Gaite v.

Fonacier
REYES, J.B.L., J.:

Facts:

Gaite was appointed by Fonacier as attorney-in-fact to contract any party for the
exploration and development of mining claims. Gaite executed a deed of assignment in favor of a
single proprietorship owned by him. For some reasons, Fonacier revoked the agency, which was
acceded to by Gaite, subject to certain conditions, one of which being the transfer of ores extracted
from the mineral claims for P75,000, of which P10,000 has already been paid upon signing of the
agreement and the balance to be paid from the first letter of credit for the first local sale of the iron
ores. To secure payment, Fonacier delivered a surety agreement with Larap Mines and some of its
stockholders, and another one with Far Eastern Insurance. When the second surety agreement
expired with no sale being made on the ores, Gaite demanded the P65,000 balance. Defendants
contended that the payment was subject to the condition that the ores will be sold.

Issue:

(1) Whether the sale is conditional or one with a period

(2) Whether there were insufficient tons of ores

Held:

(1) The shipment or local sale of the iron ore is not a condition precedent (or suspensive) to
the payment of the balance of P65,000.00, but was only a suspensive period or term. What
characterizes a conditional obligation is the fact that its efficacy or obligatory force (as
distinguished from its demandability) is subordinated to the happening of a future and uncertain
event; so that if the suspensive condition does not take place, the parties would stand as if the
conditional obligation had never existed.

A contract of sale is normally commutative and onerous: not only does each one of the
parties assume a correlative obligation (the seller to deliver and transfer ownership of the thing
sold and the buyer to pay the price),but each party anticipates performance by the other from the
very start. While in a sale the obligation of one party can be lawfully subordinated to an uncertain
event, so that the other understands that he assumes the risk of receiving nothing for what he gives
(as in the case of a sale of hopes or expectations,emptio spei), it is not in the usual course of
business to do so; hence, the contingent character of the obligation must clearly appear. Nothing
is found in the record to evidence that Gaite desired or assumed to run the risk of losing his right
over the ore without getting paid for it, or that Fonacier understood that Gaite assumed any such
risk. This is proved by the fact that Gaite insisted on a bond a to guarantee payment of the
P65,000.00, an not only upon a bond by Fonacier, the Larap Mines & Smelting Co., and the
company's stockholders, but also on one by a surety company; and the fact that appellants did put
up such bonds indicates that they admitted the definite existence of their obligation to pay the
balance of P65,000.00.
 The appellant have forfeited the right court below that the appellants have forfeited the
right to compel Gaite to wait for the sale of the ore before receiving payment of the balance of
P65,000.00, because of their failure to renew the bond of the Far Eastern Surety Company or else
replace it with an equivalent guarantee. The expiration of the bonding company's undertaking on
December 8, 1955 substantially reduced the security of the vendor's rights as creditor for the
unpaid P65,000.00, a security that Gaite considered essential and upon which he had insisted when
he executed the deed of sale of the ore to Fonacier.

(2) The sale between the parties is a sale of a specific mass or iron ore because no provision
was made in their contract for the measuring or weighing of the ore sold in order to complete or
perfect the sale, nor was the price of P75,000,00 agreed upon by the parties based upon any such
measurement.(see Art. 1480, second par., New Civil Code). The subject matter of the sale is,
therefore, a determinate object, the mass, and not the actual number of units or tons contained
therein, so that all that was required of the seller Gaite was to deliver in good faith to his buyer all
of the ore found in the mass, notwithstanding that the quantity delivered is less than the amount
estimated by them.

Mananzala vs Court of Appeals

GR 115101, March 2, 1998
MENDOZA, J.:

Facts:

