"Sale" is a contract whereby one of the contracting parties obligates himself to transfer the ownership and to deliver the possession of a determinate thing. It is perfected by mere consent at the moment there is meeting of the minds upon the thing which is the object of the contract and upon the price. - Art 1475 - from the moment of perfection of the sale, the parties may reciprocally demand performance.
"Sale" is a contract whereby one of the contracting parties obligates himself to transfer the ownership and to deliver the possession of a determinate thing. It is perfected by mere consent at the moment there is meeting of the minds upon the thing which is the object of the contract and upon the price. - Art 1475 - from the moment of perfection of the sale, the parties may reciprocally demand performance.
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"Sale" is a contract whereby one of the contracting parties obligates himself to transfer the ownership and to deliver the possession of a determinate thing. It is perfected by mere consent at the moment there is meeting of the minds upon the thing which is the object of the contract and upon the price. - Art 1475 - from the moment of perfection of the sale, the parties may reciprocally demand performance.
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Attribution Non-Commercial (BY-NC)
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Download as DOC, PDF, TXT or read online from Scribd
Chapter 1 – Nature of Sale by law its nature and consequence is
governed by laws on sales.
* Article 1458 – “Sale” as a contract - It is principal because it can stand alone, whereby one of the contracting does not depend on another contract. parties(Seller) obligates himself to transfer the ownership and to deliver the possession 2. Consensual – it is perfected by mere consent at the moment there is meeting of of a determinate thing and the other the minds upon the thing which is the object party(Buyer) obligates himself to pay of the contract and upon the price. therefore a price certain in money or its - Art 1475 – from the moment of perfection equivalent. of the sale, the parties may reciprocally demand performance. * Nature of Obligations created in sales * Modalities that affect the 1. Seller - Transfer the ownership characteristic of consensuality - Suspensive term or condition - Deliver the possession - Not all contracts of sale become automatically and immediately effective even 2. Buyer – Pay the price if consensual. Ex. In Sales with assumption of @ These are real obligation mortgage, it is a condition precedent to the @ Cannot be obligations to do and not to seller’s consent, without approval of the do, because of the public policy against mortgage the sale is not perfected. involuntary servitude, we cannot impose specific performance * Bilateral and Reciprocal @ What is to be delivered is a - Sale is bilateral contract embodying determinate thing reciprocal obligations, because it imposes obligations on both parties to the relationship, obligation or promise of each * Subject matter: party is the cause or consideration for the * It should be determinate* obligation or promise of the other. @ Art 1460 – states that the “requisite - Reciprocal obligation, those which arise that the thing be determinate is satisfied if at from the same cause and which each party is the time the contract entered into, the thing a debtor and creditor of the other. is capable of being made determinate without the necessity of a new and further @ Legal Effects: agreement between the parties. - The power to rescind is implied, need @ If generic, the performance of the not be seller would require necessarily its physical stipulated segregation or particular designation making - Neither party incurs delay if the other it determinate at the point of performance. party does not comply. * Elements of contract of sale - if one party already fulfilled his 1. Politacion – negotiation or preparation obligations, the 2. Perfection – conception or birth default begins without prior demand 3. Consummation – Death to the other party. *Essential characteristic of sales 1. Nominate and Principal – Nominate * Onerous because it has been given a particular name - Sale is an onerous contract because it 2. Principal 2. Buyer imposes a valuable consideration as a remains owner becomes prestation which is ideally a price even if object owner of thing * Commutative delivered to in agency - it is a commutative contract because a agent thing of value is exchange for equal value. 3. Agent * Sale is a title not mode assumes no - Sale is merely title that creates the risk/liabilities 3. Seller obligation on the part of the seller to transfer as long as warrants ownership and deliver possession, but on its within own sale is not a mode that transfer authority given ownership, it would be delivery or tradition 4. Agent not that is the mode to transfer ownership. 4. Seller allowed to recieves profits Donation Sale profit 1. Gratitious or 5. Personal 1. Onerous contract, 5. Real Onerous rescission is Contract 2. 