Sales

From the lectures of Atty. Zyra Montefolca

Digests prepared and edited by: John Glenn Lambayon
Concept of Sale Edy’s claim over the land which he thereafter denied. In 1982, he
actually paid rent to Edy. Therefore, he was estopped to refute Edy’s
claim of ownership
Acap vs. CA - 251 SCRA 30
Facts: ISSUE: WON the ‘declaration of heirship and waiver of rights’ is a
 Lot no. 1130, evidenced by OCT No. R012179 has an area of 13,720 recognized mode of acquiring ownership and WON the same can be
sqm. considered as Deed of Sale.
 Title is issued and registered in the name of spouses Santiago Vasquez
and Lorenzo Oruma.
 After both spouses died, their only son Felixberto inherited the lot.
 In 1975, Felixberto executed the “Declaration of Heirship and Deed
of Absolute Sale” in favor of Cosme Pido.
 Since 1960, Teodoro Acap had been the tenant of a portion of the said
land covering 9,500 sqm.
 When ownership of the lot was transferred in 1975, Acap continued
to be the registered tenant thereof and religiously paid his leasehold
rentals to Pido and eventually his widow.
 When Pido died intestate on November 27, 1981, his surviving heirs
executed the “Declaration of Heirship and Waiver of Rights of Lot no.
1130 Hinigaran Cadastre”, which declared:
 That Laurenciana Pido (wife), Ely, Ervin, Elmer, Elechor Pido
(legitimate children) are the surviving heirs of Cosme Pido
 That the heirs waive, quitclaim all their rights, interests, and
participation over Lot no. 1130 in favor of Edy de los Reyes.
 Title to the property is still in the name of the Vazquez spouses. So
Edy de los Reeyes filed with the same Registry of Deeds as part of a
notice of an adverse claim against the original certificate of title.
 Since Edy was the new owner of the lot, he sought Acap to inform him
that the lease rentals should be paid to him.
 Edy alleged that he and Acap entered into an oral lease agreement
wherein the latter agreed to pay 10 cavans of palay per annum as
lease rental.
 In 1982, Acap allegedly complied with the obligation but in 1983,
refused to pay any further.
 In the meeting with the officer of the Ministry of Agrarian Reform,
Acap[‘s wife] stated that they did not recognize Edy’s claim of
ownership over the land.
 After 4 years, Edy filed a complaint for recovery of possession and
damages against Acap, claiming that as his leasehold tenant, the latter
refused and failed to pay the agreed annual rental despite repeated
demands.
 Acap averred that he continued to recognize Cosme Pido as owner of
the land. When Pido died, he continued to pay rentals to Pido’s
widow. When the latter left for abroad, she instructed him to stay in
the landholding and to pay the accumulated rentals upon her demand
or return from abroad.
 Acap claimed that he had no knowledge about any transfer or sale of
the lot to Edy in 1981. Acap denied having entered into a verbal lease
tenancy contract with Edy.

Trial Court declared the judgment in favor of Edy

 According to the trial court, evidence had established that the land was
“sold” by the heirs of Cosme Pido to Edy.
 Upon the death of Pido, the tenancy relations changed since
ownership of said land was passed on to his heirs. When they
executed the Deed of Sale in favor of Edy, ownership was passed on
to Edy.
 The sale of Lot 1130 to Edy does not of itself extinguish the
relationship. There was only a change of the personality of the lessor,
being the purchaser/transferee, assumes the rights and obligations of
the former landowner.

CA affirmed the ruling of the lower court

 Although the Declaration of Heirship and Waiver of Rights was not
identified by the heirs and was not registered with the Registry of Deeds,
it appears to have been duly notarized. Therefore, no further proof of its
due execution was necessary. The document stands as prima facie
proof of Edy’s ownership of the land
 As to its non-registration, the CA noted that Acap had actual knowledge
of the sale of the land because as early as 1983, he already knew of