Petitioner Fidela Mananzala owned a parcel of land located in Quezon City, and in actual
possession of the land since 1955 by virtue of a conditional sale made in her favor by the PHHC,
now NHA. 1960, however, the PHHC awarded the land to Nestor and Elisea Mercado. Petitioner
contested the award in court. She claimed precedence not only in actual occupation of the land but
also in application for its purchase. Her right to the land was upheld the courts. In 1984, petitioner
paid in full the price of the land. The NHA therefore executed a deed of sale in her favor on January
14, 1985. Private respondent Corazon Aranez brought an action for specific performance against
petitioner to enforce a alleged deed of sale covering the same lot in 1960. The contract stipulated
that title to the land shall be transferred to private respondent within 30 days after full payment of
the purchase price by petitioner to the PHHC. Private respondent alleged that petitioner refused,
despite repeated demands made by her, to comply with the stipulation in their contract. Petitioner
denied selling the land to private respondent. The trial court dismissed the complaint. Although
finding petitioner's signature on the deed to be genuine, it nevertheless ruled that there was no
perfected contract of sale because petitioner never really intended to sell the land. Furthermore,
the trial court also found the alleged contract to be null and void because, at the time of the sale,
petitioner was not yet the owner thereof. The Court of Appeals reversed the decision. It held that
there was a meeting of the minds between the parties as evidenced by the signature of the petitioner
on the deed of sale which the NBI found to be genuine. The notarization of the deed gave rise to
the presumption of its regularity. The Court of Appeals further held that petitioner could validly
sell the land even before the actual award to her pursuant to Art. 1461 of the Civil Code, which
provides that things having a potential existence may be the object of a contract of sale.

Issue: Whether or not the contract between petitioner and private respondent is valid and binding
Held:

Yes. The SC affirmed the CA’s decision. The petitioner's contention that the sale to private
respondent is void because it was made within one year after the title to the property was issued in
the name of petitioner, while raised by petitioner in her answer in the trial court, was not passed
upon and she did not urge it anymore except now. As already noted, the trial court based its
decision on its finding that the sale was void on the ground that there was no meeting of the minds
of the parties. When its decision was appealed, petitioner did not urge her original defenses to
uphold the decision in her favor. She merely relied on the ruling of the trial court. The appellate
court, in reversing the trial court, simply considered the issues raised by the trial court's decision,
namely, whether petitioner's signature on the deed was a forgery, whether there was a meeting of
the minds of the parties, and whether there could be a sale of future property. The question whether
the sale was void because it was made within the one-year period of prohibition to petitioner as
awardee was never briefed or in any way argued below. For all intents and purposes, therefore,
petitioner waived this ground and cannot now urge it as ground for reversing the decision of the
Court of Appeals.

G.R. No. 190823 : April 4, 2011

DOMINGO CARABEO, Petitioner, v. SPOUSES NORBERTO and SUSAN DINGCO,

Respondents.
CARPIO MORALES, J.:

FACTS:

On July 10, 1990, Domingo Carabeo (petitioner) entered into a contract denominated as
“Kasunduan sa Bilihan ng Karapatan sa Lupa” (kasunduan) with Spouses Norberto and Susan
Dingco (respondents) whereby petitioner agreed to sell his rights over a 648 square meter parcel
of unregistered land situated in Purok III, Tugatog, Orani, Bataan to respondents for P38,000.

Upon the signing of the contract, the respondents paid an initial amount of P10,000 and the
remaining balance would be paid on September 1990. However, when the respondents were about
to pay the balance, the petitioner refused to accept the amount due to an on-going dispute over the
land. Nevertheless, the respondents occasionally gave the petitioner small sums of money which
totaled P9,100. These amounts were allegedly given due to the request of the petitioner.

Despite the respondents insistence of paying the remaining balance of P19,800, the
petitioner remained firm in his refusal. He reasoned that he would register the land first. However,
when the dispute was finally settled and the registration of the land was made, the petitioner still
declined to accept the payment. Thus, forcing the respondents to file a complaint before the
Katarungan Pambarangay. Nevertheless, the parties were not able to reach a settlement. Hence,
the filing of a complaint for specific performance before the RTC.

In the petitioner’s Answer, he alleged that the sale was void for lack of object certain. The
kasunduannot having specified the metes and bounds of the land. In addition to that, he alleged
that assuming that the validity of the kasunduan is upheld, the respondent failed to comply with
their reciprocal obligation in paying the balance of the P28,000 on September 1900. Thus, forcing
him to accept the installment payments.

After the case was submitted for decision, the petitioner passed away. However, the records
do not show that petitioner’s counsel informed the lower court of his death and that proper
substitution was effected. The RTC ruled in favor of the respondents ordering them to sell their
rights over the land and to pay the costs of suit. The CA affirmed the decision of the lower court.

