Pichel v. Alonzo [G.R. No. L-36902. January 30, 1982.
] Things having potential existence may be the object of the contract of sale
Facts: Prudencio Alonzo was awarded by the Government that parcel of land designated
as Lot 21 of Subdivision Plan Psd-32465 of Balactasan, Lamitan, Basilan City in
accordance with RA 477. The award was cancelled by the Board of Liquidators on 27
January 1965 on the ground that, previous thereto, Alonzo was proved to have alienated
the land to another, in violation of law. In 1972, Alonzo’s rights to the land were
reinstated. On 14 August 1968, Alonzo and his wife sold to Pichel through a “deed of
sale” all the fruits of the coconut trees which may be harvested in the land for the
period, from 15 September 1968 to 1 January 1976, in consideration of P4,200.00. It
was further stipulated that the vendor’s right, title, interest and participation herein
conveyed is of his own exclusive and absolute property, free from any liens and
encumbrances and he warrants to the Vendee good title thereto and to defend the same
against any and all claims of all persons whomsoever. Even as of the date of sale,
however, the land was still under lease to one Ramon Sua, and it was the agreement
that part of the consideration of the sale, in the sum of P3,650.00, was to be paid by
Pichel directly to Ramon Sua so as to release the land from the clutches of the latter.
Pending said payment Alonzo refused to allow the Pichel to make any harvest. In July
1972, Pichel for the first time since the execution of the deed of sale in his favor, caused
the harvest of the fruit of the coconut trees in the land.
Alonzo filed an action for the annulment of a “Deed of Sale” before the CFI Basilan City.
On 5 January 1973, the lower court rendered its decision holding that although the
agreement in question is denominated by the parties as a deed of sale of fruits of the
coconut trees found in the vendor’s land, it actually is, for all legal intents and purposes,
a contract of lease of the land itself; an encumbrance prohibited under RA 477. The court
thus held that the deed of sale is null and void, and ordered Alonzo to pay back Pichel
the consideration of the sale in the sum of P4,200 with interests from the date of the
filing of the complaint until paid, and Pichel to pay the sum of P500.00 as attorney’s
fees; with costs against Pichel. Hence, the petition to review on certiorari was raised
before the Supreme Court.
The Supreme Court set aside the judgment of the lower court and entered another
dismissing the complaint; without costs.
Held: Contract of sale valid, essential elements valid
The document in question expresses a valid contract of sale as it has the essential
elements of a contract of sale as defined under Article 1458 of the New Civil Code. Article
1458 provides that “by the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and the other to
pay therefor a price certain in money or its equivalent,” and that “a contract of sale may
be absolute or conditional.” The subject matter of the contract of sale are the fruits of
the coconut trees on the land during the years from 15 September 1968 up to 1 January
1976, which subject matter is a determinate thing.
Under Article 1461 of the New Civil Code, things having a potential existence may be the
object of the contract of sale. A valid sale may be made of a thing, which though not yet
actually in 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, and the 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 possessed. He may make a valid
sale of the wine that a vineyard is expected to produce; or the grain a fieldmay grow in a
given time; or the milk a cow may yield during the coming year; or the wool that shall
thereafter grow upon 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 good will of a trade
and the like. The thing sold, however, must be specific and identified. They must be also
owned at the time by the vendor (Hull vs. Hull, 48 Conn., 250; 40 Am. Rep., 165)” pp.
522-523). Thus, pending crops which have potential existence may be the subject
matter of sale (Sibal vs. Valdez, 50 Phil. 512).
Pichel v. Alonzo [G.R. No. L-36902. January 30, 1982.]
First Division, Guerrero (J): 5 concur
Facts: Prudencio Alonzo was awarded by the Government that parcel of land designated
as Lot 21 of Subdivision Plan Psd-32465 of Balactasan, Lamitan, Basilan City in
accordance with RA 477. The award was cancelled by the Board of Liquidators on 27
January 1965 on the ground that, previous thereto, Alonzo was proved to have alienated
the land to another, in violation of law. In 1972, Alonzo’s rights to the land were
reinstated. On 14 August 1968, Alonzo and his wife sold to Pichel through a “deed of
sale” all the fruits of the coconut trees which may be harvested in the land for the
period, from 15 September 1968 to 1 January 1976, in consideration of P4,200.00. It
was further stipulated that the vendor’s right, title, interest and participation herein
conveyed is of his own exclusive and absolute property, free from any liens and
encumbrances and he warrants to the Vendee good title thereto and to defend the same
against any and all claims of all persons whomsoever. Even as of the date of sale,
however, the land was still under lease to one Ramon Sua, and it was the agreement
that part of the consideration of the sale, in the sum of P3,650.00, was to be paid by
Pichel directly to Ramon Sua so as to release the land from the clutches of the latter.
