Since sale is a consensual contract, the party who alleges it must show its existence by competent proof, as well as of the essential elements thereof.
De Leon vs Salvador – 36 SCRA 567
Judicial Sale – But even if the foregoing requisites are shown, a judicial sale will not be set aside by the court when there is a right of redemption, since the more inadequate the winning bid at public sale, the more easily it is for the owner to redeem the property.
Private respondents further insist that the sales were fraudulent because of the inadequacy of the given price. Inadequacy of consideration does not vitiate a contract unless it is proven which in the case at bar was not, that there was fraud, mistake or undue influence. (Article 1355, New Civil Code). We do not find the stipulated price as so inadequate to shock the court’s conscience, considering that the price paid was much higher than the assessed value of the subject properties and considering that the sales were effected by a father to her daughter in which case filial love must be taken into account.
Tongoy vs CA – 123 SCRA 99
When the mortgages were constituted, respondents Cresenciano Tongoy and Norberto Tongoy were still minors, while respondent Amado Tongoy became of age on August 19, 1931, and Ricardo Tongoy attained majority age on August 12, 1935. Still, considering that such transfer of the properties in the name of Luis D. Tongoy was made in pursuance of the master plan to save them from foreclosure, the said respondents were precluded from doing anything to assert their rights. It was only upon failure of the herein petitioner, as administrator and/or successor-in-interest of Luis D. Tongoy, to return the properties that the prescriptive period should begin to run.
Labagala vs Santiago – 371 SCRA 360
MINORS, INSANE OR DEMENTED PERSONS, AND DEAF-MUTES – Generally, minors, insane and demented persons, and deafmutes who do not know how to write, have no legal capacity to contract, and therefore are disqualifi ed from being parties to a sale. Nonetheless, contracts entered into by such legally incapacitated persons are not void, but merely voidable, subject to annulment or ratifi cation. The action for annulment cannot be instituted by the person who is capacitated since he is disqualifi ed from alleging the incapacity of the person with whom he contracts.
Contracts entered into during lucid intervals by insane or demented persons are generally valid; whereas, those entered into in a state of drunkenness, or during a hypnotic spell, are merely voidable.
When the defect of the contract consists in the incapacity of one of the parties, the incapacitated person is not obliged to make any restitution, except insofar as he has been benefited by the thing or price received by him.
Salonga vs Farrales – 105 SCRA 359
A lessee of a lot who constructs in good faith thereon a house may remove said house, but cannot compel the lessor to sell to him the lot, unless there be an agreement to this effect.
Sps Buenaventura vs CA – 416 SCRA 263
A sale over a subject matter is not a real contract, but a consensual contract, which becomes a valid and binding contract upon the meeting of the minds as to the price. Once there is a 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 the real price is not stated in the contract, then the sale is valid but subject to reformation; if there is no meeting of the minds as to the price, because the price stipulated is simulated, then the contract is void.
When definite agreement on manner of payment essential? – As a consensual contract, a contract of sale becomes a binding and valid contract upon the meeting of the minds of the parties as to the price, despite the manner of payment, or even the breach of that manner of payment. It is not the act of payment of price that determines the validity of a contract of sale.
Montecillo vs Reynes – 385 SCRA 244
When definite agreement on manner of payment essential? Although the law does not expressly state that the minds of the parties must also meet on the terms or manner of payment of Art. 1197. If the obligation does not fix a period, but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof. The courts shall also fix the duration of the period when it depends upon the will of the debtor. In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.
Lagrimas Boy vs CA – 427 SCRA 196
The finding of the MeTC, sustained by the Court of Appeals, is that the continued occupation by petitioner of said property after the sale, without payment of rent, was by mere tolerance. Private respondents claimed that petitioner requested for time to vacate the premises and they agreed thereto because they did not need the property at that time. However, when private respondents were asked to vacate their rented residence, they demanded that petitioner vacate the subject property, but petitioner refused to do so. A person who occupies the land of another at the latter’s tolerance or permission, without any contract between them, is bound by an implied promise that he will vacate the same upon demand, failing which a summary action for ejectment is the proper remedy against him.