2. Formal not available Consensual contract Contract 3. Governed 3. Law on by law on Sales Contract for a donation Sale piece of work Barter Sale 1. Contract for delivery 1. of an article 1. Consideration: 1. Goods are which the Consideration : giving of to be verndor in Giving of a thing money as manufactured the ordinary payment specially for a course of 2. Governed by the law on sales customer and business 3. If consideration is partly money upon special manufacture and partly in a thing, look at the order and not s or procures intention for the general for general 4. If intention is public market(whet not clear, value 4. Thing is her on hand of the thing is equal or lesser or not) greater that the than the 2. Essence is 2. Essence is amount of amount of Service Object money its money its SALE BARTER 3. Jurisprudence: A.) Timing Test Agency to Sell Sale - whether the 1. Agent not thing obliged to pay transfered for price, 1. Buyers pays would have merely obliged for the price never existed to deliver price but for the received from order. buyer. B.) Habitual Test - if Lease Sale Manufacturer 1. Use if thing engages in 1. Obligation is for specified activity with to absolutely period only need to transfer with an employ ownership of obligation to extraordinary thing return skills and 2. 2. equipment Consideration Consideration (Celestino) is rent is price C.) Nature of 3. Seller needs the object test. to be owner of (EEI Vs CIR) 3. Lessor need thing to Each product not be owner transfer and nature of ownership execution differs from Note: Lease with option to buy us a contract the other of sale. products are not ordinary * Subscription Contract: products of the - Any contract for the acquisition of unissued manufacturer stock in an existing corporation or a corporation still to be formed. Dation in Sale Payment 1. pre- existing 1. No pre- credit existing credit 2. Debtor's consideration: 2. Extinguishmen Consideration t of the debt. of the seller is Creditors price Consideration: Consideration Acquisition of of the buyer is the object acquisition opf offered in lieu the object of the original credit 3. Less 3. Greater freedom in freedom determining determining the price the price 4. Payment received by 4. Buyer still debtor before has to pay the the contract is price perfected Chapter 2 – Parties of a Sale - Voluntary emancipation by recording in the civil registry of an agreement in a public * Gen Rule: any person who has “capacity instrument executed by the parent. to act” or “to power to do acts with legal - By marriage of the minor. effects” or more specifically with the power - He then shall be qualified to validity enter to obligate himself, may enter into a contract into contract of sale. of sale as a Seller or Buyer. * Sale by and between spouses 1. Sales with third parties. * Minors, insane or demented persons and Old Civil code – VOID deaf mutes. Under laws on sales: * The following are disqualified to enter to a - without acceptance of the other contract of sale. (No Legal capacity) spouse, the transaction entered by the other 1. Minors spouse shall be construed as a continuing 2. Insane offer. 3. Demented Persons - sale by the husband without the 4. Deaf Mutes who do not know how to consent of wife is VOID (No full Consent). read - Valid if disposal is necessary to and write answer for conjugal liabilities. - Legal contracts entered by the persons 2. Sales between spouses: mentioned above are not void but voidable. Art 1490 – Spouses cannot sell - Capacitated persons disqualified from property to each other except: alleging the incapacity of the other person. a. With Marriage settlement - Incapacitated persons is not obliged to b. With Judicial decree for the make any restitution, except what has been separation of property. benefited by the thing or price he received. Contracts entered between them are * Necessaries VOID. - A minor is without legal capacity to give * Applicability to common law spouses consent. - Art 1490 – prohibition that a husband and Consent is an essential requisite of a wife cannot sell property to each other also contract. applies to common law spouses. - Defective consent give rise to a voidable * Specific Incapacity mandated by Law sale. a.) Agent, with respect to the property - But if necessaries are delivered he must pay whose administration or sale may have been a reasonable price. entrusted to him, unless consent is given. * Necessaries – its everything indispensible b.) Guardian, with respect to the property of for sustenance, dwelling, clothing, medical the person under his guardianship. attendance, education and transportation. c.) Executor or Administrator, with respect to the property of the estate under In order sale to a minor is valid his administration. 1. Perfection of the sale d.) Public officers and Employees, with 2. Delivery of the subject necessaries. respect to the property of the state or any subdivision or any government owned or If only perfection at the time the case controlled corporation or institution, which reaches litigation, the sales not void but administration has been entrusted to him. voidable for vice in consent. e.) Justices, judges, prosecuting atty’s, * Emancipation clerk of courts, and other employees or - Emancipation take place by the attainment officers connected with the of marjority. administration of justice with respect to the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise ________________________ their respective functions. f.) Lawyers, with respect to the property Chapter 3 – Subject Matter and rights which may be the object of any litigation in which they may take part by * Requisites of valid subject matter. virtue of their profession. a.) Must be Existing, having Potential g.) Sales to a foreigner Existence, a Pure Thing or even Contingent or subject to a Resolutory ____________________ condition it must be possible. b.) Must be Licit. * Legal status of contracts entered into c.) Must be determinate or at least in violation of ART 1491 and 1492 determinable. - Agent with Consent = Valid Without consent = Voidable - Lack of requisites results to non-existent - Guardian/Executor/Public officer/ Officers of sale the court= VOID
* Proper Party to raise issue of nullity If Cause or Object is Illegal.