Concept of Sale: Page 1


ESSENTIAL CHARACTERISTICS OF A CONTRACT OF SALE:
Consensual
Villanueva v. PNB
Preliminary notes:
 There is no perfected contract of sale in this case.
Facts:
 The Special Assets Management Department (SAMD) of the Philippine
National Bank (PNB) issued an advertisement for the sale thru bidding
of certain PNB properties in General Santos City.
 This included Lot No. 17 for P1.4 million and Lot No. 19 for P2.3
million
 Reynaldo Villanueva offered to purchase both properties for P3.7
million
 He manifested that he was depositing P400,000 to show his good
faith but with knowledge that it will be treated as part of the purchase
price only when his offer is accepted by PNB.
 In July 1990, Guevara (the VP of SAMD) informed Villanueva that only
Lot No. 19 was available, with a price of P2.9 million.
 Villanueva was instructed to submit a revised offer to purchase but he
merely inserted at the bottom of the letter his own terms of payment.
 Villanueva paid a total of P580,000 as partial payment deposit on his
offer to purchase.
 However, in October 1990, Guevarra wrote to Villanueva that, upon
orders of the PNB Board of Directors, SAMD is deferring negotiations
over the property. So, the partial payment was returned to Villanueva.
 Villanueva filed a complaint for specific performance and damages with
the RTC.
 It ruled in favor of Villanueva stating that there was already a sale as
evidenced by the down payment as the earnest money.
 However, on appeal the CA ruled that there was no perfected contract of
sale because the July 1990 letter of Guevarra constituted a qualified
acceptance to which Villanueva replied with a modified offer.
Issue: WON there was a perfected contract of sale between Villanueva and
PNB
Ruling: The CA is correct in holding that there was no perfected contract of
sale
A contract of sale is consensual in nature:
 Contracts of sale are perfected by mutual consent whereby the seller
obligates himself, for a price certain, to deliver and transfer ownership
of a specified thing or right to the buyer over which the latter agrees.
 Mutual consent being a state of mind, its existence may only be inferred
from the confluence of two acts of the parties:
 an offer certain as to the object of the contract and its consideration;
 an acceptance of the offer which is absolute in that it refers to the
exact object and consideration embodied in said offer.25  payment.
While it is impossible to expect the acceptance to echo every nuance of the
offer, it is imperative that it assents to those points in the offer which, under
the operative facts of each contract, are not only material but motivating as
well.
 Anything short of that level of mutuality produces not a contract but a
mere counter-offer awaiting acceptance.26  Respondents, Fernando Bautista, Rodolfo Goloran, Efren Guden, and
 More particularly on the matter of the consideration of the contract, the
offer and its acceptance must be unanimous both on the rate of the
payment and on its term. An acceptance of an offer which agrees to
the rate but varies the term is ineffective.   The lower court rendered judgment in favor of the heirs.
In this case, there was no mutual consent between the parties
 In June 1990, Villanueva offered to purchase Lot Nos. 17 and 19. This
offer corresponded exactly with the original offer of PNB made in April
1989. However, the acceptance (thru the offer to purchase) made by
Villanueva was not effective because the April 1989 offer had already
lapsed.
Concept of Sale: Page 2
Sales
From the lectures of Atty. Zyra Montefolca
Digests prepared and edited by: John Glenn Lambayon
 Therefore, the June 1990 offer to purchase should be treated
independently from the original offer to sell.
 In July 1990, PNB replied to this offer by saying only Lot No. 19 was
available. This reply should not be treated as acceptance but a
counter-offer
 Because between the June 1990 offer to purchase and the July 1990
letter reply, the properties, land areas, and considerations involved are
different.
 Additionally, PNB imposed an additional condition by requiring
Villanueva to submit a revised offer to purchase and that the sale
must be approved by PNB’s Board of Directors.
 Although Villanueva accepted the July 1990 counter-offer, the
acceptance was made in qualified manner since he proposed a two-year
payment term.
 Up to this point, the payment terms were not yet discussed.
 “He interjected into the negotiations a new substantial matter on
which the parties had no prior discussion and over which they must
yet agree.”
 The qualified acceptance by Villanueva resulted into a counter-offer.
However, as it happened, the Board of Directors did not accept this
last counter offer.
1. When PNB ordered the reappraisal of the
property, this was a clear repudiation not
only of the purchase price but also the term
of payment, effectively declining the
counter offer.
All in all, the parties in this case never got beyond the negotiation stage since
they failed to agree on the exact terms of the sale. Each offer was met with a
qualified acceptance. And because the parties were not unanimous as to the
object and the consideration (including the rate and most importantly the
terms of payment), there was no mutual consent and therefore no perfected
contract of sale.
Quijada v. CA
Preliminary notes:
Facts:
 Trinidad Quijada, together with her siblings, executed a conditional deed
of donation of the two-hectare land in favor of the Municipality of
Talacogon.
 The condition imposed was the parcel of land shall be used solely and
exclusively as part of the campus of the proposed provincial high
school in Talacogon. Trinidad remained in possession of the parcel of
land despite the donation.

