PARTIES TO A CONTRACT OF SALE

SALES CASE

E.E.M.DELACRUZ

1. Eugenio Domingo vs. Court of Appeals

G.R. No. 127540 - October 17, 2001
2. Antonio Medina vs Collector of Internal
Revenue
G.R. No L-15113
January 28, 1961
Facts:
Antonio Medina and Antonia Rodriguez married in 1944
without any property. Antonio later acquired forest concessions in
Isabela. In 1949, Antonia engaged in lumber business. From 1949 to
1952, Antonio sold all his logs to Antonia. Antonia in turn sold the
products in Manila through an agent.
Upon assessment of their taxes, the Collector of Internal Revenue
considered the sale from Antonio to Antonia as null and void, thus, an
additional tax of about 4,553.54 was assessed.
The spouses protested the assessment claiming that they had a
prenuptial agreement pf complete separation of properties.
Issue:
Was the sale between Antonio and Antonia valid?
Held:
No. The validity of the prenuptial agreement was declared by
the court null because of material inconsistencies a) the prenuptial
agreement was said to be executed 3 months before the marriage; b)
the spouses did not have any property before the marriage which
would compel them into entering into the agreement c) they did not
act in accordance to the said agreement.
The sale from Antonio to Antonia was null because such is expressly
prohibited in Article 1490 of the Civil Code

FACTS:
Paulina Rigonan owned three parcels of land including the house and
warehouse on one parcel. She allegedly sold them to private respondents, the
spouses Felipe and Concepcion Rigonan, who claim to be her relatives
amounting to P850.00. The petitioners Eugenio Domingo, Crispin Mangabat and
Samuel Capalungan, who claim to be her closest surviving relatives, allegedly
took possession of the properties by means of stealth, force and intimidation,
and refused to vacate the same. The respondent filed a complaint for
reinvindicacion against petitioners. The petitioners stated that the sale was
spurious and they are the legitimate owner of the land being the nearest kin of
Paulina. The respondents shown a carbon copy of the deed of sale not bearing
the signature of Paulina only allege thumb mark of the latter and the deed was
tainted with alterations, defects and irregularities. The trial court found the deed
fake and rendered judgment in favor of the petitioners. The appellate court,
however, reversed the decision and declared the respondents the owner of the
properties. On appeal, the petitioners asserted that there was abundant
evidence at the time of the execution of the sale, the deceased was already
senile. She could have not consented to the sale by merely imprinting her
thumbmark on the deed.
ISSUE:
Whether or not the vendor has the capacity to act on the alleged sale of her
property.
RULING:
The Supreme Court reinstated the decision of the trial court. There is a
serious doubt that the seller consented to the sale of and the price for her
parcels of land. The time of the execution of the alleged contract, Paulina
Rigonan was already of advanced age and senile. She died an octogenarian
barely over a year when the deed was allegedly executed but before copies of
the deed were entered in the registry. 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
unrebutted testimony of Cosima Domingo shows that at the time of the alleged
execution of the deed, Paulina was already incapacitated physically and
mentally. She narrated that Paulina played with her waste and urinated in
bed

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E.E.M.DELACRUZ

consort and his descendants because of fear of undue and improper

pressure and influence upon the donor, then there is every reason to
apply the same prohibitive policy to persons living together as
husband and wife without the benefit of nuptials.
The lack of validity of the donation by the deceased to
appellee does not necessarily result in appellant having exclusive right
to the disputed property. As a widow, Cervantes is entitled to one-half
of the inheritance, and the surviving sister to the other half.
Article 1001, Civil Code: Should brothers and sisters or their
children survive with the widow or widower, the latter shall be entitled
to one-half of the inheritance and the brothers and sisters or their
children to the other half.