ISSUES/RULING:
Object certain of the contract

That the kasunduan did not specify the technical boundaries of the property did not render
the sale a nullity. The requirement that a sale must have for its object a determinate thing is
satisfied as long as, at the time the contract is 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.
lack of spousal consent
This was raised only on appeal, hence, will not be considered, in the present case, in the interest
of fair play, justice and due process.

Carabeo’s Death

Carabeo’s son: death of Carabeo causes the dismissal of the action filed by N & D; resp’ cause of
action being an action in personam.
Bonilla v. Barcena: The question as to whether an action survives or not depends on the nature of
the action and the damage sued for. In the causes of action which survive, the wrong complained
[of] affects primarily and principally property and property rights, the injuries to the person being
merely incidental, while in the causes of action which do not survive, the injury complained of
is to the person, the property and rights of property affected being incidental.
Assuming arguendo, that the kasunduan is deemed void, there is a corollary obligation of Carabeo
to return the money paid by Norberto & Dingco, and since the action involves property rights, it
survives.
Trial on the merits was already concluded before Carabeo died. Since the TC was not informed
of Carabeo’s death, it may not be faulted for proceeding to render judgment without
ordering his substitution. Its judgment is thus valid and binding upon Carabeo’s legal
representatives or successors-in-interest, insofar as his interest in the property subject of the
action is concerned.
The death of a client immediately divests the counsel of authority. Thus, in filing a Notice of
Appeal, Carabeo’s counsel of record had no personality to act on behalf of the already deceased
client who, it bears reiteration, had not been substituted as a party after his death. The TC’s decision
had thereby become final and executory, no appeal having been perfected.
Petition Denied.
NATIONAL GRAINS AUTHORITY v. IAC, GR No. 68741, 1988-01-28
MEDIALDEA, J.:

Facts:

On August 23, 1979, private respondent Leon Soriano offered to sell palay grains to NFA
through William Cabal, the provincial manager in Tuguegarao. The documents submitted were
processed, and he was given a quota of 2,640 cavans, which is the maximum number of cavans he
may sell to NFA. On the same day and on the following day, Soriano delivered 630 cavans, which
were not rebagged, classified and weighed. When he demanded payment, he was told that payment
will be held in abeyance since Mr. Cabal was still investigating on an information received that
Soriano was not a bona fide farmer. Instead of withdrawing the palay, Soriano insisted that the
palay grains be delivered and paid. He filed a complaint for specific performance. Petitioners
contend that the delivery was merely made for the purpose of offering it for sale because until the
grains were rebagged, classified and weighed, they are not considered sold.

Issue:

Whether there was a perfected sale

Held:

Soriano initially offered to sell palay grains produced in his farmland to NFA. When the
latter accepted the offer by noting in Soriano's Farmer's Information Sheet a quota of 2,640 cavans,
there was already a meeting of the minds between the parties. The object of the contract, being the
palay grains produced in Soriano's farmland and the NFA was to pay the same depending upon its
quality. The fact that the exact number of cavans of palay to be delivered has not been determined
does not affect the perfection of the contract. Article 1349 of the New Civil Code provides: ". . ..
The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract,
provided it is possible to determine the same, without the need of a new contract between the
parties." In this case, there was no need for NFA and Soriano to enter into a new contract to
determine the exact number of cavans of palay to be sold. Soriano can deliver so much of his
produce as long as it does not exceed 2,640 cavans. From the moment the contract of sale is
perfected, it is incumbent upon the parties to comply with their mutual obligations or "the parties
may reciprocally demand performance" thereof.
GR No. 168078, January 13, 2016
Fabiano Cahayag and Conrado Rivera (Petitioners) v Commercial Credit Corp. et al
(Respondents)

GR No. 168357 January 13, 2016

Dulos Realty and Development et al (Petitioners) v Commercial Credit Corp. et al
(Respondents)
First Division
Ponente: Sereno, C.J.

