Price signifies the sum stipulated as the equivalent of the 6.

Inefficacious and Appropriation

thing sold
The use of term inefficacious was not meant to
REQUISITES FOR VALID PRICE exclude void sale, but more to be able to include valid
conditional contracts of sale (which have become
(a) It must be REAL; 2 inefficacious) in the same group as void contracts, for the focal
point of price.
(b) It must be in MONEY OR ITS EQUIVALENT, (i.e., it must
be VALUABLE CONSIDERATION);3 In spite of lack of an agreement as to price or defect
in the agreement as to price, there would nevertheless be a
(c) It must be CERTAIN or ASCERTAINABLE. 4 valid contract of sale upon which an action for specific
performance would prosper for the recovery of the price.
1. Price must be real
In order to recover the price there must be a
a. When Price is Real
delivery by the seller and acceptance and appropriation
There is legal intention on the part of the buyer to by the buyer, of the subject matter of the sale.
pay the price, and legal expectation on the part of the seller to
7. Concept of Appropriation
receive such price.
Art. 1474 founded on the principles of unjust
b. When Price is Simulated
enrichment and estoppel.
When a contract of sale is fictitious, and therefore
1. The doctrine is based on the Principle of Unjust
void and inexistent, as there was no consideration for the
Enrichment directed against the buyer who is not
same, no title over the subject matter of the sale can be
allowed to retain the subject matter of the sale
conveyed.
without being liable to pay the price even when no
Ex: To defraud the Creditor such agreement on the price was previously made,
and;
c. When Price is False
2. The doctrine applies even when there is a no
If the price indicated in the covering instrument is contract situation because of no meeting of the
false, the contract of sale is valid, but the underlying deed is minds as to the price, although there was a meeting
subject to reformation to indicate the real price upon which of minds as to subject matter, and may also apply to
the minds of the parties have met. void sale contract situation where the defect is as to
price2
They may stipulate low price:
8. Inadequacy of price
Ex: Lower the Tax
Art. 1470 provides specifically for contract of sale,
They may stipulate high price: that gross inadequacy of price does not affect the contract of
sale, except as it may indicate a defect in consent, or the
Ex: To prevent right of redemption parties really intended a donation or some other act or
contract.
d. Effect of:
There is a Gross Inadequacy in Price if a reasonable
Non-Payment of Price: The sale may be
man will not agree to dispose of his property at that amount.
consummated
Simulation of Contract V. Gross Inadequacy of Price
Non-Delivery: The sale is not consummated
Simulation of Contract has no real agreement
e. Accommodation Does Not Make Sale Void for Lack
between the parties, hence VOID
of Price.
Gross Inadequacy of Price does not affect the
2. Price Must Be in Money or Its Equivalent:
validity of contract, unless it signifies a defect in the consent
Its Equivalent means Negotiable Instrument. In
Effects of Inadequacy of price
can have the effect of payment if it has been cashed or through
the fault of the creditor it may have been impaired. Is a ground for rescission of conventional sale
It may AVOID judicial sale of real property. Even if there
3. Price must be certain or ascertainable at
is an inadequacy of price, a judicial sale will not be set
perfection
aside by the court when there is right of redemption.
The designation of a third party to fix the price is It raises a presumption of equitable mortgage.
valid.
9. WHEN MOTIVE NULLIFIES SALE
The designation of a third party to choose among
The general rule in a contract of sale is that consideration is
the subject matter is NOT ALLOWED.
different from the motive.
4. Manner of payment of price must be agreed upon
Cause V. Motive
The agreement as to the manner of payment goes
Cause is the essential reason which moves the contracting
into the price, such that a disagreement on the manner of
parties to enter into it, and si the immediate, direct and
payment is tantamount to a failure to agree on the price.
proximate reason which justifies the creation of an obligation
If the payment is in form of a thing it may be barter, thought the will of the contracting parties.
depends on the value of the thing. If service, there is a contract
Motive is the particular reason of a contracting party which
but not contract of sale.
does not affect the other party.
5. When there is sale even when no price has been
The sale is void if the illegal motive predetermined the
agreed upon
purpose of the contract
Article 1474 is the only exception where there would still be a
valid sale even when there has been no meeting of the minds
as to the price or any other consideration.