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Doctrines:  

Valencia  vs  Cabanting  

Introduction  

Reason   for   disqualification   of   lawyers   provided   by   Art.  
1491:   “Public   policy   prohibits   the   transactions   in   view   of  
the  fiduciary  relationship  involved.  It  is  intended  to  curtail  
any  undue  influence  of  the  lawyer  upon  his  client.  

Engineering  and  Machinery  Corp  vs  CA  
A   contract   for   a   piece   of   work   is   when   the   goods   to   be  
manufactured   especially   for   the   customer   and   upon   his  
special   order,   and   not   for   the   general   market.   A   contract   of  
saleis   a   contract   for   the   delivery   of   an   article   at   a   certain  
price   which   the   vendor   in   the   ordinary   course   of   his  
business   manufactures   or   procures   for   the   general   market,  
whether  the  same  is  on  hand  or  not.  
Manila  container  Corp  vs  PNB  
The  absence  of  the  occurrence  of  all  the  essential  elements,  
the  giving  of  earnest  money  cannot  establish  the  existence  
of  a  perfected  contract  of  sale  
Buenaventura  vs    CA  
Once  there  is  meeting  of  the  minds  as  to  the  price,  the  sale  
is  valid,  despite  the  manner  of  its  actual  payment,  or  even  
when   there   has   been   breach   thereof.   If   real   price   is   not  
stated,   sale   is   valid   but   subject   to   reformation.   If   price   is  
simulated   and   there   was   no   meeting   of   the   minds,   the  
contract  is  VOID.  
Inchausti  &  Co  
the   distinction   between   a   sale   and   a   contract   for   work,  
labor,   and   materials   is   tested   by   the   inquiry   of   whether   the  
thing   transferred   is   one   not   in   existence   and   which   never  
would  have  existed  but  for  the  order  of  the  party  desiring  
to  acquire  it.,  or  a  thing  which  would  have  existed  and  been  
the  subject  of  sale  to  some  other  person,  even  if  the  order  
had  not  been  given.    

Dirctor  of  Lands  vs  Ababa  
1491   does   not   apply   to   contingent   fee   arrangements.   It  
recognized  that  contigent  fee  contract  is  always  subject  to  
the   supervision   of   the   courts   with   respect   to   the   stipulated  
amount  and  may  be  reduced  or  nullified.  
The   transfer   or   assignment   of   the   property   in   litigation  
takes  effect  only  after  the  finality  of  a  favorable  judgment.  
Subject  Matter  
Melliza  vs  City  of  Iloilo  
The   requirement   that   a   sale   must   have   for   its   object   a  
determinate   thing   is   fulfilled   as   long   as,   at   the   time   the  
contract   entered   into,   the   object   of   the   sale   is   capable   of  
being  made  determinate  without  the  necessity  of  a  new  or  
further  agreement  between  the  parties.  
National  Grains  Authority  vs  IAC  
Specific   quantity   of   the   subject   matter   is   not   important  
when  it  is  still  possible  to  determine  the  quantity  “without  
the   need   of   a   new   contract   between   the   parties,”   and  
therefore   complies   with   the   requisite   of   being  
determinable.    
Price  and  other  consideration  
Balatbat  vs  CA  

Parties  to  a  Sale  

A  contract  of  sale  being  consensual,  it  is  perfected  by  mere  
consent   of   the   parties.   Delivery   of   the   thing   bought   or  
payment  of  the  price  is  not  necessary  for  the  perfection  of  
the   contract;   and   failure   of   the   vendee   to   pay   the   price  
after  the  execution  of  the  contract  does  not  make  the  sale  
null   and   void   for   lack   of   consideration   but   results   at   most  
default  on  the  part  of  the  vendee,  for  which  the  vendor  may  
exercise  his  legal  remedies.  

Domingo  vs  CA  

Ong  vs  Ong  

The   general   rule   is   that   a   person   is   not   incompetent   to  
contract   merely   because   of   advanced   years   or   by   reason   of  
physical   infirmities.   However,   when   such   age   or   infirmities  
have   impaired   the   mental   faculties   so   as   to   prevent   the  
person   from   properly,   intelligently,   and   firmly   protecting  
her  property  rights  then  she  is  undeniably  incapacitated.  

