between him and
plaintiff. Plaintiff sent a rejoinder explaining that there is a valid Purchase Order and
suggesting that defendant either proceed with the order and open a letter of credit or
cancel the order and pay the cancellation fee of 30% of F.O.B. value, or plaintiff will
endorse the case to its lawyers.
Consequently, petitioner filed a complaint for recovery of actual or compensatory
damages, unearned profits, interest, attorney’s fees and costs against private
respondent.
In its decision dated June 13, 1988, the trial court ruled in favor of petitioner by
ordering private respondent to pay petitioner, among others, actual compensatory
damages in the amount of DM 51,917.81, unearned profits in the amount of DM
14,061.07, or their peso equivalent.
Thereafter, private respondent elevated his case before the Court of Appeals. On
February 18, 1992, the appellate court reversed the decision of the trial court and
dismissed the complaint of petitioner. It ruled that there was no perfection of contract
since there was no meeting of the minds as to the price between the last week of
December 1981 and the first week of January 1982.
Issue:
Whether or not a contract of sale has been perfected between the parties
Held:
The Supreme Court reversed the decision of the Court of Appeals and reinstated the
decision of the trial court. It bears emphasizing that a “contract of sale is perfected
at the moment there is a meeting of minds upon the thing which is the object of the
contract and upon the price.”
Article 1319 of the Civil Code states: “Consent is manifested by the meeting of the
offer and acceptance upon the thing and the cause which are to constitute the
contract. The offer must be certain and the acceptance absolute. A qualified
acceptance constitutes a counter offer.” The facts presented to us indicate that
consent on both sides has been manifested.
The offer by petitioner was manifested on December 17, 1981 when petitioner
submitted its proposal containing the item number, quantity, part number,
description, the unit price and total to private respondent. On December 24, 1981,
private respondent informed petitioner of his desire to avail of the prices of the parts
at that time and simultaneously enclosed its Purchase Order No. 0l01 dated
December 14, 1981. At this stage, a meeting of the minds between vendor and
vendee has occurred, the object of the contract: being the spare parts and the
consideration, the price stated in petitioner’s offer dated December 17, 1981 and
accepted by the respondent on December 24,1981.
When petitioner forwarded its purchase order to NDK, the price was still pegged at
the old one. Thus, the pronouncement of the Court Appeals that there as no
confirmed price on or about the last week of December 1981 and/or the first week
of January 1982 was erroneous.
On the part of the buyer, the situation reveals that private respondent failed to open
an irrevocable letter of credit without recourse in favor of Johannes Schuback of
Hamburg, Germany. This omission, however, does not prevent the perfection of the
contract between the parties.
The opening of a letter of credit in favor of a vendor is only a mode of payment. It is
not among the essential requirements of a contract of sale enumerated in Article 1305
and 1474 of the Civil Code, the absence of any of which will prevent the perfection
of the contract from taking place.
To adopt the Court of Appeals’ ruling that the contract of sale was dependent on the
opening of a letter of credit would be untenable from a pragmatic point of view
because private respondent would not be able to avail of the old prices which were
open to him only for a limited period of time.
WHEREFORE, the petition is GRANTED and the decision of the trial court dated
June 13, 1988 is REINSTATED with modification.
E. LEGALITY OF SUBJECT MATTER(Arts. 1409, 1458, 1461,
1462 and 1575)
1. Special laws
2. Absolutely simulated sale -
II. SALE DISTINGUISHED FROM SIMILAR CONTRACTS
1) Dacion En Pago (Arts. 1245 and 1934) -
Philippine Lawin Bus Co. v. CA, 374SCRA 322 (2002)
2) Agency to Sell (Art. 1466) -
Quiroga v. Parsons, 38 Phil. 501 (1918);
Quiroga v. Parsons Hardware 38 Phil 501, August 23, 1918
FACTS:
On Jan 24, 1911, plaintiff and the respondent entered
into a contract making the latter an “agent” of the
former. The contract stipulates that Don Andres Quiroga,
here in petitioner, grants exclusive rights to sell his
beds in the Visayan region to J. Parsons. The contract
only stipulates that J.Parsons should pay Quiroga within
6 months upon the delivery of beds.
Subsequently, Quiroga files a case against Parsons for
allegedly violating the following stipulations: not to
