MELLIZA v.

CITY OF ILOILO 23 SCRA 477

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
there upon 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.
National Grains Authority v. IAC

Facts:

On August 23, 1979, private respondent Leon Soriano offered to sell palay grains to NFA through William
Cabal, the provincial manager in Tuguegarao. The documents submitted were processed, and he was
given a quota of 2,640 cavans, which is the maximum number of cavans he may sell to NFA. On the
same day and on the following day, Soriano delivered 630 cavans, which were no rebagged, classified
and weighed. When he demanded payment, he was told that payment will be held in abeyance since Mr.
Cabal was still investigating on an information received that Soriano was not a bona fide farmer. Instead
of withdrawing the palay, Soriano insisted that the palay grains be delivered and paid. He filed a
complaint for specific performance. Petitioners contend that the delivery was merely made for the purpose
of offering it for sale because until the grains were rebagged, classified and weighed, they are not
considered sold.

Issue:

Whether there was a perfected sale

Held:

Soriano initially offered to sell palay grains produced in his farmland to NFA. When the latter accepted the
offer by noting in Soriano's Farmer's Information Sheet a quota of 2,640 cavans, there was already a
meeting of the 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 that the exact
number of cavans of palay to be delivered has not been determined does not affect the perfection of the
contract. Article 1349 of the New Civil Code provides: ". . .. The fact that the quantity 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 to be sold. Soriano
can deliver so much of his produce as long as it does not exceed 2,640 cavans. From the moment the
contract of sale is perfected, it is incumbent upon the parties to comply with their mutual obligations or
"the parties may reciprocally demand performance" thereof.
 Schuback & Sons vs. CA

Facts:

On October 16, 1981, defendant submitted to plaintiff the list of bus spare parts he wanted to purchase to
its counterpart in Hamburg. Plaintiff sent an offer on the items listed. On December 4, 1981, defendant
informed plaintiff that he preferred genuine to replacement parts, and requested a 15% discount. On
December 17, plaintiff submitted its formal offer. On December 24, defendant submitted a purchase
order, and submitted the quantity on December 29. Plaintiff immediately ordered the items from Schuback
Hamburg, which thereafter ordered the same from NDK, a supplier in Germany. Plaintiff sent a pro-forma
invoice to be used in applying for letter of credit. On February 16, 1982, plaintiff reminded defendant to
open a letter of credit to avoid delay in shipment. Defendant mentioned the difficulty he was encountering
in procuring the same. Plaintiff continued receiving invoices and partial deliveries from NDK. On October
18, 1982, plaintiff again reminded the defendant to open a letter of credit. Defendant replied that he did
not make a valid purchase order and that there was no definite contract between him and the 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. Demand letters sent to defendant by
plaintiff's counsel dated March 22, 1983 and June 9, 1983 were to no avail. Consequently, petitioner filed
a complaint for recovery of actual or compensatory damages, unearned profits, interest, attorney's fees
and costs against private respondent.

Issue:

Whether or not a contract of sale has been perfected between the parties

Held:

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. 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.
YU TEK v. GONZALES

G.R. No. L-9935 February 1, 1915

Trent, J.

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
wit

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.
YU TEK v. GONZALES

G.R. No. L-9935 February 1, 1915

Trent, J.

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.
CONCHITA NOOL and GAUDENCIO ALMOJERA vs.CA

GR No. 116635

July 24, 1997

Facts:

One lot formerly owned by Victorio Nool has an area of 1 hectare. Another lot previously owned by
Francisco Nool has an area of 3.0880 hectares. Spouses (plaintiffs) Conchita Nool and Gaudencio
Almojera alleged that they are the owners of the subject lands. They are in dire need of money, they
obtained a loan DBP , secured by a real estate mortgage on said parcels of land, which were still
registered in the names of Victorino and Francisco Nool, at the time, Since the plaintiffs failed to pay the
said loan, the mortgage was foreclosed; that within the period of redemption, the plaintiffs contacted
Anacleto Nool for the latter to redeem the foreclosed properties from DBP, which the latter did; and as a
result, the titles of the 2 parcels of land in question were transferred to Anacleto; that as part of their
arrangement or understanding, Anacleto agreed to buy from Conchita the 2 parcels of land , for a total
price of P100,000.00, P30,000.00 of which price was paid to Conchita, and upon payment of the balance
of P14,000.00, the plaintiffs were to regain possession of the 2 hectares of land, which amounts spouses
Anacleto Nool and Emilia Nebre failed to pay. Anacleto Nool signed the private writing, agreeing to return
subject lands when plaintiffs have the money to redeem the same; defendant Anacleto having been made
to believe, then, that his sister, Conchita, still had the right to redeem the said properties.