 Even though the property was already donated, in 1962, Trinidad
sold one (1) hectare of the subject land to Regalado Mondejar without
the benefit of a written deed of sale and evidenced solely by receipts of
 In 1980, when Trinidad was dead, the Petitioner siblings filed a
complaint for forcible entry against Mondejar, which complaint was
dismissed for failure to prosecute.
 In 1987, the Sangguniang Bayan of the Municipality of Talacogon
enacted a resolution reverting the subject land back to the donors. In
the meantime, Mondejar sold portions of the land to his fellow
Ernesto Goloran.
 The heirs of the late Trinidad Quijada filed a complaint for quieting of
title, recovery of possession and ownership of parcel of land.
 It ruled that Trinidad Quijada had no legal title or right to sell the land
to Mondejar the same not being hers to dispose of because ownership
belongs to the Municipality of Talacogon.
 On appeal, the Court of Appeals reversed and set aside the judgment.
 It ruled that the sale was valid as the Quijada retained an inchoate
interest on the lots by virtue of the automatic reversion clause in the
deed of donation.
 Sales
From the lectures of Atty. Zyra Montefolca
Digests prepared and edited by: John Glenn Lambayon
Issue: WON the sale made by Quijada was valid even though at the time of
the sale, the property was already donated to the Municipality of Talacogon.

Ruling: There was a valid sale.

The donation was subject to a resolutory condition; hence, ownership was

already transferred to the donee, notwithstanding that if the condition is not
fulfilled, ownership will be reverted to the donor.
 When the Municipality accepted the donation, it became the new owner
of the property (since donation is a mode of acquisition of ownership).
The donation is perfected once the acceptance is made known to the
donor.
 In this case, the resolutory condition is the construction of the school on
the land.
 At the time of the sale, Trinidad could not have sold the property since
ownership was already transferred to the Municipality by virtue of the
donation.
 Since the resolutory condition subsists and is capable of fulfillment,
the donation remains effective. The donee remains the owner.
 However, the period within which the donee must comply with the
condition became irrelevant when the Municipality manifested that it
cannot comply with the said condition.
 Therefore, upon knowledge of the non-fulfillment, ownership of the
donated property reverted to the donor.

The donor may have an inchoate interest in the donated property during the
time that ownership of the land has not reverted to her. Such inchoate
interest may be the subject of contracts including a contract of sale.
 In this case, however, what the donor sold was the land itself which
she no longer owns. It would have been different if the donor-seller
sold her interests over the property under the deed of donation which is
subject to the possibility of reversion of ownership arising from the non-
fulfillment of the resolutory condition.

Be that as it may, there is one thing which militates against the claim of
Quijada.

Sale, being a consensual contract, is perfected by mere consent, which is

manifested the moment there is a meeting of the minds 17 as to the offer and
acceptance thereof on three (3) elements: subject matter, price and terms of
payment of the price. 18 

Ownership by the seller on the thing sold at the time of the perfection of the
contract of sale is not an element for its perfection.
 What the law requires is that the seller has the right to transfer
ownership at the time the thing sold is delivered. 19 
 Perfection per se does not transfer ownership which occurs upon the
actual or constructive delivery of the thing sold. 20 
 A perfected contract of sale cannot be challenged on the ground of non-
ownership on the part of the seller at the time of its perfection; hence,
the sale is still valid.

The consummation, however, of the perfected contract is another matter.