sell the beds at higher prices than those of the invoices;
to have an open establishment in Iloilo; itself to conduct
the agency; to keep the beds on public exhibition, and
to pay for the advertisement expenses for the same; and
to order the beds by the dozen and in no other manner.
With the exception of the obligation on the part of the
defendant to order the beds by the dozen and in no other
manner, none of the obligations imputed to the defendant
in the two causes of action are expressly set forth in
the contract.But the plaintiff alleged that the defendant
was his agent for the sale of his beds in Iloilo, and
that said obligations are implied in a contract of
commercial agency. The whole question, therefore, reduced
itself to a determination as to whether the defendant,
by reason of the contract hereinbefore transcribed, was
a purchaser or an agent of the plaintiff for the sale of
his beds.
ISSUE:
Whether or not the contract entered into between the
plaintiff and defendant is a contract of agency.
RULING:
NO. In order to classify a contract, due attention must
be given to its essential clauses. In the contract in
question, what was essential, as constituting its cause
and subject matter, is that the plaintiff was to furnish
the defendant with the beds which the latter might order,
at the price stipulated, and that the defendant was to
pay the price in the manner stipulated. Payment was to
be made at the end of sixty days, or before, at the
plaintiff’s request, or in cash, if the defendant so
preferred.
These are precisely the essential features of a contract
of purchase and sale. There was the obligation on the
part of the plaintiff to supply the beds, and, on the
part of the defendant, to pay their price. These features
exclude the legal conception of an agency or order to
sell whereby the mandatory or agent received the thing
to sell it, and does not pay its price, but delivers to
the principal the price he obtains from the sale of the
thing to a third person, and if he does not succeed in
selling it, he returns it.
Puyat v. Arco Amusement Co., 72 Phil. 402' (1941);
FACTS:
Arco Amusement was engaged in the business of operating cinematographs while
Gonzalo Puyat & Sons (GPS) was the exclusive agent in the Philippines for the Starr
Piano Company (SPC). Desiring to equip its cinematograph with sound reproducing
devices, Arco approached GPS, through its president, Gil Puyat, and an employee
named Santos. After some negotiations, it was agreed between the parties that GPS
would order sound reproducing equipment from SPC and that Arco would pay GPS,
in addition to the price of the equipment, a 10% commission, plus all expenses such
as freight, insurance, etc. When GPS inquired SPC the price (without discount) of
the equipment, the latter quoted such at $1,700.00 FOB Indiana. Being agreeable to
the price, Arco formally authorized the order. The following year, both parties agreed
for another order of sound reproducing equipment on the same terms as the first at
$1,600.00 plus 10% plus all other expenses. 3 years later, Arco discovered that the
prices quoted to them by GPS with regard to their first 2 orders mentioned, were not
the net prices but rather the latter has obtained a discount from SPC thus, equipment
is deemed overpriced and GPS had to reimburse the excess amount.
ISSUE:
Is there a contract of agency?
HELD:
No. The contract between the petitioner and the respondent was one of purchase and
sale. The letters, Exhibits 1 and 2, by which the respondent accepted the prices of
$1,700.00 and $1,600.00, respectively, for the sound reproducing equipment subject
of its contract with petitioner, are clear in their terms and admit no other
interpretation that the respondent in question at the prices indicated which are fixed
and determinate. The respondent admitted in its complaint with the CFI of Manila
that the petitioner agreed to sell to it the first sound reproducing equipment. To hold
the petitioner an agent of the respondent in the purchase of equipment and machinery
from the SPC of Richmond, Indiana, is incompatible with the admitted fact that the
petitioner is the exclusive agent of the same company in the Philippines. It is out of
the ordinary for one to be the agent of both the vendor and the purchaser.
Ker and Co., Ltd. V. Lingad, 38 SCRA 524(1971)
FACTS:
Melecio R. Domingo, then Commissioner of Internal Revenue
assessed Ker & Co. and found the sum of P20,272.33 as the
commercial broker’s percentage tax, surcharge, and
compromise penalty for the period from July 1, 1949 to
December 31, 1953. Ker & Co petitioned that the request
be cancelled, but the petitioned was turned down. Kr &
