Special Contracts – SALES

(Art. 1458 to 1623)

Civil Code of the Philippines

GSMBA109
Legal Aspects of Business

Submitted by:
Riangelli Exconde
MBA 2A-R

Submitted to:
Atty. John R. Jacome
Definition

A contract of sale is a contract where one party obligates himself to deliver a determinate thing to another
part, who in turn, obligates himself to the other to pay a sum of money or its equivalent.

SALE - A nominate contract whereby 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.

Notes: Delivery and payment in a contract of sale are so interrelated and intertwined with each other that
without delivery of the goods there is no corresponding obligation to pay. The two complement each other.
It is clear that the two elements cannot be dissociated, for the contract of purchase and sale is essentially a
bilateral contract, as it gives rise to reciprocal obligations. (Pio Barretto Sons, Inc. vs. Compania Maritima,
62 SCRA 167).

Neither is the delivery of the thing bought nor the payment of the price necessary for the perfection of the
contract of sale. Being consensual, it is perfected by mere consent.

Essential Requisites

The contract of sale, being a contract, has the same requisites, namely, consent, object, and cause.

1. Consent - Also called meeting of the minds. mutual agreement, or consensus ad idem. It essentially
refers to a situation where the two parties of the contract have a mutual understanding in the formation of
the contract of sale. This essentially means that there is consent in the part of the seller to transfer
ownership of the determinate thing and in the part of the buyer to pay the equivalent price.
Note that both of the parties must have the legal capacity to give their consent.
2. Object - This is the subject matter of the contract. It must be determinate or capable of being
determinate.
3. Cause - This refers the price, in terms of money or its equivalent.

Kinds of Contract of Sale

1. Absolute - This refers to a contract of sale that is not subject to any condition or does not require
any condition for the transfer of ownership.
2. Conditional - This refers to a contract of sale that contemplates contingency or is subject to a
condition. It follows then that the delivery of the determinate thing does not necessarily transfer
ownership, unless the contingency or condition is fulfilled.
Example Cases:

Aguinaldo v. Esteban GR 27289, Apr. 15, 1985

A contract of sale of property, without consideration, and executed by a person who is of low intelligence,
illiterate, and who could not sign his name or affix his thumbmark, is void.

Leabres v. CA GR 41837, Dec. 12, 1986

A receipt which merely acknowledges the sum of P1,000, without any agreement as to the total purchase
price of the land supposedly purchased, nor to the monthly installment to be paid by the buyer lacks the
requisites of a valid contract sale, namely: (a) consent or meeting of the minds of the parties; (b)
determinate subject matter; (c) price certain in money or its equivalent, and, therefore, the “sale” is not valid
nor enforceable.

People’s Homesite v. Court of Appeals L-61623, Dec. 26, 1984

If subdivision lot is sold to a buyer on condition that higher authorities would approve the same, there is yet
no perfected sale.

Zambales v. Court of Appeals GR 54070, Feb. 28, 1983

If during the 5-year period when a homestead cannot be sold, it is promised to be sold (in a compromise
agreement), will this promise be regarded as valid? HELD: The promise will be void even if the sale is
actually made after the 5-year period, and even if the Minister (now Secretary) of Agriculture approves the
same after the lapse of said 5-year period

Almendra v. IAC GR 76111, Nov. 21, 1991

FACTS: Petitioners contend principally that the appellate court erred in having sanctioned the sale of
particular portions of yet undivided real proper ties. HELD: While petitioners’ contention is basically correct,
there is, however, no valid, legal and convincing reason for nullifying the questioned deeds of sale.
Petitioner had not presented any strong proof to override the evidentiary value of the duly notarized deed of
sale. Moreover, the testimony of the lawyer who notarized the deeds of sale that he saw not only Aleja (the
mother) signing and affixing her thumbmark on the questioned deeds but also Angeles (one of the children)
and Aleja “counting the money between them,” deserves more credence that the self-serving allegations of
the petitioners.

Such testimony is admissible as evidence without further proof of the due execution of the deeds in
question and is conclusive as to the truthfulness of their contents in the absence of clear and convincing
evidence to the contrary. The petitioners’ allegation that the deeds of sale were obtained thru fraud, undue
influence and misrepresentation and that there was a defect in the consent of Aleja in the execution of the
documents because she was then residing with Angeles, had not been fully substantiated. They failed to
show that the uniform price of P2,000 in all the sales was grossly inadequate. The sales were effected
between a mother and two of her children in which case fi lial more must be taken into account. The
unquestionability of the due execution of the deeds of sale notwithstanding, the Court may not put an
imprimatur on the instrinsic validity of all the cases. The Aug. 10, 1973 sale to Angeles of one-half portion
of the conjugal property may only be considered valid as a sale of Aleja’s one-half interest therein. Aleja
could not have sold the particular hilly portion specified in the deed of sale in the absence of proof that the
conjugal partnership property had been partitioned after the death of Santiago (the husband of Aleja).
Before such partition, Aleja could not claim title to any definite portion of the property for all she had was an
ideal or abstract quota or proportionate share in the entire property.

The sale of the one-half portion of land covered by Tax Declaration 27190 is valid because said property is
paraphernal. As regards the sale of property covered by Tax Declaration 115009, Aleja could not have
intended the sale of the whole property, since said property had been subdivided. She could exercise her
right of ownership only over Lot 6366 which was unconditionally adjudicated to her in said case. Lot 6325
was given to Aleja subject to whatever may be the rights of her son Magdaleno Ceno. The sale is subject to
the condition stated above. Hence, the rights of Ceno are amply protected. The rule on caveat emptor
applies.

Sps. Vivencio Babasa and Elena Cantos Babasa v. CA, et al. GR 124045, May 21, 1993

A deed of sale is absolute in nature although denominated a “conditional sale” absent such stipulations. In
such cases, ownership of the thing sold passes to the vendee upon the constructive or actual delivery
thereof.

Heirs of Romana Ingjugtiro, et al. v. Spouses Leon V. Casals & Lilia C. Casals, et al. GR 134718, Aug. 20,
2001

It is essential that the vendors be the owners of the property sold, otherwise they cannot dispose that which
does not belong to them. Nemo dat quod non habet (“No one can give more than what he has”).

Ortigas and Co. v. Herrera GR 36098, Jan. 21, 1983

If a lot owner in a subdivision sues for a refund of a certain sum for having complied with certain conditions
imposed upon him, the action is one for specific performance incapable of pecuniary estimation (and,
therefore, within the jurisdiction of the Regional Trial Court). The suit cannot be regarded as merely one for
a sum of money. If no conditions had been imposed, the action would have been merely for a sum of
money and, therefore, capable of pecuniary estimation, there being no specific fact or fulfillment of a
condition to be proved.

Lichauco v. Olegario and Olegario 43 Phil. 540

FACTS: A owed B and was declared a judgment debtor. To pay the debt, A’s properties were attached. At
the auction sale, B was the highest bidder. Now then, under the law, the debtor, A, has the right to redeem
the property sold within a certain period. A, however, sold his right of redemption to C. B now seeks a court
declaration to the effect that the sale of the right of redemption to C be considered fraudulent and void.
HELD: The sale of the right of redemption to C is perfectly valid, since A, the seller, was the owner the
right.