- Any person may invoke the inexistence of - Both parties being in Pari Delicto, both the contract whenever juridical effects found parties have no cause of action against each thereon are asserted against him. other, otherwise the innocent may claim what he has given and shall not be bound to *Rationale for the Absolute comply with his promise. disqualification - if both parties – neither may recover what * Trust of the highest order, and the trustee he has given. cannot be allowed to have any inducement to - Only one is fault, innocent may claim neglect his ward’s interest and therefore to what he has given and not to be bound from avoid the temptation. his promise. - Not Innocent – cannot recover. * Agents – not come within the coverage of prohibition. * if the contract is not illegal per se but *guardians, administrators and merely prohibited, the legal prohibition is executors – rescission designed to protect the plaintiff, he may if *Judges, Justices and those involved in public policy is enhanced, recover what he administration of justice. has paid or delivered. “Unjust Enrichment”. - applicable only during the period of litigation, the judge will be liable for violating * Legal Requisites of subject matter the cannons of effects if within the period of intended to govern underlying litigation. obligation of seller. * Atty’s- will constitute malpractice ground - it must be a valid subject matter. is suspension. _____________ -Contract null cannot be ratified * It must be possible thing. - contingent fee is allowed but payment must - it must be existing on the time of delivery, it be after the finality of the case. can be made possible at the time of the perfection of the contract. Note: 1491 – entirely shut the door to such person * It must be existing. occupying fiduciary positions, to even desire Art1409 – Void if cause or object did not to acquire, direct or indirectly properties of exist at the time of the transaction. their ward, estate or principal Art 1461 – even the subject matter is of 1.) If at perfection of the sale, the such nature that it cannot come to existence subject matter is capable of being – an impossible thing, the contract is VOID. made determinate. 2.) Without the necessity of a new or - It should not be outside the commerce of further agreement between the men. parties. - Art 1459 – only required that the seller ____________ “must have right to transfer the ownership at * Determinable Subject Matter is a the time is delivered”. generic object, because it has neither been - If subject matter is an impossible thing its physically segregated nor particularly VOID. designated at the point of perfection from the rest of its kind. (Atiliano vs Atiliano) *Emptio Rei Speratae ____________ - Contract covering future things. *When quantity of subject matter not - Sale is subject to a condition that the thing essential for perfection. will come into existence. - Logically, actual quantity of goods as subject matter of sale would also be essential * Emptio Spei. ingredient to achieve the requisites of the - Mere hope or expectancy is deemed subject goods being determinate or determinable. to the condition that the thing will come to Based on Art 1349, the fact that the existence. quantity is not determinate as to its kind, Ex. Vain Hope – Void shall not be an obstacle to the existence of Sweepstakes.. the contract between the parties. (Nat’l grains V IAC) Doctrine: Specific quantity of * Sale of things subject to resolutory the subject matter is not important when it is condition. still possible to determine the quantity - If Resolutory condition happens it extinguish without the need of a new contract between the obligation. the parties @ Conditional – retroacts to the day the constitution of the obligation. (Johannes Schuback v CA) @ Subject matter is nexus of sale - Quantity is immaterial, what is important is - The Subject Matter must be existing or must the meeting of the minds as to the object and come to existence to be delivered to the cause. buyer, otherwise the contract is void. _______________ ______________ * Generic Non-Determinable Objects * Subject Matter must be Licit - Determinable objects may be the valid - Not outside the commerce of men. subject matter of sale, then even generic - Not Sale of future inheritance. things fall within said definition can validly - Not the sale of sick animals, unfit for use. support a contract of sale. - Not illegal - Sale is determinable generic thing is valid. -----Otherwise its VOID----- The obligation to deliver the subject matter ________________ can only be complied with the subject matter * Subject Matter must be determinate or has been determinate by: at least determinable. 