The   SC   considered   the   validity   of   a   sale   of   real   property  
where  the  consideration  stated  in  the  deed  was    “P1.00  and  
other  valuable  considerations.”  

Celestino  Co  
Implies  that  the  test  of  “special  orders”  under  Art.  1467  of  
the   Civil   Code   is   not   one   of   timing,   or   habit,   but   actually  
must   be   drawn   from   the   nature   of   the   work   to   be  
performed  and  the  products  to  be  made.  

Macariola  vs  Asuncion  
Prohibition  under  1491  is  applicable  only  during  period  of  
litigation,”   should   cover   not   only   lawyers   but   judges   as  
well.   The   particular   provision   relating   to   judges   covered  
only   “property   and   rights   in   litigation”   which   must   take  
place   during   the   pendency   of   the   litigation   involving   the  
property.  

Since   no   evidence   was   adduced   to   show   that   the  
consideration   stated   in   the   deed   was   not   paid   or   was  
simulated,   it   is   presumed   to   exist   under   Art.   1354   of   the  
NCC.  
Bagnas  vs  CA  
The   sale   of   real   property   where   the   consideration   stated  
was   “P1.00,   and   services   rendered,   being   rendered   and   to  
be  rendered”  

 Inc  vs  Morato   A   definite   agreement   on   the   manner   of   payment   of   the   purchase   price   was   an   essential   element   in   the   formation   of  a  binding  and  enforceable  contract  of  sale.   an  option  contract  would  be  void.   that   is   equivalent   to   an   offer   being   accepted   prior   to   withdrawal   and   would   constitute   to   a   valid   and   binding   sale   (Recently.   Tayengco  vs  CA   Inadequacy  of  price  may  be  a  ground  fot  the  cancellation  of     a   voluntary   contract   of   sale   which   is   otherwise   free   from   invalidating   defects   such   as   vitiated   consent.  there  has  been  a  movement  towards  the   previously   discarded   ruling   Southwestern   sugar   ruling   where   it   held   that   when   an   option   is   not   supported   by   a   separate   consideration   it   is   void   and   can   be   withdrawn   notwithstanding  the  acceptance  made  by  the  offeree.   The   option   is   not   of   itself   a   purchase.  Inc   An  option  contract  is  one  “necessarily  involving  the  choice   granted   to   another   for   a   distinct   and   separate   consideration   as   to   whether   or   not   to   purchase   a   determinate  thing  at  a  predetermined  fixed  price.  Inc  vs  Mayfair  Theather  .  as  a  contract.   certain   terms   and   conditions.   Without  a  consideration  separate  from  the  purchase  price.   the   court   said   that   this   is   a   valid   sale.   and   indicating   the   balance   of   the   purchase   price.   Riviera  Filipina  Inc  vs  CA   Rule:  The  seller  must  offer  the  same  terms  and  conditions   to   the   person   who   has   the   right   of   first   refusal.  but  would   still   constitute   a   valid   offer.   Where   the   parties   agreed   on   the   determinate   subject   matter  and  the  total  purchase  price  but  not  on  the  manner   of   payment   of   the   agreed   price.     Nietes  vs  CA   The   offeree   in   an   option   contract   may   validly   exercise   his   right  by  merely  advising  the  debtor  of  the  decision  to  buy   and   expressing   his   readiness   to   pay   the   stipulated   price.   or   in   compliance   with.   and   it   is   only   then   that   the   principle   of   substantial   compliance  would  have  relevance.   with   specific   obligation   to   transfer   the   title   upon   full   payment   of   the   balance.   Formation  of  Sale   Adelfa  properties.   The   option   need   not   be   coupled  with  actual  payment.   the   court   held   that   although   a   downpayment   had   already   been   made   by   the   buyer   and   received   by   the   seller.  did  not  provide   further   stipulations   as   to   the   full   contract   price   of   the   manner  of  payment  thereof.  but  merely  secures  the  privilege  to  buy.   there   was   still   no   valid   sale.   Carceller  vs  CA   The  acceptance  or  exercise  of  the  option  must  still  be  made   within  the  option  period  to  give  rise  to  a  valid  and  binding   sale.   