Co. then filed a petition for review with the Court of
Tax Appeals. Commissioner Domingo maintained his stand
that the petitioner should be taxed in such amount as a
commercial broker. The liability arose from a contract
that Ker & Co. had with the United States Rubber
International, where Ker & Co. was designated as the
distributor and United States Rubber International as the
company. Ker & Co., as Distributor, is required to exert
every effort to have the shipment of the products in the
maximum quantity and to promote in every way the sale
thereof. The prices, discounts, terms of payment, terms
of delivery and other conditions of sale were subject to
change in the discretion of United States Rubber
International. All specifications for the goods ordered
were subject to acceptance of United States Rubber
International and required to accept such goods shipped
as well as to clear the same through customs and to
arrange for delivery in its warehouse in Cebu City.
ISSUE:
Whether or not the relationship created between Ker & Co.
and United States Rubber International is one of vendor
and vendee or broker and principal.
RULING:
The relationship between Ker & Co. is one of brokerage
or agency. According to the National Internal Revenue
Code, a commercial broker “includes all persons, other
than importers, manufacturers, producers, or bona fide
employees, who, for compensation or profit, sell or bring
about sales or purchases of merchandise for other persons
or bring proposed buyers and sellers together, or
negotiate freights or other business for owners of
vessels or other means of transportation, or for the
shippers, or consignors or consignees of freight carried
by vessels or other means of transportation. The term
includes commission merchants.” In the language of
Justice J. B. L. Reyes, who penned the opinion: “Since
the company retained ownership of the goods, even as it
delivered possession unto the dealer for resale to
customers, the price and terms of which were subject to
the company’s control, the relationship between the
company and the dealer is one of agency.” The relationship
between Ker & Co. and United States Rubber International
was not one of seller and purchaser, if that was the
intention, then it would not have included covenants
which in their totality would negate the concept of a
firm acquiring as vendee goods from another. Instead, the
stipulations were so worded as to lead to no other
conclusion than that the control by the United States
Rubber International over the goods in question is, in
the language of the Constantino opinion, “pervasive”.
3) Contract for Piece-of-Work (Arts. 1467, 1713 to
1715)
Celestino & Co. v. Collector, 99 Phil. 841 (1956);
Facts: Celestino Co & Company is a duly registered general co-partnership doing
business under the trade name of “Oriental Sash Factory”. From 1946 to 1951 it paid
percentage taxes of 7% on the gross receipts of its sash, door and window factory, in
accordance with sec. 186 of the National Internal Revenue Code which is a tax on
the original sales of articles by manufacturer, producer or importer. However, in
1952 it began to claim only 3% tax under Sec. 191, which is a tax on sales of services.
Petitioner claims that it does not manufacture ready-made doors, sash and windows
for the public, but only upon special orders from the customers, hence, it is not
engaged in manufacturing under sec 186, but only in sales of services covered by sec
191. Having failed to convince BIR, petitioner went to the Court of Tax Appeal
where it also failed. CTA, in its decision, holds that the “petitioner has chosen for its
tradename and has offered itself to the public as a “Factory”, which means it is out
to do business, in its chosen lines on a big scale. As a general rule, sash factories
receive orders for doors and windows of special design only in particular cases but
the bulk of their sales is derived from a ready-made doors and windows of standard
sizes for the average home.. Even if we were to believe petitioner’s claim that it does
not manufacture ready-made sash, doors and windows for the public and that it
makes these articles only special order of its customers, that does not make it a
contractor within the purview of section 191 of the national Internal Revenue Code…
there are no less than fifty occupations enumerated in the aforesaid section…and
after reading carefully each and every one of them, we cannot find under which the
business of manufacturing sash, doors and windows upon special order of customers
fall under the category” mentioned under Sec 191.
Issue: Whether the petitioner company provides special services or is engaged in