1. Physical Segregation a.) Determinate subject matter 2. Particular Designation - When it is particularly designated or physically segregated from all others of the (Yu Tek V Gonzales) same class. - If obligation consist in the delivery of an b.) Determinable Subject Matter. indeterminate or generic thing, which quality Requisites: is not stated. -Buyer cannot ask for superior thing - Sale is still valid when it has for its cause or - seller cannot deliver inferior quality. consideration an item other than price. (PUP ___________ vs CA) * Status of sale not complying with third - A seller cannot unilaterally increase the requisites. price previously agreed upon with the buyer, - When the minds of the parties have met even when the need to adjust the price is due upon a subject matter which is neither to increased construction cost. determinate or determinable the contract is - A buyer cannot withdraw from a sale on the still VOID for lacking 3rd requisites. ground that the interest rate of 24% set on ______________ the payment. * Sale of Undivided Interest ______________ - Co-Ownership over the subject matter. * Requisites for valid price. ______________ a. It must be Real * Sale of undivided share in Mass. b. It must be in money or its equivalent. = if Mass is > than the mass you intended to It must be valuable consideration. buy you will get a proportionate part of the c. It must be certain or ascertainable. mass. * Price is Real – when at the perfection of the = if Mass is < than the mass you intended to sale, there is legal intention on the part of the buy, you will be the owner of the whole mass buyer to pay the price and legal expectation + the seller is bound to make good the on the part of the seller to receive such price deficiency from goods of the same kind and as the value of the subject matter he quality. obligates himself to deliver. (Gaite v Fonacier) ____________ * When Price is Simulated. * Sale of Mortgage Property. - Neither party to the deed of sale had any - Mortgagor is not prevented to sell the intention whatsoever that the amount will be mortgage property. paid – the sale is void. - If Stipulation forbidding the sale, it is * Object can be simulated considered VOID. *Price can be simulated ____________ If both simulated its Absolute Simulation – * Seller’s Obligation to transfer ownership. VOID - He might not be the owner of the thing at If only one its relatively Simulated – the time of perfection but he should be the Reformation owner at the time of the delivery, otherwise * (Intent perfects the contract) he may held liable for breach of warranty (Inadequacy cannot come with simulation) against Eviction. (Contract is not the primary factor, look for the intent which is the primary factor. Exception: ______ When the seller must be the owner at time of sale * When Price is False. Ex. Foreclosure sale. - When there is a real price upon which the minds of the parties had met but not _________________________________ declared and what is stated in the covering deed is not the one intended to be paid. Chapter 4 – Price and Other Consideration - If price is false, contract is valid but subject * Art 1458 defines price is the ideal to reformation to indicate the real price. consideration for a contract of sale as a sum certain in money or its equivalent. * Parties may be held bound by the false price indicated in the instrument under estoppels principle, especially when the - When he contracted with the bureau of interest of the government or third parties prison 100 tons of logs, when he cannot pay would be adversely affected by the he substituted other items in consideration of reformation of the instruments. his debts. “small payment + other items” * Adequacy of price to make it “real” concept * Meeting of minds as to price. (Mapalo v of valuable consideration. “ Ong v Ong” Mapalo) P1.00 and other valuable consideration, the - There was no real Consideration and not court held that since no evidence was given one that merely states false consideration, it that the consideration stated in the deed was was VOID. not paid or was simulated it was considered ______________ valid, although the price is nominal but there * Effect of non-payment of price. is a more valuable consideration given. - the failure to pay a real price goes not into perfection of the sale but into its Ex. P1.00 and other services – VOID , false consummation. fictitious consideration. (Bagnas v CA) – - The failure to pay the price or the balance because there was no service rendered. does not render the sale inexistence or _______________ invalid but merely gives rise to a right in *Price must be certain or ascertainable at favour of the seller to either demand specific perfection. performance or rescission of the contract of - Price is certain when it has been expressed sale. and agreed in terms of specific pesos and or _____________ centavos. - But given deed of sale declares that the ________________ price has been paid, when in fact it has never *Price is ascertainable ; it shall be sufficient been paid, that would be considered a badge that it be so with reference to another thing of simulation of price, would render the certain or the determination be left to the contract VOID. judgment of a specified person or persons. __________ A. Third Party (Price) = Valid * Accommodation does not make sale void B. Subject = VOID for lack of price. (MATE