Assessment: Price

A. Price must be real

[G. R. No. L-21489 and L-21628. May 19, 1966.]

MIGUEL MAPALO, ET AL., Petitioners, v. MAXIMO MAPALO, ET AL., Respondents.

FACTS:
The spouses Miguel Mapalo and Candida Quiba, simple illiterate farmers, were registered owners,
with Torrens title certificate O.C.T. No. 46503, of a 1,635-square-meter residential land. Spouses-
owners, out of love and affection for Maximo Mapalo (brother of Miguel who was about to get
married) decided to donate the eastern half of the land to him and said title of the land was delivered.

As a result, however, they were deceived into signing, a deed of absolute sale over the entire land in
his favor. Their signatures thereto were procured by fraud, that is, they were made to believe by
Maximo Mapalo and by the attorney who acted as notary public who “translated” the document, that
the same was a deed of donation in Maximo’s favor covering one-half (the eastern half) of their land.
Although the document of sale stated a consideration of Five Hundred (P500.00) Pesos, the aforesaid
spouses did not receive anything of value for the land.

Not known to them, Maximo Mapalo, registered the deed of sale in his favor and obtained in his
name Transfer Certificate of Title over the entire land. Thirteen years later, he sold for P2,500.00 said
entire land in favor of Evaristo, Petronila Pacifico and Miguel all surnamed Narciso. The sale to the
Narcisos was in turn registered and Transfer Certificate of Title was issued for the whole land in their
names. The Narcisos filed suit to be declared owners of the entire land, for possession of its western
portion; for damages; and for rentals. The Mapalo spouses filed their answer with a counterclaim,
seeking cancellation of the Transfer Certificate of Title of the Narcisos as to the western half of the
land, on the grounds that their (Mapalo spouses) signatures to the deed of sale was procured by fraud
and that the Narcisos were buyers in bad faith. They asked for reconveyance to them of the western
portion of the land and issuance of a Transfer Certificate of Title in their names as to said portion.

ISSUE:
1. WON a deed which states a consideration that in fact did not exist, is a contract without
consideration, and therefore void ab initio.
2. WON a contract with a false consideration, and therefore, at least under the Old Civil Code,
voidable.

HELD:
The contract involves a no consideration.
The rule under the Civil Code, contracts without a cause or consideration produce no effect
whatsoever. The statement of a false consideration renders the contract voidable, unless it is proven
that it is supported by another real and licit consideration. Furthermore, the action for annulment of a
contract on the ground of falsity of consideration shall last four years, the term to run from the date
of the consummation of the contract.
In the present case, the contract of sale has no consideration and therefore it is void and inexistent.
The deed of sale stated the amount of P500 as its consideration, however, said consideration was
totally absent. Purchase price which appears thereon as paid has in fact never been paid by the
purchaser to vendor. Such statemet will not suffice to bring it under the rule of Article 1276 of the Old
Civil Code as stating a false consideration.
Therefore, We ruled that a contract of purchase and sale is null and void and produces no effect
whatsoever where the same is without cause or consideration in that the purchase price which
appears thereon as paid has in fact never been paid by the purchaser to the vendor. Needless to add,
the inexistence of a contract is permanent and incurable and cannot be the subject of prescription.

B. Must be in Money or its Equivalent

 [G.R. No. L-67888 October 8, 1985]

IMELDA ONG, ET AL., petitioners,

vs.
ALFREDO ONG, ET AL., respondents.

Facts:
Imelda Ong, for and in consideration of One (P1.00) Peso and other valuable considerations, executed
in favor of private respondent Sandra Maruzzo, then a minor, a Quitclaim Deed whereby she
transferred, released, assigned and forever quit-claimed to Sandra Maruzzo, her heirs and assigns, all
her rights, title, interest and participation in the ONE-HALF (½) undivided portion of the parcel of land.

She subsequently revoked the aforesaid Deed of Quitclaim and, thereafter, on January 20, 1982
donated the whole property described above to her son, Rex Ong-Jimenez.

Sandra Maruzzo, filed with the Regional Trial Court of Makati, Metro Manila an action against
petitioners, for the recovery of ownership/possession and nullification of the Deed of Donation over
the portion belonging to her and for Accounting.