3. CORNELIA MATABUENA vs. PETRONILA

CERVANTES
L-2877 (38 SCRA 284)
March 31, 1971
FACTS:

Facts:

4. Calimlim-Canullas v. Fortun

Petitioner Mercedes Calimlim-Canullas and Fernando Canullas were

married in 1962, with 5 children, and were living on a house situated
on a land inherited by the latter. In 1978, Fernando abandoned his
family and lived with Corazon Daguines. In 1980, Fernando sold the
house and lot to Daguines, who initiated a complaint for quieting of
title. Mercedes resisted, claiming that the house and lot were conjugal
properties, and the sale was null nad void for she had not consented
thereto.
Issues:
(1) Whether or not the construction of a conjugal house on the
exclusive property of the husband ipso facto gave the land the
character of conjugal property
(2) Whether or not the sale of the lot together with the house and
improvements thereon was valid under the circumstances surrounding
the transaction
Held:
(1) Both the land and the building belong to the conjugal partnership
but the conjugal partnership is indebted to the husband for the value

In 1956, herein appellants brother Felix Matabuena donated

a piece of lot to his common-law spouse, herein appellee Petronila
Cervantes. Felix and Petronila got married only in 1962 or six years
after the deed of donation was executed. Five months later, or
September 13, 1962, Felix died. Thereafter, appellant Cornelia
Matabuena, by reason of being the only sister and nearest collateral
relative of the deceased, filed a claim over the property, by virtue of a
an affidavit of self-adjudication executed by her in 1962, had the land
declared in her name and paid the estate and inheritance taxes
thereon. The lower court of Sorsogon declared that the donation was
valid inasmuch as it was made at the time when Felix and Petronila
were not yet spouses, rendering Article 133 of the Civil Code
inapplicable.
ISSUE: Whether or not the ban on donation between spouses during
a marriage applies to a common-law relationship.
HELD:
While Article 133 of the Civil Code considers as void a
donation between the spouses during marriage, policy consideration of
the most exigent character as well as the dictates of morality requires
that the same prohibition should apply to a common-law relationship.
As stated in Buenaventura vs. Bautista (50 OG 3679, 1954),
if the policy of the law is to prohibit donations in favor of the other

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father-in-law in a land registration case involving the property in

dispute
Held:
The stipulated facts and exhibits of record indisputably established
plaintiff's lack of cause of action and justified the outright dismissal of
the complaint. Plaintiff's claim of ownership to the land in question was
predicated on the sale thereof made by his father-in- law in his favor,
at a time when Militante's application for registration thereof had
already been dismissed by the Iloilo land registration court and was
pending appeal in the Court of Appeals.
Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil
Code) prohibits in its six paragraphs certain persons, by reason of the
relation of trust or their peculiar control over the property, from
acquiring such property in their trust or control either directly or
indirectly and "even at a public or judicial auction," as follows: (1)
guardians; (2) agents; (3) administrators; (4) public officers and
employees; judicial officers and employees, prosecuting attorneys, and
lawyers; and (6) others especially disqualified by law.
Fundamental consideration of public policy render void and inexistent
such expressly prohibited purchase (e.g. by public officers and
employees of government property intrusted to them and by justices,
judges, fiscals and lawyers of property and rights in litigation and
submitted to or handled by them, under Article 1491, paragraphs (4)
and (5) of our Civil Code) has been adopted in a new article of our Civil
Code, viz, Article 1409 declaring such prohibited contracts as
"inexistent and void from the beginning."
Indeed, the nullity of such prohibited contracts is definite and
permanent and cannot be cured by ratification. The public interest and
public policy remain paramount and do not permit of compromise or
ratification. In his aspect, the permanent disqualification of public and
judicial officers and lawyers grounded on public policy differs from the
first three cases of guardians, agents and administrators (Article 1491,
Civil Code), as to whose transactions it had been opined that they may
be "ratified" by means of and in "the form of a new contact, in which
cases its validity shall be determined only by the circumstances at the
time the execution of such new contract. The causes of nullity which
have ceased to exist cannot impair the validity of the new contract.
Thus, the object which was illegal at the time of the first contract, may
have already become lawful at the time of the ratification or second
contract; or the service which was impossible may have become
possible; or the intention which could not be ascertained may have
been clarified by the parties. The ratification or second contract would