Case) ______________ The check issued to him which bounced and C. Price ascertainable in reference to other his lot was foreclose. (Tangang abogado) things certain. ______________ - Exchange rate. * Simulation of price affects delivery of - Involves which identity the existence of the subject matter. agreement. - When contract is fictitious, which is VOID __________ and inexistence, as there was no D. Effects of unascertainability. consideration for the same, no title over the - cannot be determined, the contract of sale subject matter of the sale can be conveyed. is inefficacious. - No man can do anything except what he __________ can do lawfully. * Manner of payment of Price must be agreed ______________ upon. *Price must be in money or it’s equivalent: - Manner of payment of the price is an Valuable consideration. integral part of the concept of “Price” - cannot be service because of the time value of money. - when the intention of the parties are partly - It is what makes price certain or money and partly another thing.(Price and ascertainable. other additional consideration). “Republic V - Terms of payment being an integral part of Phil Resources Dev’t” the price, could have the same requisites that the law imposes on price to support valid contract of sale: Certain or at least _____________ ascertainable. *Judicial Sale. - If no manner of payment of the price, would - Judicial sale to be set aside on the ground of support that the agreement was really a inadequacy of price, it should be such as to contract to sell. be shocking to the conscience of man. - When there is sale even when no price has - But will not be set aside if there is right of been agreed upon. redemption. - When price cannot be determined in any ________ other manner, the contract is inefficacious. * Sales with right to repurchase However if the thing has been delivered to *remedy not rescission but reformation. the buyer, he must pay reasonable price, *When Motive Nullify sale= VOID because of what is reasonable price is a question of fact illegal motive. dependent on the circumstances of each _____________________ particular case, but the courts have authority Chapter 5 – Formation of sale to fix reasonable price. * Stages in the life of sale __________ 1. Politacion – Negotiation, preparation, * Rulings on receipts and other documents conception or generation stage; period of embodying price. bargaining and negotiation ending at the - Invoices are not evidence of payment since moment of perfection. they are only evidence of the receipts of 2. Perfection- Birth of contract parties come goods. to agree the terms of the sale. - The best evidence of payment is receipts 3. Consumation – death of the contract (Xentrex V CA). fulfilment or performance of the terms ___________ agreed upon in the contract. *Inadequacy of Price. ____________ - Mere inadequacy of the price does not *Politacion Stage: affect the validity of the sale, except: - Deals with matters arising prior to the 1. When there is fraud, mistake or undue perfection of sale, dealing with concepts of influence indicative of a defect in consent is invitation to make offer, acceptance, right of present. first refusal, option contract... others. 2. When it shows that the parties really - In this stage there is freedom to contract, intended a donation or some other act or right to choose with whom to contract and contract. what to contract. ___________ * Simulated VS Gross Inadequacy * Advertisement and invitations. SIMULATED = VOID - not definite offers but mere invitations to Gross inadequacy = does not affect validity make an offer not unless it appears of a contract of sale, unless it signifies a otherwise. defect in the consent or that the parties actually intended a donation or other. * Offers: ____________ - An offer, prior to its acceptance is subject to * Rescissible Contracts of sale. the complete will of the offeror. It may be - Inadequacy of price is a ground for destroyed or withdrawn by the offeror prior to rescission of conventional sale. its acceptance, even without his consent. a. Those entered by guardians the ward _____________ suffered lesion more than ¼ of the value of * Option Contract: the object. a.) Determining the “location” of option: b. Those agreed upon in representation of - An accepted unilateral promise to buy or to absentees, if the latter should suffer lesion by sell a determinate thing for a price certain is more than ¼ of the value of the object. binding upon the promisor if the promise is supported by a consideration distinct from 1. Principal 1. Accesory; the price. contract; stand cannot stand - It is privileged existing in one person, for on its own on its own which he had paid a consideration and which gives him the right to buy certain 2. need 2. does not merchandizing or property from another separate need separate person if he chooses, at anytime within the consideration consideration agreed period at a fixed Price. 