Chapter 3

SUBJECT
MATTER

Balan, Kristen Roseljoy C.

Siguan, Justin Andre A.
Descartin, Justin Jeremy Edrei B.
Elements of the Contract of Sale

a. Consent, or meeting of the minds to transfer ownership in

exchange for the price;

b. Subject Matter; and

c. Price, certain money or its equivalent.

Requisites of a VALID Subject Matter

●
It must be existing, having potential existence, a future
thing, or even contingent or subject to resolutory condition,
in other words, it must be a “Possible Thing”;

●
It must be Licit; and

●
It must be Determinate, or at least Determinable.
A. Possible Thing

●
Things having a potential existence may be the object of
the contract of sale. (Article 1461)
●
xxx...There may be a contract of sale of goods, whose
acquisition by the seller depends upon a contingency
which may or may not happen. (Article 1462 par. 2)
●
“Existing goods” and “Future goods”
Illustration

VS.

To ensure demandability and enforceability of the

underlying obligation of the seller to deliver.
Case 1: Mananzala v. Court of Appeals, and
Corazon Araez (G.R. No. 115101. March 2,
1998)

Issue: Whether the sale of a lot by a seller who is yet to

acquire full ownership from the government agency is a
valid sale?
Emptio Rei Speratae
1. Sale of an expected thing
*only in determinate things
Emptio Spei
1. Sale of a mere hope or
expectancy that the thing will
come to existence; Sale of the
hope itself

2. Sale is subject to the condition 2. Sale produces effect even if

that the thing will exist; if it does the thing does not come into
not, there is no contract existence, unless it is a vain hope

3. The uncertainty is with regard 3. The uncertainty is with regard

to the quantity and quality of the to the existence of the thing
thing and not the existence of the
thing

4. Object is a future thing 4. Object is a present thing which

is the hope or expectancy
Sale of Things Subject to Resolutory
Condition:
●
Things subject to a resolutory condition may be the object
of the contract of sale. (Art. 1465)
– Immediately binding after the parties thereto have
signed it, and will remain binding subject to the future
event stipulated in the condition being fulfilled.
– The condition must be accurately described and a
time period must be specified for fulfilment (or non-
fulfilment) of the condition.
Effects (Resolutory Condition):
●
When the conditions have for their purpose the
extinguishment of an obligation to give, the parties, upon
the fulfillment of said conditions, shall return to each other
what they have received. (Article 1190 par. 1)

●
The effects of a conditional obligation to give, once the
condition has been fulfilled, shall retroact to the day of the
constitution of the obligation. Nevertheless, when the
obligation imposes reciprocal prestations upon the parties,
the fruits and interests during the pendency of the condition
shall be deemed to have been mutually compensated. xxx
(Article 1187)
Subject Matter is the Nexus of Sale

●
The subject matter must be existing or must come to
existence to be delivered to the buyer; otherwise, the
contract of sale is VOID, or an existing contract of sale is
EXTINGUISHED, with the obligation on the part of the
seller to return the price he has received thereby.
●
Civil Code provisions on Sale: “Catch-all” provisions which
effectively bring within their grasp a whole gamut of
transfers whereby ownership of a thing is ceded for a
consideration. (Polytechnic University v. CA)
Questions:

●
Can future inheritance be a subject matter in a contract of
sale? Why?

●
When is hope considered vain? Give an example.
 B. Licit

Define Licit?

Conforming to the requirements of the law;

not forbidden by law.
Requisites to be licit:

(1) Object is not outside the commerce of men;

(1) Transmissible rights

(1) Not prohibited

Quijada vs CA

What are objects outside the commerce of

men?
 C. Determinate / at least determinable

Determinate

(1) Particularly Designated

(2) Physically Segregated
Determinate / at least determinable

Determinable

Requisites:
(1) Capacity to segregate
(2) No further agreement needed
Questions:

(1) If I buy a thing that is yet to be made,

determinable or determinate?

(1) Is the sale of an internal organ of a kidnapped

child valid?
GENERIC NON-
DETERMINABLE
OBJECTS
Is Generic Non-Determinable
Objects are valid subject matter
of a sale?
• Article 1246. When the obligation consists in the
delivery of an indeterminate or generic thing, whose
quality and circumstances have not been stated, the
creditor cannot demand a thing of superior quality.
Neither can the debtor deliver a thing of inferior
quality. The purpose of the obligation and other
circumstances shall be taken into consideration.

• Only the courts have the power to set the appropriate

quality of the subject matter of a sale when the same
is determinable.
• Article 1409. The following contracts are inexistent
and void from the beginning:
(6) Those where the intention of the parties
relative to the principal object of the contract
cannot be ascertained.

• When it is the KIND and QUANTITY that cannot be

determined without the need of a new agreement of
the parties, then the contract is void.
Status of Sale Not Complying
with the Third Requisite

Reason:
The Enforceability and the Demandability of the underlying
obligation of the seller to deliver the subject matter.
Sale of Undivided Interest and
Sale of Undivided Interest in
Mass
Article 1463. The sole owner of a thing may sell an undivided interest
therein.

•This would result to co-ownership with the buyer over the subject
matter.
• Article 1464. In the case of fungible goods, there may be a
sale of an undivided share of a specific mass, though the
seller purports to sell and the buyer to buy a definite
number, weight or measure of the goods in the mass, and
though the number, weight or measure of the goods in
the mass, and though the number, weight or measure of
the goods in the mass is undetermined. By such a sale the
buyer becomes owner in common of such a share of the
mass as the number, weight or measure bought bears to
the number, weight or measure of the mass. If the mass
contains less than the number, weight or measure bought,
the buyer becomes the owner of the whole mass and the
seller is bound to make good the deficiency from goods of
the same kind and quality, unless a contrary intent
appears.
Illustration:
• A and B made a contract of sale. A
agreed that B will deliver all of the
mangoes in his farm during the
season for the price of P5,000. B
delivered truck of mangoes. Is the
Sale Valid?
• Yes, the sale was valid. In the case of Gaite vs
Fonacier, the Supreme Court ruled that when
parties to a sale covering a specific mass had
not made any provisions in their contract the
measuring or weighing the subject matter sold,
and the price agreed upon was not based on
such measurement, then the subject matter of
the sale is, therefore, a determinate object, the
mass, and not the actual number of units or
tons contained therein. What is required of the
seller was to deliver in good faith to his buyer
notwithstanding that the quantity delivered is
less that the amount estimated.
Sale of a Mortgaged Property
The mortgagor is not prevented form selling the
property since a mortgage is merely encumbrance
on the property and does not extinguish the title of
the debtor who does not lose his principal attribute
as owner to dispose of the property.
Seller’s Ability to
Transfer Ownership
General Rule:
The seller must be the owner of the thing in order to
transfer ownership to the buyer.
(NEMO DAT QUOD NON HABET….. NOBODY CAN DISPOSE
OF THAT WHICH DOES NOT BELONG TO HIM)

Exception:
When the Seller must be the owner at the perfection of
the contract.

What if the seller is not the owner of the thing?

•He may be held liable for breach of warranty against
eviction.
Case:
• CONCHITA NOOL and GAUDENCIO
ALMOJERA vs. CA

• Issue: Whether or not the Contract of Sale is valid

Subsequent Acquisition of Title
by Seller
• Article 1434. When a person who is not the
owner of a thing sells or alienates and delivers it,
and later the seller or grantor acquires title
thereto, such title passes by operation of law to
the buyer or grantee.

• Provided that there has been previous delivery of

the subject matter by the seller to the buyer
In Summary...