Pending said payment Alonzo refused to allow the Pichel to make any harvest. In July
1972, Pichel for the first time since the execution of the deed of sale in his favor, caused
the harvest of the fruit of the coconut trees in the land.
Alonzo filed an action for the annulment of a “Deed of Sale” before the CFI Basilan City.
On 5 January 1973, the lower court rendered its decision holding that although the
agreement in question is denominated by the parties as a deed of sale of fruits of the
coconut trees found in the vendor’s land, it actually is, for all legal intents and purposes,
1
a contract of lease of the land itself; an encumbrance prohibited under RA 477. The court
thus held that the deed of sale is null and void, and ordered Alonzo to pay back Pichel
the consideration of the sale in the sum of P4,200 with interests from the date of the
filing of the complaint until paid, and Pichel to pay the sum of P500.00 as attorney’s
fees; with costs against Pichel. Hence, the petition to review on certiorari was raised
before the Supreme Court.
The Supreme Court set aside the judgment of the lower court and entered another
dismissing the complaint; without costs.
1. Vendor grantee under RA 477, and could exercise all the rights pertaining
thereto, following ruling in Ras v. Sua
In Ras vs. Sua, it was categorically stated that a cancellation of an award granted
pursuant to the provisions of RA 477 does not automatically divest the awardee of his
rights to the land. Such cancellation does not result in the immediate reversion of the
property subject of the award, to the State. Until and unless an appropriate proceeding
for reversion is instituted by the State, and its reacquisition of the ownership and
possession of the land decreed by a competent court, the grantee cannot be said to have
been divested of whatever right that he may have over the same property. In the
present case, there is nothing in the record to show that at any time after the supposed
cancellation of the award on 27 January 1965, reversion proceedings against Lot 21 were
instituted by the State. Instead, the admitted fact is that the award was reinstated in
1972. Applying the doctrine announced in the Ras case, therefore, Alonzo is not deemed
to have lost any of his rights as grantee of Lot 21 under RA 477 during the period
material to the present case, i.e., from the cancellation of the award in 1965 to its
reinstatement in 1972. Within said period, Alonzo could exercise all the rights pertaining
to a grantee with respect to Lot 21.
2. Court to apply the contract according to its express terms
The first and fundamental duty of the courts is the application of the contract according
to its express terms, interpretation being resorted to only when such literal application is
impossible.
3. Contract clear and unequivocal; Construction or interpretation of document
not called for
Construction or interpretation of the document in question is not called for. A perusal of
the deed fails to disclose any ambiguity or obscurity in its provisions, nor is there doubt
as to the real intention of the contracting parties. The terms of the agreement are clear
and unequivocal, hence the literal and plain meaning thereof should be observed. Such is
the mandate of the Civil Code of the Philippines which provides that “if the terms of a
contract are clear and leave no doubt upon the intention of the contracting parties, the
literal meaning of its stipulation shall control.” In the present case, the “Deed of Sale”
dated 14 August 1968 is precisely what it purports to be. It is a document evidencing the
agreement of herein parties for the sale of coconut fruits of Lot 21, and not for the lease
of the land itself. In clear and express terms, the document defines the object of the
contract thus: “the herein sale of coconut fruits are for all the fruits on the
aforementioned parcel of land during the years from 15 September 1968; up to 1
January 1976.”
4. Contract of sale valid, essential elements valid
The document in question expresses a valid contract of sale as it has the essential
elements of a contract of sale as defined under Article 1458 of the New Civil Code. Article
1458 provides that “by the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and the other to
pay therefor a price certain in money or its equivalent,” and that “a contract of sale may
be absolute or conditional.” The subject matter of the contract of sale are the fruits of
the coconut trees on the land during the years from 15 September 1968 up to 1 January
1976, which subject matter is a determinate thing.
5. Things having potential existence may be the object of the contract of sale
Under Article 1461 of the New Civil Code, things having a potential existence may be the
object of the contract of sale. A valid sale may be made of a thing, which though not yet
actually in 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, and the 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 possessed. He may make a valid
sale of the wine that a vineyard is expected to produce; or the grain a fieldmay grow in a
given time; or the milk a cow may yield during the coming year; or the wool that shall
thereafter grow upon 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 good will of a trade
and the like. The thing sold, however, must be specific and identified. They must be also
owned at the time by the vendor (Hull vs. Hull, 48 Conn., 250; 40 Am. Rep., 165)” pp.
522-523). Thus, pending crops which have potential existence may be the subject
matter of sale (Sibal vs. Valdez, 50 Phil. 512).
6. Contract of sale and lease of things distinguished
The essential difference between a contract of sale and a lease of things is that the
delivery of the thing sold transfers ownership, while in lease no such transfer of
ownership results as the rights of the lessee are limited to the use and enjoyment of the
thing leased. In the present case, the lower court’s holding that the contract in question
fits the definition of a lease of things wherein one of the parties binds himself to give to
another the enjoyment or use of a thing for a price certain and for a period which may
be definite or indefinite (Art. 1643, Civil Code of the Philippines) is erroneous.
