Law 203- Sales: Sale by one having a voidable title

By: Mithi Evasco Villarmea

it from the person in possession of it. There was a valid
transmission of ownership from Tagatac to Feist by
Article 1458. By the contract of sale one of the virtue of the sale and delivery of the car to the swindler.
contracting parties obligates himself to transfer the The fraud and deceit practiced on her earmarked the
ownership of and deliver a determinate thing, and the sale as a voidable contract. As long as no action was
other to pay therefore a price certain in money or its taken for annulment, the contract remained binding. As
equivalent. the car was again sold to another, the title acquired by
the subsequent purchaser was an indefeasible one, even
- In the old Code, the obligation is merely to
as against the original owner
deliver the thing, so that even if the seller is not
the owner, he may validly sell, subject to the Alcantara-Daus v. de Leon, 404 SCRA 74
warranty to maintain the buyer in legal and
peaceful possession of the thing sold. FACTS: Hermoso de Leon inherited from his father a
certain piece of land by virtue of a deed of extra-judicial
Thus, under the new Civil Code, the contract of sale partition. To arrange the documents for the properties of
has been divided into two stages: his parents, Hermoso engaged the services of Atty. Juan.
After the death of Atty. Juan, documents surfaced
1. Perfection of the contract – the subject or the
revealing that the properties has been conveyed to
determinate thing need not yet be owned by the
Hermoso’s brothers and sisters and, Juan and his sisters
seller;
though Hermoso did not intend such. A deed of extra-
2.
judicial partition with quitclaim in favour of Rodolfo
Article 1459. The thing must be licit and the vendor must de Leon surfaced with Hermoso’s signature in it (which
have a right to transfer the ownership thereof at the was actually forged). Rodolfo sold the land to Aurora
time it is delivered. Alcantara. Hermoso questions the sale. RTC ruled that
Hermoso’s claim on the land is barred by laches since 18
- This stems from the principle: nemo dat quad non years has passed since the land was sold. It also ruled
habet (no one gives what he doesn't have). that the deed of extra-judicial partition, being a notarial
document, is presumed authentic. CA reversed.
The question that is still debated is whether a seller can
sell a property not owned by him. If so, when should ISSUE: Was the sale of the land to Alcantara valid?
ownership be transferred to a buyer? There are two
views regarding this matter. RULING: No. There was no valid delivery as Rodolfo is
not the rightful owner of the land. A contract of sale is
Philippine view. The view in our jurisdiction is that a perfected by mere consent, upon meeting of the minds,
seller need not be the owner of the property subject of on the offer and acceptance thereof based on subject
sale at the time of sale or perfection of sale, but he must matter, price and terms of payment. At this stage, seller’s
be the owner at the time when said property is to be ownership of the land is not an element in the perfection
delivered to the buyer. of the contract. However, this contract creates an
obligation on the part of the seller to transfer ownership
Views from other jurisdictions. Manresa, a famous Spanish
and to deliver the subject matter of the contract. It is
Civil Law commentator which reflects the view in Spain,
during delivery that the law requires the seller to have
argued that such sale of property belonging to another
the right to transfer ownership of the thing sold.
and not the vendor is not valid for the simple reason that
he cannot transmit what he does not own. This implies It is through delivery or tradition that the buyer acquires
that sale is basically a transaction involving the transfer the real rights of ownership over the thing sold. At the
of ownership. time of delivery, Rodolfo was not the owner of the land, thus
the consummation of the contract and the consequent transfer
Tagatac v. Jimenez, 53 O.G. 3798
would, then, depend on whether he subsequently acquired
FACTS: The plaintiff sold her car to Feist, who sold it to ownership of the land in accordance with Art 1434 of the Civil
Sanchez, who sold it to Jimenez. When the payment Code. But the extra-judicial partition was found to be
check issued to Tagatac by Feist was dishonored, the forged hence there was no valid transfer of ownership—
plaintiff sued to recover the vehicle from Jimenez on the Rodolfo never became the owner of the land. Possession
ground that she had been unlawfully deprived of it by in good faith and acquisition by virtue of prescription
reason of Feist's deception. cannot be sustained if it is in derogation of the rights of
the registered owner.