Issue: Is the purchase of the subject lands to Anacleto valid?

Held:

Nono dat quod non habet, No one can give what he does not have; Contract of repurchase inoperative
thus void.

Article 1505 of the Civil Code provides that “where goods are sold by a person who is not the owner
thereof, and who does not sell them under authority or with consent of the owner, the buyer acquires no
better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded
from denying the seller’s authority to sell.” Jurisprudence, on the other hand, teaches us that “a person
can sell only what he owns or is authorized to sell; the buyer can as a consequence acquire no more than
what the seller can legally transfer.” No one can give what he does not have — nono dat quod non habet.
In the present case, there is no allegation at all that petitioners were authorized by DBP to sell the
property to the private respondents. Further, the contract of repurchase that the parties entered into
presupposes that petitioners could repurchase the property that they “sold” to private respondents. As
petitioners “sold” nothing, it follows that they can also “repurchase” nothing. In this light, the contract of
repurchase is also inoperative and by the same analogy, void.
Nool vs. Court of Appeals

Conchita Nool owned a lot which was mortgaged to DBP when she secured a loan. Upon non-payment of
loan it was foreclosed by DBP. Within the time of redemption Conchita contacted Anacleto Nool to
redeem the foreclosed property which the latter did. The titles were transferred to Anacleto but it was
agreed that Conchita can get back the property soon when she has money. Conchita asked the Anacleto
for the return of the property but the latter refused even after the intervention of the barangay. The case
was filed.

Anacleto theorized that the lands were acquired by them from DBP through negotiated sale. He argued
that he was made to believe that the property was still owned by Conchita when they agreed of
redemption.

RTC said it was DBP who was the owner of the property when the sale to Anacleto was made. DBP
became the absolute owner of the property after the redemption period of the foreclosed property had
lapsed. RTC denied the action by Conchita. It was affirmed by CA.

SC: The contract of repurchase entered by Conchita and Anacleto was void there being no subject to
speak of. It is clear that Conchita was no longer the owner of the property when such agreement was
made with Anacleto. It is likewise clear that the seller can no longer deliver the object of the sale to the
buyer, as the buyer had already acquired the title from the rightful owner. Jurisprudence teaches us that a
person can only sell what he owns or is authorized to sell; the buyer can acquire no more than what the
seller can legally transfer.

The right to repurchase presupposes a valid contract of sale between the same parties. CA is decision
AFFIRMED. Petition is DENIED.
Quijada vs CA – Done
Loyola v. CA

Facts:

In dispute is a parcel of land in Binan, originally owned in common by siblings Mariano and Gaudencia
Zarraga. Mariano predeceased her sister, who died without offspring on August 5, 1983, at the age of 97.
Victorina and Cecilia, sisters of Mariano and Gaudencia, are the original plaintiffs in this case, and when
they died, they were substituted by the petitioners who are heirs of Victorina. Cecilia died childless.
Private respondents, some are children of Mariano and some are heirs of Jose Zarraga, are first cousins
of petitioners. Repondents allege that they are the lawful owners of the land, the one-half share inherited
by their father, and the other half purchased from their aunt Gaudencia.

On August 24, 1980, Gaudencia allegedly sold her share to private respondents, evidenced by a
notarised document entitled “Bilihang Tuluyan ng Kalahati ng Isang Lagay na Lupa”. A TCT was
eventually issued. On January 31, 1985, Victorina and Cecilia filed a complaint for the purpose of
annulling the sale and the TCT. The trial court rendered judgment in their favor, but such was reversed by
the Court of Appeals.

Issue:

Whether the alleged sale between Gaudencia and respondents is valid

Held:

Petitioners vigorously assail the validity of the execution of the deed of absolute sale suggesting that
since the notary public who prepared and acknowledged the questioned Bilihan did not personally know
Gaudencia, the execution of the deed was suspect. The rule is that a notarized document carries the
evidentiary weight conferred upon it with respect to its due execution, and documents acknowledged
before a notary public have in their favor the presumption of regularity. By their failure to overcome this
presumption, with clear and convincing evidence, petitioners are estopped from questioning the regularity
of the execution of the deed.