Equatorial  Realty  Dev.   the   price   and   the   manner   of   payment   thereof.  but  a  sale  of  the  right  to  purchase.         The  prevailing  doctrine  is  that  a  right  of  first  refusal  means   identity   of   the   terms   and   conditions   to   be   offered   to   the   lessee   and   all   other   prospective   buyers   and   a   contract   of   .   even   if   shocking  to  the  conscience.   would   show   that   the   price   stated   was   false   and   fictitious   and  no  other  true  and  lawful  cause  having  been  shown.   Navarro  vs  Sugar  Producer’s  Corp   When   the   manner   of   payment   of   the   purchase   price   is   discussed   after   “acceptance”   then   such   “A”   did   not   produce   a   binding   and   enforceable   contract   of   sale.   provided   that   the   same   is   available   and   actually   delivered   to   the   debtor   upon   execution   and   delivery   by   him   of   the   corresponding   deed   of   sale.   or   under.The   court   noted   the   gross   disproportion   between   the   consideration   stipulated   and   the   value   of   the   property.   so   that   if   the   option   is   exercised   prior   to   its   withdrawal.   which   essentially   constitutes   obligations   to   do   and   not   subject  to  an  action  for  specific  performance.   without   expressly   overturning   nor   modifying   the   Sanchez  doctrine.   Sanchez  vs  Rigos   Cruz  vs  Fernando   Absence   of   any   stipulation   on   the   manner   of   payment   of   the   purchase   price   would   support   the   position   that   the   agreement   between   the   parties   was   really   a   contract   to   sell.  inc  vs  CA   An   option   is   a   continuing   offer   or   contract   by   which   the   owner  stipulates  with  another  that  the  latter  shall  have  the   An  option  contract  by  its  statutory  definition  can  only  arise   when   the   minds   of   the   parties   have   met   as   to   the   specific   object   thereof.000   as   “partial   payment”   for   the   real   property  described  by  titles  in  the  receipt.  it  is  not   a  sale  of  property.   Coronel  vs  CA   The  seller  executed  a  “Receipt  of  Down  Payment”  in  favor   of   the   buyer   acknowledging   the   receipt   therein   of   the   downpayment  as  purchase  price  of  the  property  described   therein.   it   seems   that.  or  which  gives  to  the  owner  of  the  property  the   right   to   sell   or   demand   a   sale.   Kilosbayan.     The   circumstances   of   the   case   show   that   the   seller   need   not   offer   it   to   the   person   who   has   the   right   because   of   the   repeated  insistence  of  one  specific  price.  The  court  ruled  that  there  was   no  valid  sale.   Cheng  vs  Genato   The   receipt   signed   by   the   seller   acknowledging   receipt   of   the   sum   of   P50.   there   was   no   complete  meeting  of  the  minds   Velasco  vs  CA   right   to   buy   the   property   at   a   fixed   price   within   a   certain   time.

 while  valid.   but   may   even   forfeit   it   depending   on   the   terms   of   the   option   Earnest   money   is   given   only   where   there   is   a   contract   of   sale.sale   entered   into   in   violation   of   a   right   of   first   refusal   of   another  person.   The   essential   requisites   of   sale   must  be  present.   Calling   a   certain   fund   earnest   money   cannot   by   itself   create   a   contract   of   sale.  is  rescissible.  and     C) When   EM   is   given.   the   buyer   is   bound   to   pay   the   balance.     B) EM  is  given  only  where  there  is  already  a  sale  not   yet  perfected.   while   OM   is   the   money   given   as   a   distinc   consideration   for   an   option  contract.   payment   in   an   amicable   settlement   perfects  the  contract  of  sale   Villongco  Realty  Company  vs  Bormaheco   A  clarificatory  acceptance  is  not  a  counter  offer   Oesmer  vs  Paraiso  Development  Corp   Earnest   money   and   “option   money”   are   not   the   same   but   distinguished  thus:   A) EM   is   part   of   the   purchase   price.   he   is   not   required   to   buy.   while   when   the   would-­‐be   buyer   gives   option   money.     Macion  vs  Guiani   On   a   contract   to   sell.     .