RULING According to Article 559, although possession
of movable property acquired in good faith is equivalent Lundberg v. Gancayco, 50 O.G. 169
to a title, one who has lost any movable or has been
FACTS: On July 10, 1948, Surplus Property Commission
unlawfully deprived thereof, may nevertheless recover
sold to one Jose Montilla three cranes for the amount of
 Law 203- Sales: Sale by one having a voidable title
By: Mithi Evasco Villarmea
P937.13. On July 15, 1948, before the cranes were P300,000 shall be fulfilled by Dominador two months
withdrawn from the stockyard of the Surplus Property from the date of the execution of sale, which is August
Commision, Jose Montilla sold one of them for the 1993. Three months after, Dominador filed a complaint
amount of P1,500 to the plaintiff, V.K. Lundberg. Before with the trial court a motion to deliver the owners copy
Montilla or plaintiff was able to withdraw the cranes, a of TCT, and admitted that he did not pay the
complaint was received that the sale of said cranes to P300,000 for the reason that the petitioner failed to
Montilla was irregular. Thereupon, the Surplus Property adduce proof of ownership. In time, petitioners opposed
Commission ordered the cranes be recovered and stressing the condition in the Kasunduan.
created a committee to investigate which later found out The trial court and CA both ruled in favor of the
that the cranes delivered to Montilla were not those respondent.
described in the invoice, thus, the sale to Montilla was
cancelled. On August 29, 1949, Surplus Property ISSUE: Whether or not Dominador, et al. may be
Commission advertised all of their surplus properties compelled to pay the P300,000 as agreed upon in the
which were subsequently bought by the defendant in kasunduan.
this case, Santiago Gancayco. Plaintiff filed present
RULING: No. In contracts of sale, the vendor need not
action to seize the crane that was sold to him.
possess the title to the thing sold at the perfection of the
ISSUE: Who is the rightful owner of the said crane? contract. However, the vendor must possess the title and
must be able to transfer title at the time of delivery. In a
RULING: We agree with counsel that ownership and contract of sale, title only passes to the vendee upon full
other real rights re not transmitted by mere agreement, payment of the stipulated consideration, or upon
but by delivery. This principle of civil law is well-settled. delivery of the thing sold. Under the facts of the case,
But the delivery contemplated in the law is the delivery Severina’s heirs are not in a position to transfer title.
of the very thing sold. Where the things delivered were Therefore, to insist that Dominador, et al. pay the price
not the things sold, but others not involved in the under such circumstances would result in Severina’s
transaction, the title to the thing sold remains in the heirs’ unjust enrichment. The essence of the sale is the
vendor, and the vendee acquires no right to the articles transfer of title or an agreement to transfer it for a price
wrongly delivered to him. Jose Montilla, therefore, actually paid or promised.
acquired no title to the crane in question, and when he
sold it to plaintiff on July 5, 1948, he transmitted nothing
to the latter, for in sales, which is a derivative mode of
Esguerra v. People, 108 Phil. 1078
acquiring ownership, a buyer acquires no better title
than the seller has. FACTS: Dionisio Esguerra was charged of Estafa, that
on or about January 12, 1952 to March 26, 1952, accused,
It is however, claimed that as both Montilla and plaintiff
upon representations made with Yu Yek Huy & Co, a
acted in good faith in the sale of the crane in question,
business firm duly organized and existing under and by
the latter acquired a valid title thereto. We are not
virtue of the laws of the Philippines, thru the Manager of
impressed with this contention. We are of the opinion
said company, Yu Yek Bio, that the said accused had
that, under the facts of the record, Montilla cannot be
copras ready for delivery to it, took and received the
held to be a vendor in good faith, nor the plaintiff, a
sum of P4,000 under the express obligation on the part
purchaser for value in good faith.
of the said accused to deliver to the said company the
equivalent worth of copras at its bodega. Despite
repeated demands made upon him to deliver said
Hrs. of Severina San Miguel v. CA, 364 SCRA 523 copras, accused never complied with the obligation.

FACTS: In 1974, Respondent, Dominador San Miguel, RULING: There is reason to believe that the
filed a petition with the CFI to issue title over lots in responsibility of herein appellant is only civil in nature.
dispute. However, it was declared null and void upon The language of the receipt, together with the finding of
petition of Severina San Miguel (petitioner). In 1987, the the Court of Appeals that “Factually, the appellant used
TCT for the land was issued in the names of petitioner. to supply copra not only to complainant, but also to
From 1990-1991, several writs were returned other copra exporters in Siain”, clearly indicate, in our
unsatisfied. Hence, the heirs of Severina did not pursue opinion, that the transaction was that of sale of copra for
the writs of possession and demolition, and future delivery. Obviously, an advance payment is
instead entered into a compromise with Dominador. subject to the disposal of the vendor. If the transaction
According to the compromise, the heirs were to sell the fails, the liability arising therefrom is of a civil and not of
land for P1.5M with the TCT conditioned upon the a criminal nature.