 It occurs upon the constructive or actual delivery of the subject matter to
the buyer when the seller or her successors-in-interest subsequently
acquires ownership thereof.
 Such circumstance happened in this case when Trinidad Quijada's heirs
and successors-in-interest became the owners of the subject property
upon the reversion of the ownership of the land to them.
 Consequently, ownership is transferred to respondent Mondejar and
those who claim their right from him. Article 1434 of the New Civil
Code supports the ruling that the seller's "title passes by operation of law
to the buyer." 21 This rule applies not only when the subject matter of the
contract of sale is goods, 22 but also to other kinds of property, including
real property. 23

Concept of Sale: Page 3

 Sales
From the lectures of Atty. Zyra Montefolca
Digests prepared and edited by: John Glenn Lambayon
  If we recall, Fortunato was an illiterate. However, Lumayno failed to
show that the terms of contract have been fully explained to Fortunato.
Perpetua Vda. De Ape v. Court of Appeals
 The purpose of Article 1332 is to protect a party to a contract
disadvantaged by illiteracy, ignorance, mental weakness or some other
Preliminary Notes: handicap.
Facts:
All in all, because Fortunato was an illiterate and Lumayno failed to explain
 Lot No. 2319 was registered in the name of Cleopas Ape, the ownership
the contents properly to him, Fortunato’s consent was not spontaneously
of which was transferred to her heirs upon her death.
given and therefore vitiated. As a result, the contract of sale was annulled by
 Generosa Lumayno filed a case for “Specific Performance of a Deed of the Supreme Court.
Sale with Damages” against Fortunato and Perpetua because she wanted
to register the claimed sale transaction. Lumayno alleged that:
 The parties entered into a contract of sale for a consideration of
P5,000 involving Fortunato’s share in Lot No. 2319.
 The agreement was contained in a receipt prepared by the son-in-law
of Lumayno.
 Fortunato and Perpetua denied the allegations and claimed that
Fortunato never sold his share in Lot No. 2319 and that his signature
was a forgery.
 They also claimed that if there was an actual sale, they are invoking
their right to redeem the property.
 Lumayno alleged that the property was covered by a lease contract.
Fortunato went to her store at the time when the lease contract was about
to expire. But since Lumayno had no interest in renewing their lease
agreement, they agreed instead to enter into a contract of sale.
 As for Perpetua, they claimed that Lot No. 2319 was not yet formally
subdivided. They only went to Lumayno’s house to collect the rental
payments but managed only to collect P30.
 She claimed that Lumayno made Fortunato sign the receipt, but the
contents were never explained to them.
 Fortunato was an illiterate and only learned how to write his name.

Issue: WON Fortunato the receipt signed by Fortunato proves the existence
of a contract of sale.

Ruling: The contract of sale between Fortunato and Lumayno is annulled on

the ground of vitiated consent.

A contract of sale is a consensual contract, thus, it is perfected by mere

consent of the parties. 
 The essence of consent is the agreement of the parties on the terms of
the contract, the acceptance by one of the offer made by the other.  It is
the concurrence of the minds of the parties on the object and the cause
which constitutes the contract. 
 The area of agreement must extend to all points that the parties deem
material or there is no consent at all.

To be valid, consent must meet the following requisites:

 (a) it should be intelligent, or with an exact notion of the matter to which
it refers;
 (b) it should be free and
 (c) it should be spontaneous.  Intelligence in consent is vitiated by error;
freedom by violence, intimidation or undue influence; spontaneity by
fraud

In this jurisdiction, one who alleges fraud or mistake must substantiate his
allegation.
 For there is a presumption that a person takes ordinary care for his
concerns and that private dealings have been entered into fairly and
regularly
 The exception is provided under Article 1332 of the Civil Code, which
provides that:
 “When one of the parties is unable to read, or if the contract is in a
language not understood by him, and mistake or fraud is alleged, the
person enforcing the contract must show that the terms thereof have
been fully explained to the former”

In this case, it was incumbent upon Lumayno to show that the contents of the
receipt have been fully explained because she was the one enforcing the
contract.

Concept of Sale: Page 4

 Sales
From the lectures of Atty. Zyra Montefolca
Digests prepared and edited by: John Glenn Lambayon

Celestino Co vs. Collector - 99 Phil 841 (GR No. L-8506, August 31, 1956)

Concept of Sale: Page 5