of the land. The spouse owning the lot becomes a creditor of the
conjugal partnership for the value of the lot, which value would be
reimbursed at the liquidation of the conjugal partnership. FERNANDO
could not have alienated the house and lot to DAGUINES since
MERCEDES had not given her consent to said sale.
(2) The contract of sale was null and void for being contrary to morals
and public policy. The sale was made by a husband in favor of a
concubine after he had abandoned his family and left the conjugal
home where his wife and children lived and from whence they derived
their support. That sale was subversive of the stability of the family, a
basic social institution which public policy cherishes and protects. The
law emphatically prohibits the spouses from selling property to each
other subject to certain exceptions. Similarly, donations between
spouses during marriage are prohibited. And this is so because if
transfers or con conveyances between spouses were allowed during
marriage, that would destroy the system of conjugal partnership, a
basic policy in civil law. It was also designed to prevent the exercise of
undue influence by one spouse over the other, as well as to protect
the institution of marriage, which is the cornerstone of family law. The
prohibitions apply to a couple living as husband and wife without
benefit of marriage, otherwise, "the condition of those who incurred
guilt would turn out to be better than those in legal union." Those
provisions are dictated by public interest and their criterion must be
imposed upon the wig of the parties.

Facts:

5. Rubias v. Batiller

Before the war with Japan, Francisco Militante filed an application for
registration of the parcel of land in question. After the war, the petition
was heard and denied. Pending appeal, Militante sold the land to
petitioner, his son-in-law. Plaintiff filed an action for forcible entry
against respondent. Defendant claims the complaint of the plaintiff
does not state a cause of action, the truth of the matter being that he
and his predecessors-in-interest have always been in actual, open and
continuous possession since time immemorial under claim of
ownership of the portions of the lot in question.
Issue:
Whether or not the contract of sale between appellant and his fatherin-law was void because it was made when plaintiff was counsel of his

PARTIES TO A CONTRACT OF SALE

E.E.M.DELACRUZ

MARIANO L. BERNARDO, PETITIONER, VS.

SOCORRO ROLDAN, FRANCISCO HERMOSO, FIDEL
C. RAMOS AND EMILIO CRUZ, RESPONDENTS.
[ G.R. No. L-8477, May 31, 1956 ]

SALES CASE

then be valid from its execution; however, it does not retroact to the
date of the first contract.

FACTS:
Mariano L Bernardo, a minor, inherited from his father, Marcelo
Bernardo 17 parcels of land located in Guiguinto, Bulacan. In view of his
minority, guardianship proceedings were instituted on July 27, 1947, where
Socorro Roland, surviving spouse of Marcelo and step-mother of Mariano, was
appointed as guardian of the latter. Also, Socorro filed a motion asking authority
to sell as guardian the 17 parcels for the sum of P14,700 to his brother-in-law,
Dr. Fidel C. Ramos, the purpose of the sale being allegedly to invest money in a
residential house, which the minor desired to have on Tindalo St., Manila. The
motion was granted.
On August 5, 1947 Socorro, as guardian, then executed the proper
deed of sale in favor of Fidel Ramos and on August 12, 1947, she asked for and
obtained judicial confirmation of the sale. However, on August 13, 1947, Fidel
Ramos executed in favor of Socorro personally, a deed of conveyance covering
the same 17 parcels for the sum of P15,000. And on October 21, 1947 Socorro
sold 4 out of the 17 parcels to Emilio Cruz for P3,000, reserving herself the right
to repurchase.
On August 10, 1948, petitioner Phil. Trust Co. replaced Socorro as
guardian. Petitioner filed a complaint to annul two contracts regarding the 17
parcels of land: a) the sale thereof by Socorro, as guardian, to Fidel Ramos;
and b) sale thereof by Fidel Ramos to Socorro personally. Petitioner contends
that the step-mother in effect, sold to herself, the properties of her ward thus
should be annulled as it violates Art. 1459 of the Civil Code prohibiting the
guardian from purchasing either in person or through the mediation of another
the property of her ward. As to the third conveyance, that Socorro had acquired
no valid title to convey to Cruz.
The trial court held that Art 1459 was not controlling as there was no
proof that Ramos was a mere intermediary or that the latter agreed with Socorro
to but the parcels of land for her benefit. The Court of Appeals affirmed the
judgment, adding that the minor new the particulars of, and approved the
transactions, and that only clear and positive evidence of fraud and bad faith,
and not mere insinuations and interferences will overcome the presumptions
that a sale was concluded in all good faith for value. Hence, this petition.

