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

The court noted the gross disproportion between the

consideration stipulated and the value of the property,
would show that the price stated was false and fictitious
and no other true and lawful cause having been shown.
Navarro vs Sugar Producers 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; there was no
complete meeting of the minds
Velasco vs CA

right to buy the property at a fixed price within a certain

time, or under, or in compliance with, certain terms and
conditions, or which gives to the owner of the property the
right to sell or demand a sale. The option is not of itself a
purchase, but merely secures the privilege to buy; it is not
a sale of property, but a sale of the right to purchase.
Equatorial Realty Dev, Inc vs Mayfair Theather , 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.

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, the court held that
although a downpayment had already been made by the
buyer and received by the seller, there was still no valid
sale.

Kilosbayan, 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.

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, which essentially constitutes obligations to do and not
subject to an action for specific performance.
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, and indicating the balance of the purchase price,
with specific obligation to transfer the title upon full
payment of the balance. the court said that this is a valid
sale.
Cheng vs Genato
The receipt signed by the seller acknowledging receipt of
the sum of P50,000 as partial payment for the real
property described by titles in the receipt, did not provide
further stipulations as to the full contract price of the
manner of payment thereof. The court ruled that there was
no valid sale.
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, even if
shocking to the conscience.
Formation of Sale
Adelfa properties, 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, the price and the manner of payment
thereof.

Without a consideration separate from the purchase price,

an option contract would be void, as a contract, but would
still constitute a valid offer, so that if the option is
exercised prior to its withdrawal, that is equivalent to an
offer being accepted prior to withdrawal and would
constitute to a valid and binding sale (Recently, it seems
that, without expressly overturning nor modifying the
Sanchez doctrine, 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.
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,
provided that the same is available and actually delivered
to the debtor upon execution and delivery by him of the
corresponding deed of sale. The option need not be
coupled with actual payment.
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, and it is only then that the principle of substantial
compliance would have relevance.
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. 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 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

sale entered into in violation of a right of first refusal of

another person, while valid, is rescissible.
Macion vs Guiani
On a contract to sell, 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, while OM is the
money given as a distinc consideration for an
option contract;
B) EM is given only where there is already a sale not
yet perfected; and
C) When EM is given, the buyer is bound to pay the
balance, while when the would-be buyer gives
option money, he is not required to buy, but may
even forfeit it depending on the terms of the
option
Earnest money is given only where there is a contract of
sale. Calling a certain fund earnest money cannot by itself
create a contract of sale. The essential requisites of sale
must be present.