manufacturing.
Held: The important thing to remember is that Celestino Co & Company habitually
makes sash, windows and doors, as it has represented in its stationery and
advertisements to the public. That it “manufactures” the same is practically admitted
by appellant itself. The fact that windows and doors are made by it only when
customers place their orders, does not alter the nature of the establishment, for it is
obvious that it only accepted such orders as called for the employment of such
material-moulding, frames, panels-as it ordinarily manufactured or was in a position
habitually to manufacture. The Oriental Sash Factory does nothing more than sell
the goods that it mass-produces or habitually makes; sash, panels, mouldings,
frames, cutting them to such sizes and combining them in such forms as its customers
may desire.
Appellant invokes Article 1467 of the New Civil Code to bolster its contention that
in filing orders for windows and doors according to specifications, it did not sell, but
merely contracted for particular pieces of work or “merely sold its services”. In our
opinion when this Factory accepts a job that requires the use of extraordinary or
additional equipment, or involves services not generally performed by it-it thereby
contracts for a piece of work — filing special orders within the meaning of Article
1467. The orders herein exhibited were not shown to be special. They were merely
orders for work — nothing is shown to call them special requiring extraordinary
service of the factory. The thought occurs to us that if, as alleged-all the work of
appellant is only to fill orders previously made, such orders should not be called
special work, but regular work. The Supreme Court affirms the assailed decision by
the CTA.
 Commissioner of Internal Revenue v.Engineering
Equipment & Supply Co., 64 SCRA 590 (1975);
Facts:
· Engineering Equipment and Supply Co. (Engineering for short), a domestic
corporation, is an engineering and machinery firm. As operator of an integrated
engineering shop, it is engaged, among others, in the design and installation of
central type air conditioning system, pumping plants and steel fabrications.
· On July 27, 1956, one Juan de la Cruz, wrote the then Collector, now
Commissioner, of Internal Revenue denouncing Engineering for tax evasion by
misdeclaring its imported articles and failing to pay the correct percentage taxes due
thereon in connivance with its foreign suppliers. Engineering was likewise
denounced to the Central Bank (CB) for alleged fraud in obtaining its dollar
allocations. Acting on these denunciations, a raid and search was conducted by a
joint team of Central Bank, (CB), National Bureau of Investigation (NBI) and
Bureau of Internal Revenue (BIR) agents on September 27, 1956, on which occasion
voluminous records of the firm were seized and confiscated
· On September 30, 1957, revenue examiners Quesada and Catudan reported and
recommended to the then Collector, now Commissioner, of Internal Revenue that
Engineering be assessed for P480,912.01 as deficiency advance sales tax on the
theory that it misdeclared its importation of air conditioning units and parts and
accessories thereof which are subject to tax under Section 185(m) of the Tax Code,
· On March 3, 1959. the Commissioner assessed against, and demanded upon,
Engineering payment of the increased amount and suggested that P10,000 be paid as
compromise in extrajudicial settlement of Engineering's penal liability for violation
of the Tax Code. The firm, however, contested the tax assessment and requested that
it be furnished with the details and particulars of the Commissioner's assessment
· Engineering appealed to the Court of Tax Appeals. CTA rendered a decision in
favor of Engineering, declared exempt from the deficiency manufacturers sales tax
covering the period from June 1, 1948. to September 2, 1956. However, petitioner is
ordered to pay respondent, or his duly authorized collection agent, the sum of
P174,141.62 as compensating tax and 25% surcharge for the period from 1953 to
September 1956. With costs against petitioner.
· Not satisfied, both appealed before the SC. Since the two cases are similar, both
will be tried together.
Issue: W/ON Engineering is a manufacturer of air conditioning units under Section
185(m), supra, in relation to Sections 183(b) and 194 of the Code, or a contractor
under Section 191 of the same Code.
Held: Contractor. The distinction between a contract of sale and one for work, labor
and materials is tested by the inquiry whether the thing transferred is one not in
existence and which never would have existed but for the order of the party desiring