3. there must 3. subject -“An option is a contract granting a privilege be subject matter and to buy or sell within an agreed time and at a matter but price must be determined price, it is a separate and distinct price not valid contract from that which the parties may important enter into upon the consummation of the 4. not option. It must be supported by 4. conditional conditional consideration. 5. not subject 5. Subject to a - It is a preparatory contract in which one to a specific specific party grants to the other, for a fixed period performance performance and under specified conditions, the power to decide, wether or not to enter into a principal (Equitorial Case) contract, it binds the party who has given the * Right of First Refusal option. - A promise on the part of the owner that if - It should have a separate consideration to he decides to sell the property in the future, be valid. he would first negotiate its sale to the ___________________ promise. * Elements of Valid option contract. *Same Price should be offered to the party 1. Consent exercising the right, what was offered to the 2. Subject matter: an option right to an other part shall be the same offered to him. unaccepted unilateral offer to sell/ accepted ______________________ promise to sell or unaccepted promise to * Perfection Stage: Offer and acceptance buy: - A contract is born from the moment there is a.) Determinate/Determinable object. a meeting of minds upon the thing which is b.) for a price certain, including the manner the object of the contract and upon the price; of payment. consensual contract. 3. Prestation: A consideration separate and Exception: when the sale is subject to a distinct from the purchase price for the suspensive condition. option given. * Acceptance must be “Absolute” - No MODIFICATION. - If without separate consideration option _______________ contract is VOID as a contract. * When Deviation is allowed. - But would still constitute a valid offer, so - When changes were not substantial, but that if the option is exercised prior to its merely clarificatory. withdrawal, that is equivalent to an offer _____________ being accepted and would give rise to a valid * Sale by Auction: and binding sale. a.) Sales of separate lots by auction are separate contract of sales, auction are separate contract of sale. Option Right of first b.) Sale is perfected by the fall of the Contract refusal hammer. c.) Seller has the right to bid at the auction *When form is important for enforceability provided such right was reversed and notice (Statutes of fraud) was given to that effect. a.) A sale agreement which by its term is not ________________ to be performed within a year from the * Earnest Money: making. - Need to know that the money given is b.) An agreement for the sale of goods, earnest money. chattels or things in action, at a price not less - Money given as part of purchase price. than P500. - Acceptance is the proof that contract of sale c.) A Sale of real property or of an interest. exist. - Cannot be forfeited, part of the purchase *Exceptions to coverage of statute in sales price; must be returned. contracts. -Art 1482 – whenever earnest money is given 1.) When there is a note or memorandum in in a sale. It shall be considered as part of the writing and subscribed to by party or his purchase price and as proof of the perfection agent. of the contract. 2.) When there has been partial _____________ performance/Execution * Place of Perfection: 3.) When there has been failure to object to - The sale’s place of perfection is where there presentation of evidence. is a meeting of the offer and the acceptance 4.) When sales are affected through upon the thing and the cause which are to electronic commerce. constitute the contract. Option Money Earnest Money - it is presumed that the contract was 1. Money given 1. Part of the entered into in the place where the offer was as distinct purchased made. consideration price __________ * Form of Sales. 2. Applies to a 2. Given only *Form not important in validity of sale; sale not when there is a.) Sale being consensual, may be oral or perfected already a sale written, perfected by mere consent as to 3. When given, price and subject matter. 3. not required Buyer is bound b.) if particular form is required under the to Buy to pay the statutes of fraud: balance - valid and binding between parties but not * E-Docs binding to 3rd persons. - Electronic Commerce Act. c.) Purpose of convenience only and not for - Information shall not be denied validity or validity and enforceability cause of action is enforceability solely on the ground that it is granted to sue and compel other party to in the form on the ground that it is in the execute the document. form of an electronic data message - Proof of delivery. purporting to give rise to such legal effect. ______ * Form is important for validity: **Not allowed – FAX and Photocopy*** a.) Power to sell a piece of land granted to an agent-otherwise void. b.) Sale of large cattle: must be also registered with municipal treasurer- otherwise void. c.) Sale of land by non-christian if not approved by governor – void. __________