6. THE PHILIPPINE TRUST COMPANY, AS GUARDIAN

OF THE PROPERTY OF THE MINOR,

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SALES CASE

ISSUE: Whether the two contracts of sale made by Socorro was valid.
3. Other relatively disqualified
b. Attorneys

7. PAULINO VALENCIA vs. ATTY. ARSENIO FER

CABANTING
FACTS:
In 1933, complainant Paulino Valencia and his wife allegedly bought a parcel
of land, where they built their house, from a certain Serapia Raymundo, an heir of Pedro
Raymundo the original owner. However, they failed to register the sale or secure a
transfer certificate of title in their names. A conference was held in the house of Atty.
Eduardo Jovellanos to settle the land dispute between Serapia and the Valencia spouses.
Serapia was willing to relinquish ownership if the Valencias could show documents
evidencing ownership. Paulino exhibited a deed of sale written in the Ilocano dialect.
However, Serapia claimed that the deed covered a different property. Serapia, assisted
by Atty. Arsenio Fer. Cabanting, filed a complaint against Paulino for the recovery of
possession with damages. The Valencias engaged the services of Atty. Dionisio Antiniw.
Atty. Antiniw advised them to present a notarized deed of sale in lieu of the private
document written in Ilocano. For this purpose, Paulino gave Atty. Antiniw an amount of
P200.00 to pay the person who would falsify the signature of the alleged vendor. A
"Compraventa Definitiva" as a result thereof.
The Court of First Instance of Pangasinan, rendered a decision in favor of Serapia.
Paulino filed a Petition for Certiorari with Preliminary Injunction before the CA. While
the petition was pending, the TC issued an order of execution stating that "the decision in
this case has already become final and executory".
On March 20, 1973, Serapia sold 40 square meters of the litigated lot to Atty. Jovellanos
and the remaining portion she sold to her counsel, Atty. Arsenio Fer. Cabanting, on April
25, 1973. Paulino filed a disbarment proceeding against Atty. Cabanting on the ground
that said counsel allegedly violated Article 1491 of the New Civil Code as well as Article
II of the Canons of Professional Ethics, prohibiting the purchase of property under
litigation by a counsel. The appellate court dismissed the petition of Paulino.
Constancia Valencia, daughter of Paulino, also filed a disbarment proceeding against
Atty. Dionisio Antiniw for his participation in the forgery and its subsequent introduction
as evidence for his client; and also, against Attys. Eduardo Jovellanos and Arsenio
Cabanting for purchasing a litigated property allegedly in violation of Article 1491 of the
New Civil Code; and against the three lawyers, for allegedly rigging the case against her
parents.
ISSUES:
(issue 1 lang ang connected pero iapil nlng nako ang uban basig pangutaon)
I. Whether or not Atty. Cabanting purchased the subject property in violation of Art.
1491 of the New Civil Code.

HELD:
No. The court held that even without proof that Socorro had connived
with Fidel Ramos. Remembering the general doctrine that guardianship is a
trust of the highest order, and the trustee cannot be allowed to have any
inducement to neglect his ward's interest and in line with the court's suspicion
whenever the guardian acquires the ward's property we have no hesitation to
declare that in this case, in the eyes of the law, Socorro Roldan took by
purchase her ward's parcels thru Dr. Ramos, and that Article 1459 of the Civil
Code applies.
The temptation which naturally besets a guardian so circumstanced,
necessitates the annulment of the transaction, even if no actual collusion is
proved (so hard to prove) between such guardian and the intermediate
purchaser. This would uphold a sound principle of equity and justice.
From both the legal and equitable standpoints these three sales
should not be sustained: the first two for violation of article 1459 of the Civil
Code; and the third because Socorro Roldan
could pass no title to Emilio Cruz. The annulment carries with it (Article 1303
Civil Code) the obligation of Socorro Roldan to return the 17 parcels together
with their fruits and the duty of the minor, through his guardian to repay P14,700
with legal interest.