to acquire it, or a thing which would have existed and has been the subject of sale to
some other persons even if the order had not been given.
The word "contractor" has come to be used with special reference to a person who,
in the pursuit of the independent business, undertakes to do a specific job or piece of
work for other persons, using his own means and methods without submitting
himself to control as to the petty details. The true test of a contractor, would seem to
be that he renders service in the course of an independent occupation, representing
the will of his employer only as to the result of his work, and not as to the means by
which it is accomplished.
Engineering, in a nutshell, fabricates, assembles, supplies and installs in the
buildings of its various customers the central type air conditioning system; prepares
the plans and specifications therefor which are distinct and different from each other;
the air conditioning units and spare parts or accessories thereof used by petitioner
are not the window type of air conditioner which are manufactured, assembled and
produced locally for sale to the general market; and the imported air conditioning
units and spare parts or accessories thereof are supplied and installed by petitioner
upon previous orders of its customers conformably with their needs and
requirements.
Engineering & Machinery Corp. v. CA, 252 SCRA 156.
Facts:
Pursuant to a contract, petitioner undertook to install air conditioning
system in private respondent’s building. The building was later sold to the
National Investment and Development Corporation which took possession
of it. Upon NIDC’s failure to comply with certain conditions, the sale was
rescinded. NIDC reported to respondent that there were certain defects in
the air conditioning system. Respondent filed a complaint against petitioner
for non-compliance with the agreed plans and specifications. Petitioner
moved to dismiss the complaint on the ground of the 6-month prescription
of warranty against hidden defects. Private respondent averred that the
contract was not of sale but for a piece of work, the action for damages of
which prescribes after 10 years.
Issue:
Is a contract for the fabrication and installation of a central air-conditioning
system in a building, one of "sale" or "for a piece of work"?
Held:
A contract for a piece of work, labor and materials may be distinguished from
a contract of sale by the inquiry as to whether the thing transferred is one not
in existence and which would never have existed but for the order, of the
person desiring it. In such case, the contract is one for a piece of work, not a
sale. On the other hand, if the thing subject of the contract would have existed
and been the subject of a sale to some other person even if the order had not
been given, then the contract is one of sale. The distinction between the two
contracts depends on the intention of the parties. Thus, if the parties
intended that at some future date an object has to be delivered, without
considering the work or labor of the party bound to deliver, the contract is
one of sale. But if one of the parties accepts the undertaking on the basis of
some plan, taking into account the work he will employ personally or through
another, there is a contract for a piece of work.
Clearly, the contract in question is one for a piece of work. It is not
petitioner's line of business to manufacture air-conditioning systems to be
sold "off-the-shelf." Its business and particular field of expertise is the
fabrication and installation of such systems as ordered by customers and in
accordance with the particular plans and specifications provided by the
customers. Naturally, the price or compensation for the system
manufactured and installed will depend greatly on the particular plans and
specifications agreed upon with the customers. The remedy against
violations of the warranty against hidden defects is either to withdraw from
the contract (redhibitory action) or to demand a proportionate reduction of
the price (accion quanti manoris), with damages in either case.
While it is true that Article 1571 of the Civil Code provides for a prescriptive
period of six months for a redhibitory action, a cursory reading of the ten
preceding articles to which it refers will reveal that said rule may be applied
only in case of implied warranties; and where there is an express warranty in
the contract, as in the case at bench, the prescriptive period is the one
specified in the express warranty, and in the absence of such period, "the
general rule on rescission of contract, which is four years (Article 1389, Civil