purchase of another lot, which was not yet titled, at an
additional sum of P300,000. It was agreed that the
 Law 203- Sales: Sale by one having a voidable title
By: Mithi Evasco Villarmea
of P100,000.00, P30,000.00 of which price was paid to
Conchita, and upon payment of the balance of
Mananzala v. CA, 286 SCRA 722 P14,000.00, the plaintiffs were to regain possession of the
2 hectares of land, which amounts spouses Anacleto
FACTS: Petitioner Fidela Mananzala is the registered
Nool and Emilia Nebre (defendants) failed to pay, and
owner of a parcel of land located at Bagong Pagasa,
the same day the said arrangement was made; another
Quezon City under TCT 323314 and had been in actual
covenant was entered into by the parties, whereby the
possession of said land by virtue of a conditional sale
defendants agreed to return to plaintiffs the lands in
made in her favor by the National Housing Authority.
question, at anytime the latter have the necessary
On December 14, 1984, petitioner paid in full the price of
amount; that latter asked the defendants to return the
the land under the deed of conditional sale and on
same but despite the intervention of the Barangay
January 14, 1985, the NHA executed a deed of sale in her
Captain of their place, defendants refused to return the
favor. On January 31, 1985, private respondent Corazon
said parcels of land to plaintiffs; thereby impelling the
Aranez brought this action below for specific
plaintiffs to come to court for relief. On the other hand,
performance against petitioner to enforce a deed of sale
defendants theorized that they acquired the lands in
convering the same lot allegedly entered into between
question from the DBP, through negotiated sale, and
her and petitioner on March 22, 1960. Petitoner denied
were misled by plaintiffs when defendant Anacleto Nool
selling the land and alleged that her signature was
signed the private writing, agreeing to return subject
secured through fraud and that the deed of sale was
lands when plaintiffs have the money to redeem the
void.
same; defendant Anacleto having been made to believe,
ISSUE: Whether or not the deed of sale entered into then, that his sister, Conchita, still had the right to
between Fidela Mananzala and Corazon Aranez is void. redeem the said properties.

RULING: It was held that there was a meeting of the ISSUE: Whether or not the two contracts, contract of
minds between parties as evidenced by the signature of sale and right to repurchase, are valid.
the petitioner on the deed of sale which the National
RULING: The contract of sale was void. While the civil
Bureau of Investigation found to be genuine. The
code allows a sale of future goods, this is not applicable
notarization of the deed gave rise to the presumption of
to the case at bar. The sellers can no longer deliver the object
its regularity. Petitioner can validly sell land even before the
of the sale to the buyers as the buyers themselves have already
actual award to her pursuant to Article 1461 of the Civil Code,
acquired title and delivery thereof from the rightful owner.
which provides that things having a potential existence
The contract may be deemed inoperative since it
may be the object of a contract of sale.
contemplated of an impossible service. Since the contract
of sale was inoperative, so is the right of repurchase. A
void contract cannot give rise to a valid contract.
Nool v. CA, 276 SCRA 149 Conchita cannot redeem the lands from Anacleto base
on the 2 contracts.
FACTS: One lot formerly owned by Victorio Nool (TCT
T-74950) has an area of 1 hectare. Another lot previously
owned by Francisco Nool (TCT T-100945) has an area of
3.0880 hectares. Both parcels are situated in San Manuel, Noel v. CA, 240 SCRA 78
Isabela. Spouses Conchita Nool and Gaudencio
FACTS: Gregorio and Hilaria Nanaman have a number
Almojera (plaintiffs) alleged that they are the owners of
of properties. One of which is a 34.7 ha land. Virgilio,
the subject land as they bought the same from Victorio
son of Gregorio by another woman, lived with them.
and Francisco Nool, and that as they are in dire need of
When Gregorio died, Virgilio and Hilaria managed the
money, they obtained a loan from the Ilagan Branch of
properties. The 34.7 hectare land was later sold to
the DBP (Ilagan, Isabela), secured by a real estate
Celeste. This sale was duly registered. When Hilaria
mortgage on said parcels of land, which were still
died, intestate proceedings concerning the spouses’
registered in the names of Victorino and Francisco Nool,
estate were instituted. Juan Nanaman, brother of
at the time, and for the failure of the plaintiffs to pay the
Gregorio, was appointed as special administrator, and
said loan, including interest and surcharges, totaling
was later replaced by Edilberto Noel. Celeste and heirs
P56,000.00, the mortgage was foreclosed; that within the
of spouses executed an amicable settlement where the
period of redemption, the plaintiffs contacted Anacleto
former agreed to relinquish his rights over one half of
Nool for the latter to redeem the foreclosed properties
the subject land. But this was later declared void when
from DBP, which the latter did; and as a result, the titles
some of the heirs, who did not sign, questioned the
of the 2 parcels of land in question were transferred to
agreement. Noel was then ordered to recover the land
Anacleto; that as part of their arrangement or
from Celeste. An action for reversion for title was made.
understanding, Anacleto agreed to buy from Conchita
Trial court declared that action has prescribed. CA
the 2 parcels of land under controversy, for a total price
 Law 203- Sales: Sale by one having a voidable title
By: Mithi Evasco Villarmea
ordered Celeste to return one half of the land to the heirs to the possibility of reversion of ownership arising from
plus rentals. MR-affirmed trial court decision based on the non-fulfillment of the resolutory condition.
laches.