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There is no evidence on record that the three lawyers involved in these administrative
cases conspired in executing the falsified "Compraventa Definitiva" and rigged the case
against spouses Valencia.
Besides, the camaraderie among lawyers is not proof of conspiracy, but a sign of
brotherhood among them.
WHEREFORE, judgment is hereby rendered declaring: 1. Dionisio Antiniw
DISBARRED from the practice of law, and his name is ordered stricken off from the roll
of attorneys; 2. Arsenio Fer. Cabanting SUSPENDED; and 3. Admin case against
Attorney Eduardo Jovellanos DISMISSED

8. Pichel v. Alonzo
Facts:
Respondent Prudencio Alonzo was awarded by the Government that parcel of
land in Basilan City in accordance with Republic Act No. 477. The award was cancelled
by the Board of Liquidators on January 27, 1965 on the ground that, previous thereto,
plaintiff was proved to have alienated the land to another, in violation of law. In 1972,
plaintiff's rights to the land were reinstated.
On August 14, 1968, plaintiff and his wife sold to defendant Luis Pichel all the
fruits of the coconut trees which may be harvested in the land in question for the period,
September 15, 1968 to January 1, 1976, in consideration of P4,200.00. Even as of the
date of sale, however, the land was still under lease to one, Ramon Sua, and it was the
agreement that part of the consideration of the sale, in the sum of P3,650.00, was to be
paid by defendant directly to Ramon Sua so as to release the land from the clutches of
the latter. Pending said payment plaintiff refused to allow the defendant to make any
harvest. In July 1972, defendant for the first time since the execution of the deed of sale
in his favor, caused the harvest of the fruit of the coconut trees in the land.
Alonzo filed for the annulment of the contract on the ground that it violated the
provisions of R.A. 477, which states that lands awarded under the said law shall not be
subject to encumbrance or alienation, otherwise the awardee shall no longer be entitled
to apply for another piece of land. The lower court ruled that the contract, which it held
as a contract of lease, is null and void.
Issues:
(1) Whether the respondent had the right or authority to execute the "Deed of Sale" in
1968, his award having been cancelled previously by the Board of Liquidators on
January 27, 1965
(2) Whether the contract is one for lease of the land, or for sale of coconut fruits
(3) Whether the contract is an encumbrance as contemplated by R.A. 477
Held:

SALES CASE

II.

Whether or not Attys. Antiniw and Jovellanos are guilty of malpractice in falsifying
notarial documents.
III. Whether or not the three lawyers connived in rigging the case against spouses
Valencia.
HELD:
Under Article 1491 of the New Civil Code: The following persons cannot acquire by
purchase, even at a public of judicial auction, either in person or through the mediation
of another: (5) . . . this prohibition includes the act of acquiring by assignment and shall
apply to lawyers, with respect to the property and rights which may be the object of any
litigation in which they make take part by virtue of their profession. 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. Greed may get the better of the
sentiments of loyalty and disinterestedness. Any violation of this prohibition would
constitute malpractice and is a ground for suspension. Art. 1491, prohibiting the sale to
the counsel concerned, applies only while the litigation is pending.
In the case at bar, while it is true that Atty. Arsenio Fer. Cabanting purchased the lot
after finality of judgment, there was still a pending certiorari proceeding. A thing is said
to be in litigation not only if there is some contest or litigation over it in court, but also
from the moment that it becomes subject to the judicial action of the judge. Logic
indicates, in certiorari proceedings, that the appellate court may either grant or dismiss
the petition. Hence, it is not safe to conclude, for purposes under Article 1491 that the
litigation has terminated when the judgment of the trial court become final while
a certiorari connected therewith is still in progress. Thus, purchase of the property by
Atty. Cabanting in this case constitutes malpractice in violation of Art. 1491 and the
Canons of Professional Ethics. Clearly, this malpractice is a ground for suspension. The
sale in favor of Atty. Jovellanos does not constitute malpractice. There was no attorneyclient relationship between Serapia and Atty. Jovellanos, considering that the latter did
not take part as her counsel. The transaction is not covered by Art. 1491 nor by the
Canons adverted to.
II
It is asserted by Paulino that Atty. Antiniw asked for and received the sum of P200.00 in
consideration of his executing the document "Compraventa Definitiva". This charge,
Atty. Antiniw simply denied. It is settled jurisprudence that affirmative testimony is
given greater weight than negative testimony. When an individual's integrity is
challenged by evidence, it is not enough that he deny the charges against him; he must
meet the issue and overcome the evidence for the relator and show proofs that he still
maintains the highest degree of morality and integrity which at all time is expected of
him. There is a clear preponderant evidence that Atty. Antiniw committed falsification of
a deed of sale, and its subsequent introduction in court prejudices his prime duty in the
administration of justice as an officer of the court.
III