Code) shall apply". It would appear that this suit is barred by prescription
because the complaint was filed more than four years after the execution of
the contract and the completion of the air-conditioning system. However, a
close scrutiny of the complaint filed in the trial court reveals that the original
action is not really for enforcement of the warranties against hidden defects,
but one for breach of the contract itself. The governing law is Article 1715.
However, inasmuch as this provision does not contain a specific prescriptive
period, the general law on prescription, which is Article 1144 of the Civil
Code, will apply. Said provision states, inter alia, that actions "upon a written
contract" prescribe in ten (10) years. Since the governing contract was
executed on September 10, 1962 and the complaint was filed on May 8, 1971,
it is clear that the action has not prescribed. The mere fact that the private
respondent accepted the work does not, ipso facto, relieve the petitioner from
liability for deviations from and violations of the written contract, as the law
gives him ten (10) years within which to file an action based on breach
thereof.
1) Barter (Arts. 1468, 1638 to 1641
Price certain in Money (1469)
Lesion (1470)
Cruz vs. Fernando Sr.,477 SCRA 173, December 9,2005
FACTS:
Petitioners are occupants of the front portion of a property in Baliuag, Bulacan. In
1994, respondents filed RTC a complaint for accion publiciana against petitioners,
demanding the latter to vacate the premises and pay the rentals.
Respondent alleged that prior to their acquisition of the property, the original owners,
in a Kasunduan, offered to sell the property to petitioners but the latter failed to
purchase it, hence, they were the ones who bought it.
Petitioners filed a motion to dismiss but the RTC dismissed it for lack of merit. They
assert that the Kasunduan is perfected contract of sale, hence, respondents are buyers
in bad faith having bought that portion of the property despite the knowledge of the
prior sale to them.
However, the RTC ruled in favor of respondents. On appeal before the CA, the
appelate court affirmed the decision of the RTC. Hence, this present case.
ISSUE: Whether or not the said Kasunduan is a “mere offer to sell” or a “perfected
contract of sale”?
RULING:
The Court held No.
Under Article 1458 of the Civil Code, a contract of sale is a contract by which one
of the contracting prties 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.
Moreover, Article 1475 of the Code further provides that the contract of sale is
perfected at the moment there is a meeting of the minds upon the thing which is the
object of the contract and upon the price.
In a contract of sale, the title to the property passess to the vendee upon the delivery
of the thing sold, as distinguished from a contract to sell where ownership is reserved
in the vendor and is not to pass to the vendee until the payment of the purchase price.
In the given case, the Kasunduan provides, among others, that the Gloriosos agreed
to sell petitioners a portion of the property and the right of way thereof. However,
no agreement to the manner of payment of purchase price was stated. Hence, the
Kasunduan is a “mere offer to sell” and not a contract of sale since the manner of
payment of purchase price is an essential element of a contract of sale.
Therefore, the Kasunduan is a contract to sell.
Velasco vs. 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 Sps.Domingo v. Reed, G.R. No. 157701, December
being the situation, it cannot, therefore, be said that a definite and firm sales 9, 2005; Ravina v. Villa Abrille, G.R.
agreement between the parties had been perfected over the lot in question. Indeed, No.160708, October 16, 2009
this Court has already ruled before that a definite agreement on the manner of 2. Between Spouses (Arts. 133, 1490, 1492) -
payment of the purchase price is an essential element in the formation of a binding Medina v. Collector, 1 SCRA 302
and enforceable contract of sale.3 The fact, therefore, that the petitioners delivered 3. Applicability to Common-Law Spouses (Art.
to the respondent the sum of P10,000 as part of the down-payment that they had to 133) -
pay cannot be considered as sufficient proof of the perfection of any purchase and Calimlim Canullas v. Fortun,129 SCRA 675 (1984); x
sale agreement between the parties herein under article 1482 of the new Civil Code, Ching v. Goyanko, 506 SCRA 735
as the petitioners themselves admit that some essential matter — the terms of
payment — still had to be mutually covenanted.
C. SCENARIOS INVOLVING CONFLICT OF INTEREST DUE TO TRUST
III. PRICE (1471) RELATIONSHIPS (Arts. 1491 and 1492)