7. Contract of lease, enjoyment of property
Article 1543 of the Civil Code defines the contract of lease as the giving or the
concession of the enjoyment or use of a thing for a specified time and fixed price, and
since such contract is a form of enjoyment of the property, it is evident that it must be
2
regarded as one of the means of enjoyment referred to in said Article 398, inasmuch as
the terms enjoyment, use, and benefit involve the same and analogous meaning relative
to the general utility of which a given thing is capable. (104 Jurisprudencia Civil, 443;
Rodriguez vs. Borromeo, 43 Phil. 479, 490).
8. Transfer of accessory does not transfer principal
The possession and enjoyment of the coconut trees cannot be said to be the possession
and enjoyment of the land itself because these rights are distinct and separate from each
other, the first pertaining to the accessory or improvements (coconut trees) while the
second, to the principal (the land). A transfer of the accessory or improvement is not a
transfer of the principal. It is the other way around, the accessory follows the principal.
In the present case, the sale of the nuts cannot be interpreted nor construed to be a
lease of the trees, much less extended further to include the lease of the land itself. In
cannot be said that the possession and enjoyment of the coconut trees to be the
possession and enjoyment of the land itself because the lessee in order to enjoy his right
under the contract, he actually takes possession of the land, at least during harvest time,
gathers all of the fruits of the coconut trees in the land, and gains exclusive use thereof
without the interference or intervention of the lessor.
9. Grantee under RA 477 not prohibited to sell the natural/industrial fruits of
the land awarded to him
The grantee of a parcel of land under RA 477 is not prohibited from alienating or
disposing of the natural and/or industrial fruits of the land awarded to him, pursuant to
the terms of the first paragraph of Section 8. What the law expressly disallows is the
encumbrance or alienation of the land itself or any of the permanent improvements
thereon. Permanent improvements on a parcel of land are things incorporated or
attached to the property in a fixed manner, naturally or artificially. They include
whatever is built, planted or sown on the land which is characterized by fixity,
immutability or immovability. Houses, buildings, machinery, animal houses, trees and
plants would fall under the category of permanent improvements, the alienation or
encumbrance of which is prohibited by RA 477. While coconut trees are permanent
improvements of a land, their nuts are natural or industrial fruits which are meant to be
gathered or severed from the trees, to be used, enjoyed, sold or otherwise disposed of
by the owner of the land. Hence, the grantee of Lot 21 had the right and prerogative to
sell the coconut fruits of the trees growing on the property.
10. Purpose of RA 477, and Section 8 thereof
By virtue of RA 477, bona fide occupants, veterans, members of guerilla organizations
and other qualified persons were given the opportunity to acquire government lands by
purchase, taking into account their limited means. It was intended for these persons to
make good and productive use of the lands awarded to them, not only to enable them to
improve their standard of living, but likewise to help provide for the annual payments to
the Government of the purchase price of the lots awarded to them. Section 8 was
included to protect the grantees “from themselves and the incursions of opportunists
who prey on their misery and poverty.” It is there to insure that the grantees themselves
benefit from their respective lots, to the exclusion of other persons.
11. Legislature does not intend to prohibit the grantee from selling natural
and industrial fruits of his land
The purpose of the law is not violated when a grantee sells the produce or fruits of his
land. On the contrary, the aim of the law is thereby achieved, for the grantee is
encouraged and induced to be more industrious and productive, thus making it possible
for him and his family to be economically self-sufficient and to lead a respectable life. At
the same time, the Government is assured of payment on the annual installments on the
land. It could not have been the intention of the legislature to prohibit the grantee from
selling the natural and industrial fruits of his land, for otherwise, it would lead to an
absurd situation wherein the grantee would not be able to receive and enjoy the fruits of
the property in the real and complete sense.
12. Party cannot impugn the validity of the contract after receiving the
consideration for the sale
The vendor-grantee, after having received the consideration for the sale of his coconut
fruits, cannot be allowed to impugn the validity of the contracts he entered into, to the
prejudice of petitioner who contracted in good faith and for a consideration. The vendor
cannot claim that he has the “privilege to change his mind and claim it as (an) implied
lease,” and he has the “legitimate right” to file an action for annulment “which no law
can stop” as there is a perfected and valid contract.