Ong claimed that the Quitclaim Deed is null and void inasmuch as it is equivalent to a Deed of
Donation, acceptance of which by the donee is necessary to give it validity. Further, it is averred that
the donee, Sandra Maruzzo, being a minor, had no legal personality and therefore incapable of
accepting the donation.

The trial court as well as the Respondent Intermediate Appellate Court, affirming the appealed
judgment in favor of Maruzzo. It held that the Quitclaim Deed is a conveyance of property with a valid
cause or consideration; that the consideration is the One (P1.00) Peso which is clearly stated in the
deed itself; that the apparent inadequacy is of no moment since it is the usual practice in deeds of
conveyance to place a nominal amount although there is a more valuable consideration given.

ISSUE:
WON a Quitclaim Deed is equivalent to a Deed of Sale

HELD:
YES. The Supreme court upheld the decision of the IAC.
The execution of a deed purporting to convey ownership of a realty is in itself prima facie evidence of
the existence of a valuable consideration, the party alleging lack of consideration has the burden of
proving such allegation.
Even granting that the Quitclaim deed in question is a donation, Article 741 of the Civil Code provides
that the requirement of the acceptance of the donation in favor of minor by parents of legal
representatives applies only to onerous and conditional donations where the donation may have to
assume certain charges or burdens (Article 726, Civil Code).
The donation to an incapacitated donee does not need the acceptance by the lawful representative if
said donation does not contain any condition. In simple and pure donation, the formal acceptance is
not important for the donor requires no right to be protected and the donee neither undertakes to do
anything nor assumes any obligation.

The Quitclaim now in question does not impose any condition. Bad faith and inadequacy of the
monetary consideration do not render a conveyance inexistent, for the assignor’s liberality may be
sufficient cause for a valid contract (Article 1350, Civil Code), whereas fraud or bad faith may render
either rescissible or voidable, although valid until annulled, a contract concerning an object certain
entered into with a cause and with the consent of the contracting parties, as in the case at bar.”
C. Must be Certain or Ascertainable at Perfection

[G.R. NO. 159373 : November 16, 2006]

JOSE R. MORENO, JR., Petitioner, v. Private Management Office (formerly, ASSET PRIVATIZATION
TRUST), Respondent.

FACTS:
Plaintiff Jose R. Moreno is the owner of the Ground Floor, the 7th Floor and the Penthouse of the J.
Moreno Building and the lot on which it stands. Defendant Private Management Office is the owner of
the 2nd, 3rd, 4th, 5th and 6th floors of the building.

On February 13, 1993, the defendant called for a conference for the purpose of discussing plaintiffs
right of first refusal over the floors of the building owned by defendant. At said meeting, defendant
informed plaintiff that the proposed purchase price for said floors was P21,000,000.00.

On February 22, 1993, defendant, in a letter signed by its Trustee, informed plaintiff that the Board of
Trustees (BOT) of PMO is in agreement that Mr. Jose Moreno, Jr. has the right of first refusal and
requested plaintiff to deposit 10% of the suggested indicative price of P21.0 million on or before
February 26, 1993.

Then on March 12, 1993, defendant wrote plaintiff that its Legal Department has questioned the basis
for the computation of the indicative price for the said floors.

On April 2, 1993, defendant wrote plaintiff that the BOT has tentatively agreed on a settlement price
of P42,274,702.17 for the said floors.

ISSUE:
WON there was a perfected contract of sale over the subject floors at the price of P21M.

HELD:
No. There is no perfection of the contract of sale over the subject floors at the price of P21M.

A contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the
object of the contract and upon the price. Consent is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the contract. The offer must be
certain and the acceptance absolute.

To reach that moment of perfection, the parties must agree on the same thing in the same sense, so
that their minds meet as to all the terms. They must have a distinct intention common to both and
without doubt or difference; until all understand alike, there can be no assent, and therefore no
contract.

So long as there is any uncertainty or indefiniteness, or future negotiations or considerations to be

had between the parties, there is not a completed contract, and in fact, there is no contract at all.

In the case at bar, the letter of February 22, 1993 and the surrounding circumstances clearly show
that the parties are not past the stage of negotiation, hence there could not have been a perfected
contract of sale. The letter clearly states that P21,000,000.00 is merely a suggested indicative price of
the subject floors as it was yet to be approved by the Board of Trustees.