A. Meaning of Price 1. Status of such contracts - Rubias v. Batiller,

51 S 120 (1973).
B. Requisites for valid Price 2. Guardians, agents and administrators- Phil. Trust
Co. v. Roldan, 99 P 39 (1956)
1. The Price Must Be Real - 1471 - 3. Attorneys - Fabillo v. lAC, 195 S 28 (1991).
Mate v. CA, 290 SCRA 463 (1998); 4. Judges
Alino v. Heirs of Lorenzo, 556 SCRA 139
D. SALES BY ADMINISTRATORS/EXECUTORS - Lee v. RTC, G.R.
a) Simulated price - No. 146006,
Manila Banking Corporation v. Silverio 466 SCRA February 23, 2004
438 (2005)
b) Non-payment of price -
Macasaet v. R. Transport Corp., 535 SCRA 503(2007)

2. The Price Must Be in Money or Its Equivalent -

1458, 1468 Republic v. Phil. Resources
Development, 102 Phil. 960 (1958).

3. The Price Must be Certain or Ascertainable at

the Time of Perfection - 1469

C. Manner of Payment of Price must be Agreed Upon -

Edrada v. Ramos, 468 SCRA 597 (2005)
Amado v. Salvador, 540 SCRA 161;
Navarra v. Planters Development Bank, 527 SCRA
562.

D. How Price Determined

E. Gross Inadequacy of Price -1355, 1386, 1470 and 1602.
x Bravo-Guerrero v. Bravo, 465 S 244
(2005)
F. Judicial Sale
G. Rescissible Contracts of Sale
H. Sales With Right to Purchase

IV. Perfection of the Contract (1475-1479)

Cruz vs. Fernando Sr.,477 SCRA 173, December 9,2005
Fule v. CA, 286 SCRA 685 (1998)

1. Perfection - (Arts. 1475)

2. When Deviation Allowed - Villonco v.
Bormacheco, 65 SCRA 352 (1975)
3. Sale by Auction - (Arts. 1476, 1403 (2)(d) &
1326)
4. Earnest Money - (Art. 1482) -
Spouses Doromal, Sr. v. CA, 66 SCRA 575
(1975);
Serrano v. Caguiat, 517 SCRA 57

V.Formalities (Statute of Frauds) 1483-1486, 1403

FORM OF SALES (Arts. 1375, 1358, 1405, 1406 and 1483)
1. Really No Form-
Dalion v. CA, 182 SCRA 872 (1990);
Secuya v. Vda. De Selma, 326 SCRA 244 (2000)
Exceptions: When Form Important - Arts. 1403, 1405 and
1874 -
Limketkai Sons Milling, Inc. v. CA,255 SCRA 6;
Claudel v. CA, 199 SCRA 113 (1991);
Alfredo v. Boras, 404 SCRA 145 (2003);
Xentrex Automotive, Inc. v. CA,291 SCRA 66
(1998).

RA 6552 MACEDA LAW

Registration (Art 1487)

III. PARTIES TO A CONTRACT OF SALE (Arts. 1489 and 1492)

A. MINORS, INSANE AND DEMENTED PERSONS, DEAF-MUTES (Arts.

1327,
1397, 1399)

1. Necessaries (Arts. 1489 and 290)

2. Emancipation (Arts. 399 and 1397, Art 234 and
236, Family Code)

B. SALES BY AND BETWEEN SPOUSES

1. Contracts with Third Parties (Arts. 73,

96, and 124, Family Code)