13. Grant of attorney’s fees not justified
Article 2208 of the Civil Code provides that “in the absence of stipulation, attorney’s fees
and expenses of litigation, other than judicial costs, cannot be recovered, except (1)
When exemplary damages are awarded; (2) When the defendant’s act or omission has
compelled the plaintiff to litigate with third persons or to incur expenses to protect his
interest; (3) In criminal cases of malicious prosecution against the plaintiff; (4) In case
of a clearly unfounded civil action or proceeding against the plaintiff; (5) Where the
defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly
valid, just and demandable claim; (6) In actions for legal support; (7) In actions for the
recovery of wages of household helpers, laborers and skilled workers; (8) In actions for
indemnity under workmen’s compensation and employer’s liability laws; (9) In a
separate civil action to recover civil liability arising from a crime; (10) When at least
double judicial costs are awarded; (11) In any other case where the court deems it just
and equitable that attorney’s fees and expenses of litigation should be recovered. In all
cases, the attorney’s fees and expenses of litigation must be reasonable.” None of the
legal grounds enumerated exists to justify or warrant the grant of attorney’s fees.
3
Yu Tek v. Gonzales [G.R. No. 9935. February 1, 1915.]
First Division, Trent (J): 4 concur, 1 dissents
Facts: A written contract was executed between Basilio Gonzalez and Yu Tek and Co.,
where Gonzales was obligated to deliver 600 piculs of sugar of the 1st and 2nd grade to
Yu Tek, within the period of 3 months (1 January-31 March 1912) at any place within the
municipality of Sta. Rosa, which Yu Tek & Co. or its representative may designate; and in
case, Gonnzales does not deliver, the contract will be rescinded and Gonzales shall be
obligated to return the P3,000 received and also the sum of P1,200 by way of indemnity
for loss and damages. No sugar had been delivered to Yu Tek & Co. under this contract
nor had it been able to recover the P3,000. Yu Tek & Co. filed a complaint against
Gonzales, and prayed for judgment for the P3,000 and the additional P1,200. Judgment
was rendered for P3,000 only, and from this judgment both parties appealed.
The Supreme Court affirmed the judgment appealed from with the modification allowing
the recovery of P1,200 under paragraph 4 of the contract, without costs.
1. Rights determined by the writing itself
Parties are presumed to have reduced to writing all the essential conditions of their
contract. The rights of the parties must be determined by the writing itself.
2. Parol evidence not admissible as it should not serve to incorporate
additional conditions into a contract
While parol evidence is admissible in a variety of ways to explain the meaning of written
contracts, it cannot serve the purpose of incorporating into the contract additional
contemporaneous conditions which are not mentioned at all in the writing, unless there
has been fraud or mistake. In the present case, Gonzales alleged that the court erred in
refusing to permit parol evidence showing that the parties intended that the sugar was to
be secured from the crop which the defendant raised on his plantation, and that he was
unable to fulfill the contract by reason of the almost total failure of his crop. The case
appears to be one to which the rule which excludes parol evidence to add to or vary the
terms of a written contract is decidedly applicable. There is not the slightest intimation in
the contract that the sugar was to be raised by Gonzales. In the contract, Gonzales
undertook to deliver a specified quantity of sugar within a specified time. The contract
placed no restriction upon him in the matter of obtaining the sugar, as he was at liberty
to purchase it on the market or raise it himself, notwithstanding that he owned a
plantation himself.
3. Cases where parol evidence was denied by the Court
In Pastor v. Gaspar (2 Phil 592) the Court declined to allow parol evidence showing that
a party to a written contract was to become a partner in a firm instead of a creditor of
the firm. In Eveland vs. Eastern Mining Co. (14 Phil 509) a contract of employment
provided that the plaintiff should receive from the defendant a stipulated salary and
expenses The defendant in said case sought to interpose as a defense to recovery that
the payment of the salary was contingent upon the plaintiff’s employment redounding to
the benefit of the defendant company. The contract contained no such condition and the
court declined to receive parol evidence thereof.
4. Perfected contract of sale defined; Relief for non-delivery
Article 1450 defines a perfected sale as follows: “The sale shall be perfected between
vendor and vendee and shall be binding on both of them, if they have agreed upon the
thing which is the object of the contract and upon the price, even when neither has been
delivered.” Article 1452 provides that “the injury to or the profit of the thing sold shall,
after the contract has been perfected, be governed by the provisions of articles 1096 and
1182.” There is a perfected sale with regard to the “thing” whenever the article of sale
has been physically segregated from all other articles.
6. Perfected sale; Cases
In McCullough vs. Aenlle & Co. (3 Phil 285), a particular tobacco factory with its contents
was held sold under a contract which did not provide for either delivery of the price or of
the thing until a future time. In Barretto vs. Santa Marina (26 Phil 200), specified shares
of stock in a tobacco factory were held sold by a contract which deferred delivery of both
the price and the stock until the latter had been appraised by an inventory of the entire
assets of the company. In Borromeo vs. Franco (5 Phil. Rep., 49) a sale of a specific
house was held perfected between the vendor and vendee, although the delivery of the
price was withheld until the necessary documents of ownership were prepared by the
vendee. In Tan Leonco vs. Go Inqui (8 Phil. Rep., 531) the plaintiff had delivered a
quantity of hemp into the warehouse of the defendant. The defendant drew a bill of
exchange in the sum of P800, representing the price which had been agreed upon for the
hemp thus delivered. Prior to the presentation of the bill for payment, in said case, the
hemp was destroyed. Whereupon, the defendant suspended payment of the bill. It was
held that the hemp having been already delivered, the title had passed and the loss was
the vendee’s. It is our purpose to distinguish the case at bar from all these cases.