Petitioners suggest that all the circumstances lead to the conclusion that the deed of sale was simulated.
Simulation is "the declaration of a fictitious will, deliberately made by agreement of the parties, in order to
produce, for the purposes of deception, the appearances of a juridical act which does not exist or is
different what that which was really executed." Characteristic of simulation is that the apparent contract is
not really desired or intended to produce legal effect or in any way alter the juridical situation of the
parties. Perusal of the questioned deed will show that the sale of the property would convert the co-
owners to vendors and vendees, a clear alteration of the juridical relationships. This is contrary to the
requisite of simulation that the apparent contract was not really meant to produce any legal effect. Also in
a simulated contract, the parties have no intention to be bound by the contract. But in this case, the
parties clearly intended to be bound by the contract of sale, an intention they did not deny.The requisites
for simulation are: (a) an outward declaration of will different from the will of the parties; (b) the false
appearance must have been intended by mutual agreement; and (c) the purpose is to deceive third
persons. None of these are present in the assailed transaction.

Petitioners fault the Court of Appeals for not considering that at the time of the sale in 1980, Gaudencia
was already 94 years old; that she was already weak; that she was living with private respondent
Romana; and was dependent upon the latter for her daily needs, such that under these circumstances,
fraud or undue influence was exercised by Romana to obtain Gaudencia's consent to the sale. The rule
on fraud is that it is never presumed, but must be both alleged and proved. For a contract to be annulled
on the ground of fraud, it must be shown that the vendor never gave consent to its execution. If a
competent person has assented to a contract freely and fairly, said person is bound. There also is a
disputable presumption, that private transactions have been fair and regular. Applied to contracts, the
presumption is in favor of validity and regularity. In this case, the allegation of fraud was unsupported, and
the presumption stands that the contract Gaudencia entered into was fair and regular.

Petitioners also claim that since Gaudencia was old and senile, she was incapable of independent and
clear judgment. However, a person is not incapacitated to contract merely because of advanced years or
by reason of physical infirmities. Only when such age or infirmities impair his mental faculties to such
extent as to prevent him from properly, intelligently, and fairly protecting his property rights, is he
considered incapacitated. Petitioners show no proof that Gaudencia had lost control of her mental
faculties at the time of the sale. The notary public who interviewed her, testified that when he talked to
Gaudencia before preparing the deed of sale, she answered correctly and he was convinced that
Gaudencia was mentally fit and knew what she was doing.
Loyala v CA

GR No. 115734, 23 Feb 2000

Quisumbing, J.:

FACTS:

Victorina Zarraga vda. de Loyola and Cecilia Zarraga, are sisters of Gaudencia and Mariano.
Victorina died on October 18, 1989, while Civil Case No. B-2194 was pending with the trial court. Cecilia
died on August 4, 1990, unmarried and childless. Victorina and Cecilia were substituted by petitioners as
plaintiffs. Private respondents, children of Mariano excepting those denominated as the "Heirs of Jose
Zarraga," are first cousins of petitioners. Respondents designated as the "Heirs of Jose Zarraga" are first
cousins once removed of the petitioners. Private respondents allege that they are the lawful owners of Lot
115-A-1, the one-half share inherited by their father, Mariano and the other half purchased from their
deceased aunt, Gaudencia. Transfer Certificate of Title No. 116067 was issued in their names covering
Lot 115-A-1.

The present controversy began on August 24, 1980, nearly three years before the death of Gaudencia
while G.R. No. 59529 was still pending before this Court. On said date, Gaudencia allegedly sold to
private respondents her share in Lot 115-A-1 for P34,000.00. The sale was evidenced by a notarized
document denominated as "Bilihang Tuluyan ng Kalahati (1/2) ng Isang Lagay na Lupa." Romualdo, the
petitioner in G.R. No. 59529, was among the vendees.

ISSUE:

Whether or not the contract was simulated.

HELD:

No. The Supreme Court ruled that Simulation is "the declaration of a fictitious will, deliberately
made by agreement of the parties, in order to produce, for the purposes of deception, the appearances of
a juridical act which does not exist or is different what that which was really executed." The parties clearly
intended to be bound by the contract of sale, an intention they did not deny. The requisites for simulation
are: (a) an outward declaration of will different from the will of the parties; (b) the false appearance must
have been intended by mutual agreement; and (c) the purpose is to deceive third persons.

The rule on fraud is that it is never presumed, but must be both alleged and proved. For a contract
to be annulled on the ground of fraud, it must be shown that the vendor never gave consent to its
execution. If a competent person has assented to a contract freely and fairly, said person is bound. There
also is a disputable presumption, that private transactions have been fair and regular. Applied to
contracts, the presumption is in favor of validity and regularity. Also, to prove that there is undue
influence, the party assailing must prove a confidential relationship from which undue influence may arise,
the relationship must reflect a dominant, overmastering influence which controls over the dependent
person.