Nature of Action: Complaint for annulment of Sheriff’s sale and other documents.
FACTS:
Petitioner Dulos Realty was the registered owner of certain residential lots covered by
Transfer Certificate of Title (TCT) Nos. S-39767, S-39775, S-28335, S-39778 and S-29776,
located at Airmen's Village Subdivision, Pulang Lupa II, Las Pinas, Metro Manila. Dulos Realty
obtained a loan from respondent CCC in the amount of P300,000. To secure the loan, the realty
executed a Real Estate Mortgage over the subject properties in favor of respondent. The mortgage
was duly annotated on the certificates of title. Thereafter, CCC on various dates, entered into
contract to sell covering the subject properties with petitioners. When Dulos Realty defaulted in
payment, CCC initiate an extra judicial foreclosure proceeding and the auction sale was held with
CCC as the highest bidder. An Affidavit of Consolidation in favor of respondent CCC was
annotated on the corresponding titles to the properties. By virtue of the affidavit, the TCT’s in the
name of Dulos Realty were all cancelled and new TCT’S in the name of CCC were issued on the
same day. On 10 December 1983, after the consolidation and cancellation of title, Dulos Realty
entered in to a Deed of Absolute Sale with petitioner Baldoza over one of the subject properties.
On 21 December 1983, respondent CCC, through a Deed of Absolute Sale, sold to respondent Qua
the same subject properties. The sale was duly annotated on the corresponding titles to the
properties and the TCT’s in the name of CCC were accordingly cancelled and new TCTs were
issued in the name of respondent Qua. Petitioners filed a Complaint against respondents for the
"Annulment of Sheriff's Sale and Other Documents. The Complaint alleged that petitioners were
owners of the properties in question by virtue of Contracts of Sale individually executed in their
favor. Respondents failed to file an answer within the reglementary period. Subsequently, they
were declared in default. The RTC ruled that the foreclosure of the mortgage over the subject lots,
as well as the housing units, was not valid. The CA accordingly reversed and set aside the RTC
Decision, dismissed the case for lack of merit, and ordered petitioners to surrender possession of
the properties to respondent Qua.

ISSUE:
Whether or not the contract of sale entered into by Dulos Realty with petitioner Baldoza is
valid.

RULING:
Yes the sale is valid. The Court rules out ownership as a requirement for the perfection of
a contract of sale. For all that is required is a meeting of the minds upon the object of the contract
and the price.
 The fact that Dulos Realty was no longer the owner of the real property at the time of the
sale led the CA to declare that the Contract of Sale was null and void. On this premise, the appellate
court concluded that respondent Qua had a better title to the property over petitioner Baldoza. We
find no error in the conclusion of the CA that respondent Qua has a better right to the property.
The problem lies with its reasoning. We therefore take a different route to reach the same
conclusion.
Undeniably, there is an established rule under the law on sales that one cannot give what
one does not have (Nemo dat quod non habet). The CA, however, confuses the application of this
rule with respect to time. It makes the nemo dat quod non habet rule a requirement for
the perfection of a contract of sale, such that a violation thereof goes into the validity of the sale.
But the Latin precept has been jurisprudentially held to apply to a contract of sale at its
consummation stage, and not at the perfection stage. Cavite Development Bank v. Spouses Syrus
Lim puts nemo dat quod non habet in its proper place. Initially, the Court rules out ownership as a
requirement for the perfection of a contract of sale. For all that is required is a meeting of the minds
upon the object of the contract and the price. The case then proceeds to give examples of the rule.
It cites Article 1434 of the Civil Code, which provides that in case the seller does not own the
subject matter of the contract at the time of the sale, but later acquires title to the thing sold,
ownership shall pass to the buyer. The Court also refers to the rule as the rationale behind Article
1462, which deals with sale of "future goods." Case law also provides that the fact that the seller
is not the owner of the subject matter of the sale at the time of perfection does not make the sale
void.
Consequently, it was not correct for the CA to consider the contract of sale void. The CA
erroneously considered lack of ownership on the part of the seller as having an effect on the validity
of the sale. The sale was very much valid when the Deed of Absolute Sale between the parties was
executed on 10 December 1983, even though title to the property had earlier been consolidated in
favor of respondent CCC as early as 10 November 1983. The fact that Dulos Realty was no longer
the owner of the property in question at the time of the sale did not affect the validity of the
contract. In this case, the delivery coincided with the perfection of the contract. The Deed of
Absolute Sale covering the real property in favor of petitioner Baldoza was executed on 10
December 1983. As already mentioned, Dulos Realty was no longer the owner of the property on
that date. Accordingly, it could not have validly transferred ownership of the real property it had
sold to petitioner.
Thus, the correct conclusion that should be made is that while there was a valid sale,
there was no valid transfer of title to Baldoza, since Dulos Realty was no longer the owner at the
time of the execution of the Deed of Absolute Sale.