7. Contract in present case merely an executory agreement: a promise of sale
and not a sale
The contract in the present case was merely an executory agreement; a promise of sale
and not a sale. As there was no perfected sale, it is clear that articles 1452, 1096, and
1182 are not applicable. The agreement upon the “thing” which was the object of the
contract was not within the meaning of article 1450. Sugar is one of the staple
commodities of this country. For the purpose of sale its bulk is weighed, the customary
unit of weight being denominated a ‘’picul.'’ There was no delivery under the contract. If
called upon to designate the article sold, it is clear that Gonzales 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.
8. Present case different from cases cited with perfected contracts
The contract in the present case is different from the contracts discussed in the cases
referred to. In the McCullough case, for instance, the tobacco factory which the parties
4
dealt with was specifically pointed out and distinguished from all other tobacco factories.
So, in the Barretto case, the particular shares of stock which the parties desired to
transfer were capable of designation. In the Tan Leonco case, where a quantity of hemp
was the subject of the contract, it was shown that quantity had been deposited in a
specific warehouse, and thus set apart and distinguished from all other hemp.
9. American jurisprudence; Executory contracts
In Witt Shoe Co. vs. Seegars & Co. (122 La., 145; 47 Sou., 444), a contract was entered
into by a traveling salesman for a quantity of shoes, the sales having been made by
sample. Since Mitchell was offering to sell by sample shoes, part of which had not been
manufactured and the rest of which were incorporated in Witt Shoe Co.’s stock in
Lynchburg, Va., it was impossible that he and Seegars & Co. should at that time have
agreed upon the specific objects, the title to which was to pass, and hence there could
have been no sale.
In State vs. Shields, et al. (110 La., 547, 34 Sou., 673), it was held that in receiving an
order for a quantity of goods, of a kind and at a price agreed on, to be supplied from a
general stock, warehoused at another place, the agent receiving the order merely enters
into an executory contract for the sale of the goods, which does not divest or transfer
the title of any determinate object, and which becomes effective for that purpose only
when specific goods are thereafter appropriated to the contract; and, in the absence of a
more specific agreement on the subject, that such appropriation takes place only when
the goods as ordered are delivered to the public carriers at the place from which they are
to be shipped, consigned to the person by whom the order is given, at which time and
place, therefore, the sale is perfected and the title passes.”
10. American jurisprudence: Recovery of payment; Applicability to present
case
In Larue & Prevost vs. Rugely, Blair & Co. (10 La. Ann., 242), the defendants therein had
made a contract for the sale, by weight, of a lot of cotton, had received $3,000 on
account of the price, and had given an order for its delivery, which had been presented
to the purchaser, and recognized by the press in which the cotton was stored, but that
the cotton had been destroyed by fire before it was weighed. It was held that it was still
at the risk of the seller, and that the buyer was entitled to recover the $3,000 paid on
account of the price. Similarly, in the present case, Gonzales having defaulted in his
engagement, Yu Tek & Co. is entitled to recover the P3,000 which it advanced to
Gonzales.
11. Contracting parties free to stipulate; Stipulation clear, no room for
interpretation; Liquidated damage
The contract plainly states that if Gonzales fails to deliver the 600 piculs of sugar within
the time agreed on, the contract will be rescinded and he will be obliged to return the
P3,000 and pay the sum of P1,200 by way of indemnity for loss and damages. There
cannot be the slightest doubt about the meaning of this language or the intention of the
parties. There is no room for either interpretation or construction. Under the provisions
of article 1255 of the Civil Code contracting parties are free to execute the contracts that
they may consider suitable, provided they are not in contravention of law, morals, or
public order. In our opinion there is nothing in the contract under consideration which is
opposed to any of these principles. Thus, this is a clear case of liquidated damages.
Melliza v. Iloilo City [G.R. No. L-24732. April 30, 1968.]
Facts: Juliana Melliza during her lifetime owned, among other properties, 3 parcels of
residential land in Iloilo City (OCT 3462). Said parcels of land were known as Lots Nos.