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E.E.M.DELACRUZ

possession and enjoyment of the land itself because these rights are distinct and separate
from each other, the first pertaining to the accessory or improvements (coconut trees)
while the second, to the principal (the land). A transfer of the accessory or improvement
is not a transfer of the principal. It is the other way around, the accessory follows the
principal. Hence, the sale of the nuts cannot be interpreted nor construed to be a lease of
the trees, much less extended further to include the lease of the land itself.
The grantee of a parcel of land under R.A. No. 477 is not prohibited from
alienating or disposing of the natural and/or industrial fruits of the land awarded to him.
What the law expressly disallows is the encumbrance or alienation of the land itself or
any of the permanent improvements thereon. Permanent improvements on a parcel of
land are things incorporated or attached to the property in a fixed manner, naturally or
artificially. They include whatever is built, planted or sown on the land which is
characterized by fixity, immutability or immovability. Houses, buildings, machinery,
animal houses, trees and plants would fall under the category of permanent
improvements, the alienation or encumbrance of which is prohibited. The purpose of the
law is not violated when a grantee sells the produce or fruits of his land. On the contrary,
the aim of the law is thereby achieved, for the grantee is encouraged and induced to be
more industrious and productive, thus making it possible for him and his family to be
economically self-sufficient and to lead a respectable life. At the same time, the
Government is assured of payment on the annual installments on the land. We agree with
herein petitioner that it could not have been the intention of the legislature to prohibit the
grantee from selling the natural and industrial fruits of his land, for otherwise, it would
lead to an absurd situation wherein the grantee would not be able to receive and enjoy
the fruits of the property in the real and complete sense.

SALES CASE

(1) Until and unless an appropriate proceeding for reversion is instituted by the State, and
its reacquisition of the ownership and possession of the land decreed by a competent
court, the grantee cannot be said to have been divested of whatever right that he may
have over the same property. Herein respondent is not deemed to have lost any of his
rights as grantee during the period material to the case at bar, i.e., from the cancellation
of the award in 1965 to its reinstatement in 1972. Within said period, respondent could
exercise all the rights pertaining to a grantee.
(2) A perusal of the deed fails to disclose any ambiguity or obscurity in its provisions,
nor is there doubt as to the real intention of the contracting parties. The terms of the
agreement are clear and unequivocal, hence the literal and plain meaning thereof should
be observed. The document in question expresses a valid contract of sale. It has the
essential elements of a contract of sale. The subject matter of the contract of sale in
question are the fruits of the coconut trees on the land during the years from September
15, 1968 up to January 1, 1976, which subject matter is a determinate thing. Under
Article 1461 of the New Civil Code, things having a potential existence may be the
object of the contract of sale. Pending crops which have potential existence may be the
subject matter of sale. The essential difference between a contract of sale and a lease of
things is that the delivery of the thing sold transfers ownership, while in lease no such
transfer of ownership results as the rights of the lessee are limited to the use and
enjoyment of the thing leased.
The contract was clearly a "sale of the coconut fruits." The vendor sold,
transferred and conveyed "by way of absolute sale, all the coconut fruits of his land,"
thereby divesting himself of all ownership or dominion over the fruits during the sevenyear period. The possession and enjoyment of the coconut trees cannot be said to be the