Sale, being a consensual contract, is perfected by mere
ISSUE: Can the property be recovered from Celeste? consent, which is manifested the moment there is a
meeting of the minds as to the offer and acceptance
RULING: Only one half. The transaction between thereof on three (3) elements: subject matter, price and
Celeste and Hilaria (with Virgilio) was indeed a sale and terms of payment of the price. Ownership by the seller
not just a mortgage. However, Hilaria can only alienate on the thing sold at the time of the perfection of the
one half of the land—this being her undivided share of contract of sale is not an element for its perfection. What
the land. As for the other half, Hilaria was just a trustee the law requires is that the seller has the right to transfer
for the benefit of who may be legally entitled to it. In sale, ownership at the time the thing sold is delivered.
it is essential that the seller is the owner of the property he is Perfection per se does not transfer ownership which
selling. As to Virgilio, he is not qualified as an heir of occurs upon the actual or constructive delivery of the
Gregorio since he is an illegitimate child (the Civil Code thing sold. A perfected contract of sale cannot be
then). The acts of Virgilio can just be considered as acts challenged on the ground of non-ownership on the part
that helped Hilaria manage the conjugal property. of the seller at the time of its perfection; hence, the sale is
Laches does not apply as the administrator immediately still valid.
filed an action to recover possession and ownership of
the property. The ten-year prescriptive period has not The consummation, however, of the perfected contract is
lapse either. Celeste is ordered to return one-half of the another matter. It occurs upon the constructive or actual
land and pay rentals for the occupation of the same delivery of the subject matter to the buyer when the
portion from the year he occupied such until it is seller or her successors-in-interest subsequently acquires
returned. ownership thereof. Such circumstance happened in this
case when petitioners who are Trinidad Quijada's heirs
and successors-in-interest became the owners of the
subject property upon the reversion of the ownership of
Quijada v. CA, 299 SCRA 695
the land to them. Consequently, ownership is
FACTS: On April 5, 1956, Trinidad Quijada and her transferred to respondent Mondejar and those who
sisters executed a deed of conditional donation in favor claim their right from him. Article 1434 of the New Civil
of the Municipality of Talacogon, the condition being Code supports the ruling that the seller's "title passes by
that the land shall be used exclusively for the operation of law to the buyer." This rule applies not only
construction of a provincial high school. Trinidad when the subject matter of the contract of sale is goods,
remained in possession of the land. On July 29, 1962, but also to other kinds of property, including real
Trinidad sold the land to respondent Regalado property.
Mondejar. In 1980, the heirs of Trinidad, herein
petitioners, filed a complaint for forcible entry against
the respondent. In 1987, the proposed campus did not Azcona v. Reyes, 59 Phil. 446
materialize, and the Sangguniang Bayan enacted a
resolution donating back the land to the donor. In the FACTS: On 11 October 1920, Florentina Cordero, now
meantime, respondent Mondejar conveyed portions of deceased, executed a power of attorney authorizing her
the land to the other respondents. On July 5, 1988, only daughter, Alberta L. Reyes, to mortgage in her
petitioners filed a complaint for quieting of title, name and representation all her land situated in the
recovery of possession and ownership of the land. municipality of Pola, Mindoro. On 22 October 1920,
Reyes, personally and as attorney in fact of her mother,
ISSUE: Whether the sale between Trinidad and in consideration of the sum of P6,500 received from
Regalado is valid considering the capacity of the vendor Enrique Azcona, now deceased, sold to the latter, with
to execute the contract in view of the conditional deed of the right of repurchase within the period of 4 years, 5
donation parcels of land with certificates of title belonging to her
and Cordero. On 23 October 1920, Reyes, as attorney in
RULING: The donor may have an inchoate interest in
fact of Cordero, in consideration of the sum of P5,000
the donated property during the time that ownership of
received from Azcona, sold to the latter, with the right of
the land has not reverted to her. Such inchoate interest
repurchase within the period of 4 years, a parcel of land
may be the subject of contracts including a contract of
with certificate of title 58 of the registry of deeds of
sale. In this case, however, what the donor sold was the
Mindoro, belonging to Cordero. On 1 October 1925,
land itself which she no longer owns. It would have
Reyes and Cordero jointly executed a power of attorney
been different if the donor-seller sold her interests over
authorizing Gregorio Venturanza to sell and encumber
the property under the deed of donation which is subject
all their real and personal including their cattle.