2, 5 and 1214. The total area of Lot 1214 was 29,073 sq. m. On 27 November 1931 she
donated to the then Municipality of Iloilo, 9,000 sq. m. of Lot 1214, to serve as site for
the municipal hall. The donation was however revoked by the parties for the reason that
the area donated was found inadequate to meet the requirements of the development
plan of the municipality, the so- called “Arellano Plan.” Subsequently, Lot 1214 was
divided by Certeza Surveying Co., Inc. into Lots 1214-A and 1214-B. And still later, Lot
1214-B was further divided into Lots 1214-B-1, Lot 1214-B-2 and Lot 1214-B-3. As
approved by the Bureau of Lands, Lot 1214-B-1, with 4,562 sq. m., became known as
Lot 1214-B; Lot 1214-B-2, with 6,653 sq. m., was designated as Lot 1214-C; and Lot
1214-B-3, with 4,135 sq. m., became Lot 1214-D. On 15 November 1932, Juliana Melliza
executed an instrument without any caption providing for the absolute sale involving all
of lot 5, 7669 sq. m. of Lot 2 (sublots 2-B and 2-C), and a portion of 10,788 sq. m. of
Lot 1214 (sublots 1214-B2 and 1214-B3) in favor of the Municipal Government of Iloilo
for the sum of P6,422; these lots and portions being the ones needed by the municipal
government for the construction of avenues, parks and City hall site according the
“Arellano plan.” On 14 January 1938, Melliza sold her remaining interest in Lot 1214 to
Remedios Sian Villanueva (thereafter TCT 18178). Remedios in turn on 4 November
1946 transferred her rights to said portion of land to Pio Sian Melliza (thereafter TCT
2492). Annotated at the back of Pio Sian Melliza’s title certificate was the following “that
a portion of 10,788 sq. m. of Lot 1214 now designated as Lots 1412-B-2 and 1214-B-3
of the subdivision plan belongs to the Municipality of Iloilo as per instrument dated 15
November 1932.” On 24 August 1949 the City of Iloilo, which succeeded to the
Municipality of Iloilo, donated the city hall site together with the building thereon, to the
University of the Philippines (Iloilo branch). The site donated consisted of Lots 1214-B,
1214-C and 1214-D, with a total area of 15,350 sq. m., more or less. Sometime in 1952,
the University of the Philippines enclosed the site donated with a wire fence. Pio Sian
Melliza thereupon made representations, thru his lawyer, with the city authorities for
payment of the value of the lot (Lot 1214-B). No recovery was obtained, because as
alleged by Pio Sian Melliza, the City did not have funds. 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 10 December 1955 Pio Sian Melizza filed an action in the CFI Iloilo against Iloilo City
and the University of the Philippines for recovery of Lot 1214-B or of its value. After
stipulation of facts and trial, the CFI rendered its decision on 15 August 1957, dismissing
the complaint. Said court ruled that the instrument executed by Juliana Melliza in favor
of Iloilo municipality included in the conveyance Lot 1214-B, and thus it held that Iloilo
5
City had the right to donate Lot 1214-B to UP. Pio Sian Melliza appealed to the Court of
Appeals. On 19 May 1965, the CA affirmed the interpretation of the CFI 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. Nonetheless, it ordered the remand of the case for
reception of evidence to determine the area actually taken by Iloilo City for the
construction of avenues, parks and for city hall site. Hence, the appeal by Pio San Melliza
to the Supreme Court.
The Supreme Court affirmed the decision appealed from insofar as it affirms that of the
CFI, and dismissed the complaint; without costs.
Held: Requirement, that sale must have a determinate thing as object, is
fulfilled if object of sale is capable of being made determinate at the time of the
contract
The requirement of the law that a sale must have for its object a determinate thing, is
fulfilled as long as, at the time the contract is entered into, the object of the sale is
capable of being made determinate without the necessity of a new or further agreement
between the parties (Art. 1273, old Civil Code; Art. 1460, New Civil Code). The specific
mention of some of the lots plus the statement that the lots object of the sale are the
ones needed for city hall site; avenues and parks, according to the 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.
Melliza v. Iloilo City [G.R. No. L-24732. April 30, 1968.]
En Banc, Bengzon JP (J): 8 concur, 1 on leave
Facts: Juliana Melliza during her lifetime owned, among other properties, 3 parcels of
residential land in Iloilo City (OCT 3462). Said parcels of land were known as Lots Nos.