Ownership of thing transferred by delivery – This is true even if the purchase has been made on credit. Payment of the purchase price is not essential to the transfer of ownership, as long as the property sold has been delivered.
Union Motor Corp vs CA – 361 SCRA 506
In all forms of delivery, it is necessary that the act of delivery, whether actual or constructive, should be coupled with the intention of delivering the thing sold. The act without the intention is insufficient; there is no tradition.
Adelfa Properties Inc vs CA – GR 111238
Exceptions to the rule – (1) Contrary stipulation. — The ownership of things is transferred by delivery, and not by mere payment. However, the parties may stipulate that despite the delivery, the ownership of the thing shall remain with the seller until the purchaser has fully paid the price. (see Art. 1503.)
In other words, non-payment of the price, after the thing has been delivered, prevents the transfer of ownership only if such is the stipulation of the parties. This stipulation is usually known as pactum reservati dominii or contractual reservation of title, and is common in sales on the installment plan.
A contract which contains this kind of stipulation is considered a contract to sell. The agreement may be implied.
Litonjua vs L&R Corp – 328 SCRA 796
Nature of option contract.
(1) An option is a contract. It is a preparatory contract, separate and distinct from the main contract itself (subject matter of the option) which the parties may enter into upon the consummation of the option.
(2) It gives the party granted the option the right to decide, whether or not to enter into a principal contract, while it binds the party who has given the option, not to enter into the principal
Ang Yu Asuncion vs CA – 238 SCRA 602
There was nothing to execute because a contract over the right of first refusal belongs to a class of preparatory juridical relations governed not by the law on contracts but by the codal provisions on human relations. This may apply here if the contract is limited to the buying and selling of the real property. However, the obligation of R to first offer the property to E is embodied in a contract. It is Paragraph 8 on the right of first refusal which created the obligation. It should be enforced according to the law on contracts instead of the panoramic and indefinite rule on human relations. The latter remedy encourages multiplicity of suits. There is something to execute and that is for R to comply with its obligation to the property under the right of the first refusal according to the terms at which they should have been offered then to E, at the price when that offer should have been made. Also, E has to accept the offer. This juridical relation is not amorphous nor it is merely preparatory. Subsequently in 1994, in the case of Ang Yu Asuncion vs. Court of Appeals (238 SCRA 602 .), the Court en banc departed from the doctrine laid down in Guzman, Bocaling & Co. vs. Bonnevie and refused to rescind a contract of sale which violated the right of first refusal. The Court held that the so-called“right of first refusal” cannot be deemed a perfected contractof sale under Article 1458 of the new Civil Code and, as such, a breach thereof decreed under a final judgment does not entitle the aggrieved party to a writ of execution of the judgment but to an action for damages in a proper forum for the purpose.
Spouses Reyes vs Salvador
A contract to sell may thus be defined as a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price.
A contract to sell as defined hereinabove, may not even be considered as a conditional contract of sale where the seller may likewise reserve title to the property subject of the sale until the fulfillment of a suspensive condition, because in a conditional contract of sale, the first element of consent is present, although it is conditioned upon the happening of a contingent event which may or may not occur. If the suspensive condition is not fulfilled, the perfection of the contract of sale is completely abated (cf. Homesite and Housing Corp. vs. Court of Appeals, 133 SCRA 777 ). However, if the suspensive condition is fulfilled, the contract of sale is thereby perfected, such that if there had already been previous delivery of the property subject of the sale to the buyer, ownership thereto automatically transfers to the buyer by operation of law without any further act having to be performed by the seller.
In a contract to sell, upon the fulfillment of the suspensive condition which is the full payment of the purchase price, ownership will not automatically transfer to the buyer although the property may have been previously delivered to him. The prospective seller still has to convey title to the prospective buyer by entering into a contract of absolute sale.
Even in the absence of an express stipulation to such effect, the intention of the parties to execute a contract to sell may be implied from the provisions of the contract. While Article 1478 of the Civil Code recognizes the right of the parties to agree that the ownership of the thing shall not pass to the purchaser until he has fully paid the price therefore, the same statutory provision does not require that such be expressly stipulated in the contract.