 Law 203- Sales: Sale by one having a voidable title
By: Mithi Evasco Villarmea
Respondents failed to exercise right of redemption, they Cavite Development Bank v. Spouses Lim, 324 SCRA
then executed a deed whereby the deeds of sale with the 346
right of repurchase were cancelled and a mortgage was
FACTS: A certain Rodolfo Guansing applied for a loan
constituted therein.
of P90,000 with a bank and mortgaged as collateral a
ISSUE: Whether or not the deed of resale and mortgage small parcel of land situated in Quezon City with
dated November 29, 1926 is legal and valid. improvements thereon; he failed to pay the amortization
and the bank foreclosed the mortgage on the lot.
RULING: It is necessary that the vendor be the owner of the Subsequently, the bank was also the highest bidder in
thing sold, inasmuch as it is a principle of law that nobody can the Sheriff Sale. After a year, the bank consolidated title
dispose of that which does not belong to him. However, as or was issued a new title in its name. The bank offered
has been noted, the sales with pacto de retro were this property for sale to plaintiff spouses. Then one of
fictitious for the reason that the contracts entered into by the plaintiff spouses paid P30,000 deposit representing
Alberta L. Reyes and the deceased Enrique Azcona were 10% of the price. Thereafter, she discovered that the
really mortgage in their nature. Therefore, the resale was property was previously registered in the name of the
a mere formality resorted to for the purpose of obtaining loan applicant who tricked his father into effecting the
the lawful cancellation of the registration thereof in the transfer of the title of this property in his name. The
registry of deeds and the notation of the mortgage deed. father had previously sued this son and the court
ordered the cancellation of said title and accordingly
Coronel v. Ona 33 Phil. 456
reinstated the title of the father.
FACTS: That on November 5, 1912, Cenon Ona and the
RULING: The decision reaffirms the settled rule that
other defendants formed a conspiracy, with intent to
ownership of the property subject of the sale is not
gain for themselves, to the fraud and injury of the
necessary for the perfection of the contract. It is only
plaintiff administration, and drew up and signed an
when the subject-matter is to be delivered that the
alleged instrument of sale, whereby Cenon Ona sold to
vendor must have the title or must be the owner thereof.
the spouses Benigno Nadres and Victoria Villa the said
In this case, the loan applicant’s title to the lot in
land, which instrument they falsely dated as prior to the
question was previously cancelled which naturally
death of his wife Isidra Coronel and forged and imitated
rendered spurious the title of the bank which was
her signature. That on same date, same defendants,
derived from this cancelled mother title. The High Court
executed another instrument of sale of the same land,
still allowed the fiction that there was perfection of the
wherein they appear as vendors thereof Benigno Nadres
contract when the property offered for sale and accepted
and Victoria Villa and as vendees the spouses Crispin
by plaintiffs spouses through the wife.
Castillo and Maria Recto.
Thus, under Art 1434 of the Civil Code, when a person
ISSUE: Whether or not the instrument of purchase and
sells or alienates a thing which, at that time, was not his,
sale is valid.
but later acquires title thereto, such title passes by
RULING: There is no contract says Article 1261 unless operation of law to the buyer or grantee. This is the same
there exists the essential requisites of consent of the principle behind the sale of “future goods” under Art
contracting parties, a definite object which may be the 1462. However, Art 1459, at the time of delivery or
subject of a contract, and the consideration for the consummation stage of the sale, it is required that the
obligation may be established. From the plainly proven seller be the owner of the thing sold. Otherwise, he will
facts that the record discloses it is evident that Isidra not be able to comply with his obligation to transfer
Coronel was not present to give her consent to the ownership to the buyer. It is at the consummation stage
alleged contract of sale, because she was dead when said where the principle of nemo dat quod non habet applies.
contract was simulated, nor is any consideration for the
obligation stated therein, and consequently the contract
set forth in said instrument is flagrantly null and void. A
contract of sale afterwards entered into by the purchaser
in a void instrument executed in favour of a third person
to the fraud and prejudice of the rights of the heirs of the
deceased owner, although the said purchaser acted in
good faith, is null and void, inasmuch as the vendor was
not seized of the property and had no right to make the
sale; he was unable to transmit any right to the
purchaser by means of the former void contract.