2, 5 and 1214. The total area of Lot 1214 was 29,073 sq. m. On 27 November 1931 she
donated to the then Municipality of Iloilo, 9,000 sq. m. of Lot 1214, to serve as site for
the municipal hall. The donation was however revoked by the parties for the reason that
the area donated was found inadequate to meet the requirements of the development
plan of the municipality, the so- called “Arellano Plan.” Subsequently, Lot 1214 was
divided by Certeza Surveying Co., Inc. into Lots 1214-A and 1214-B. And still later, Lot
1214-B was further divided into Lots 1214-B-1, Lot 1214-B-2 and Lot 1214-B-3. As
approved by the Bureau of Lands, Lot 1214-B-1, with 4,562 sq. m., became known as
Lot 1214-B; Lot 1214-B-2, with 6,653 sq. m., was designated as Lot 1214-C; and Lot
1214-B-3, with 4,135 sq. m., became Lot 1214-D. On 15 November 1932, Juliana Melliza
executed an instrument without any caption providing for the absolute sale involving all
of lot 5, 7669 sq. m. of Lot 2 (sublots 2-B and 2-C), and a portion of 10,788 sq. m. of
Lot 1214 (sublots 1214-B2 and 1214-B3) in favor of the Municipal Government of Iloilo
for the sum of P6,422; these lots and portions being the ones needed by the municipal
government for the construction of avenues, parks and City hall site according the
“Arellano plan.” On 14 January 1938, Melliza sold her remaining interest in Lot 1214 to
Remedios Sian Villanueva (thereafter TCT 18178). Remedios in turn on 4 November
1946 transferred her rights to said portion of land to Pio Sian Melliza (thereafter TCT
2492). Annotated at the back of Pio Sian Melliza’s title certificate was the following “that
a portion of 10,788 sq. m. of Lot 1214 now designated as Lots 1412-B-2 and 1214-B-3
of the subdivision plan belongs to the Municipality of Iloilo as per instrument dated 15
November 1932.” On 24 August 1949 the City of Iloilo, which succeeded to the
Municipality of Iloilo, donated the city hall site together with the building thereon, to the
University of the Philippines (Iloilo branch). The site donated consisted of Lots 1214-B,
1214-C and 1214-D, with a total area of 15,350 sq. m., more or less. Sometime in 1952,
the University of the Philippines enclosed the site donated with a wire fence. Pio Sian
Melliza thereupon made representations, thru his lawyer, with the city authorities for
payment of the value of the lot (Lot 1214-B). No recovery was obtained, because as
alleged by Pio Sian Melliza, the City did not have funds. 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 10 December 1955 Pio Sian Melizza filed an action in the CFI Iloilo against Iloilo City
and the University of the Philippines for recovery of Lot 1214-B or of its value. After
stipulation of facts and trial, the CFI rendered its decision on 15 August 1957, dismissing
the complaint. Said court ruled that the instrument executed by Juliana Melliza in favor
of Iloilo municipality included in the conveyance Lot 1214-B, and thus it held that Iloilo
City had the right to donate Lot 1214-B to UP. Pio Sian Melliza appealed to the Court of
Appeals. On 19 May 1965, the CA affirmed the interpretation of the CFI 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. Nonetheless, it ordered the remand of the case for
reception of evidence to determine the area actually taken by Iloilo City for the
construction of avenues, parks and for city hall site. Hence, the appeal by Pio San Melliza
to the Supreme Court.
The Supreme Court affirmed the decision appealed from insofar as it affirms that of the
CFI, and dismissed the complaint; without costs.
1. Interpretation of contract involves question of law
The interpretation of the public instrument dated 15 November 1932 involves a question
of law, since the contract is in the nature of law as between the parties and their
successors in interest.
2. Intent of the parties as to the object of the public instrument
The paramount intention of the parties was to provide Iloilo municipality with lots
sufficient or adequate in area for the construction of the Iloilo City hall site, with its
avenues and parks. For this matter, a previous donation for this purpose between the
same parties was revoked by them, because of inadequacy of the area of the lot
6
donated. Said instrument described 4 parcels of land by their lot numbers and area; and
then it goes on to further describe, not only those lots already mentioned, but the lots
object of the sale, by stating that said lots were the ones needed for the construction of
the city hall site, avenues and parks according to the Arellano plan. If the parties
intended merely to cover the specified lots (Lots 2, 5, 1214-C and 1214-D), there would
scarcely have been any need for the next paragraph, since these lots were already
plainly and very clearly described by their respective lot number and areas. Said next
paragraph does not really add to the clear description that was already given to them in
the previous one. It is therefore the more reasonable interpretation to view it as
describing those other portions of land contiguous to the lots that, by reference to the
Arellano plan, will be found needed for the purpose at hand, the construction of the city
hall site.
3. Requirement, that sale must have a determinate thing as object, is fulfilled
if object of sale is capable of being made determinate at the time of the
contract
The requirement of the law that a sale must have for its object a determinate thing, is
fulfilled as long as, at the time the contract is entered into, the object of the sale is
capable of being made determinate without the necessity of a new or further agreement
between the parties (Art. 1273, old Civil Code; Art. 1460, New Civil Code). The specific
mention of some of the lots plus the statement that the lots object of the sale are the
ones needed for city hall site; avenues and parks, according to the 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.
4. Arellano plan in existence since 1928; Area of land needed for the city hall
site known
The Arellano plan was in existence as early as 1928. Tthe previous donation of land for
city hall site on 27 November 1931 was revoked on 6 March 1932 for being inadequate
in area under said Arellano plan. The area needed under that plan for city hall site was
then already known; that the specific mention of some of the lots covered by the sale in
effect fixed the corresponding location of the city hall site under the plan; that,
therefore, considering the said lots specifically mentioned in the public instrument, and
the projected city hall site, with its area, as then shown in the Arellano plan (Exhibit 2),
it could be determined which, and how much of the portions of land contiguous to those
specifically named, were needed for the construction of the city hall site.
5. Lot 1214-B is contiguous to Lot 1214-C and 1214-D, and is in the heart of
the city hall site
Lot 1214-B is contiguous to Lots 1214-C and 1214-D, admittedly covered by the public
instrument. It is stipulated that, after execution of the contract, the Municipality of Iloilo
possessed it together with the other lots sold. It sits practically in the heart of the city
hall site.
6. Pio Sian Melliza a notary public and thus aware of the terms of the public
instrument
Pio Sian Melliza, from the stipulation of facts, was the notary public of the public
instrument. As such, he was aware of its terms. Said instrument was also registered with
the Register of Deeds and such registration was annotated at the back of the
corresponding title certificate of Juliana Melliza. From these stipulated facts, it can be
inferred that Pio Sian Melliza knew of the aforesaid terms of the instrument or is
chargeable with knowledge of them; that knowing so, he should have examined the
Arellano plan in relation to the public instrument; that furthermore, he should have
taken notice of the possession first by the Municipality of Iloilo, then by the City of Iloilo
and later by the University of the Philippines of Lot 1214-B as part of the city hall site
conveyed under that public instrument, and raised proper objections thereto if it was his
position that the same was not included in the same.
7. Principles of civil law, as well as laches, estoppel and equity applied; Lot
included in conveyance
For 20 long years, Pio Sian Melliza and his predecessors-in-interest, did not object to
said possession, nor exercise any act of possession over Lot 1214-B. Applying, therefore,
principles of civil law, as well as laches, estoppel, and equity, said lot must necessarily
be deemed included in the conveyance in favor of Iloilo municipality, now Iloilo City.
Nool v. CA [G.R. No. 116635. July 24, 1997.]
Facts: One lot formerly owned by Victorio Nool (TCT T-74950) has an area of 1 hectare.
Another lot previously owned by Francisco Nool (TCT T-100945) has an area of 3.0880
hectares. Both parcels are situated in San Manuel, Isabela. Spouses Conchita Nool and
Gaudencio Almojera (plaintiffs) alleged that they are the owners of the subject land as
they bought the same from Victorio and Francisco Nool, and that as they are in dire need
of money, they obtained a loan from the Ilagan Branch of the DBP (Ilagan, Isabela),
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, and for the failure of the
plaintiffs to pay the said loan, including interest and surcharges, totaling P56,000.00, 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 under controversy, 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 (defendants) failed to pay, and the
same day the said arrangement was made; another covenant was entered into by the
parties, whereby the defendants agreed to return to plaintiffs the lands in question, at
anytime the latter have the necessary amount; that latter asked the defendants to
return the same but despite the intervention of the Barangay Captain of their place,
7
defendants refused to return the said parcels of land to plaintiffs; thereby impelling the the property that they “sold” to private respondents. As petitioners “sold” nothing, it
plaintiffs to come to court for relief. On the other hand, defendants theorized that they follows that they can also “repurchase” nothing. In this light, the contract of repurchase
acquired the lands in question from the DBP, through negotiated sale, and were misled is also inoperative and by the same analogy, void.
by plaintiffs when defendant 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.

It should be stressed that Manuel S. Mallorca, authorized officer of DBP, certified that the
1-year redemption period (from 16 March 1982 up to 15 March 1983) and that the
mortgagors’ right of redemption was not exercised within this period. Hence, DBP
became the absolute owner of said parcels of land for which it was issued new
certificates of title, both entered on 23 May 1983 by the Registry of Deeds for the
Province of Isabela. About 2 years thereafter, on 1 April 1985, DBP entered into a Deed
of Conditional Sale involving the same parcels of land with Anacleto Nool as vendee.
Subsequently, the latter was issued new certificates of title on 8 February 1988.

The trial court ruled in favor of the defendants, declaring the private writing to be an
option to sell, not binding and considered validly withdrawn by the defendants for want
of consideration; ordering the plaintiffs to return to the defendants the sum of
P30,000.00 plus interest thereon at the legal rate, from the time of filing of defendants’
counterclaim until the same is fully paid; to deliver peaceful possession of the 2
hectares; and to pay reasonable rents on said 2 hectares at P5,000.00 per annum or at
P2,500.00 per cropping from the time of judicial demand until the said lots shall have
been delivered to the defendants; and to pay the costs. The plaintiffs appealed to the
Court of Appeals (CA GR CV 36473), which affirmed the appealed judgment in toto on 20
January 1993. Hence, the petition before the Supreme Court.

The Supreme Court denied the petition, and affirmed the assailed decision of the Court
of Appeals.

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
8