TOPIC: PERFECTION OF THE CONTRACT OF SALE

1. PEOPLE HOMESITE VS COURT OF APPEALS

DEC. 26, 1984
Facts:
On Feb. 1960, People Homesite and Housing Corporation (PHHC)
passed Resolution No. 513 which grants Lot 4 of its Consolidated Subdivision Plan
(CSP) to Mendoza spouses with a condition that it is subject to the approval of the
Quezon City Council and PHHC Valuation Committee. The Quezon City Council
initially disapproved the CSP on 1961 and such disapproval was communicated to
Mendoza spouses through registered mail. On 1964 however, the City Council
approved a revised plan reducing the area of lot 4. The Mendoza spouses failed to
pay for the 20% initial deposit or down payment for the lot so it was recalled by the
PHHC and was granted to Sto. Domingo, et al. The awardees made the initial
deposit hence, the corresponding deeds of sale were executed in their favor.
Mendoza spouses filed a complaint in the court for specific performance and
damages and prayed for the cancellation of the deeds of sale.
Issue:
Whether or not there was a perfected contract of sale of Lot 4 with the reduced area
to Mendoza spouses which they can enforce against the PHHC by an action for
specific performance.
Held:
There was no perfected contract of sale with regard to Mendoza spouses. The award
of Lot 4 to them was conditional and was initially disapproved by the City Council.
The Mendozas were sufficiently informed of such disapproval. However on 1964,
when the lot area was reduced and approved by the City Council, the Mendozas
should have manifested in writing their acceptance of the award just to show that
they were still interested in the purchase. They did not do so. Art. 1475, NCC states
that The 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. From that
moment, the parties may reciprocally demand performance, subject to the law
governing the form of contracts. Art. 1181, NCC further states that In conditional
obligations, the acquisition of the rights, as well as the extinguishment or loss of
those already acquired, shall depend upon the happening of the event which
constitutes the condition. In the case at bar, there having been no concurrence as
to the offer and acceptance between PHHC and the Mendoza spouses, the contract
of sale never perfected, hence, the re-awarding and subsequent sale of the lot to
Sto. Domingo, et. al is valid.

2. ARTATES AND POJAS VS URBI ET AL.

January 30, 1971
Facts:
On September 1952, a homestead was granted and registered under the
names of spouses Artates and Pojas. On Oct. 1955 however, the court
ordered the execution sale of the said homestead in favor of Daniel Urbi in
order to satisfy the indebtedness of Artates for the physical injuries that he
inflicted upon Urbi. Urbi subsequently sold the homestead to a Crisanto
Soliven, a minor, hence, the spouses Artates and Pojas sought annulment of
the execution of the homestead and its subsequent sale on the ground that it
violated the Public Land Law exempting said property from execution for any
debt contracted within 5 years from the issuance of the patent and that the
contract of sale between Urbi and Soliven is null and void.
Issue:
Whether or not there is a perfected contract of sale between Urbi and
Soliven.
Held:
No, there was no perfected contract of sale for the reason that the sale is null
and void being in violation of Sec. 118 of the Public Land Law. Under said
provision, for a period of 5 years from the date of the government grant,
lands acquired by free or homestead patent shall not only be incapable of
being encumbered or alienated except in favor of the government itself or
any of its institutions, but also, they shall not be liable to the satisfaction of
any debt contracted within the said period. This provision is mandatory and
intended to preserve and keep for the homesteader or his family, the land
given to him gratuitously by the State, so that being a property owner, he
may become and remain a contented and useful member of our society. In
the case at bar, the land in question was issued on Sept. 1952 to Artates
spouses and was sold at public auction on March 1956 which in doubt, is
within the 5 year prohibition period. Furthermore, the sale is simulated and is
only intended to place the property beyond the reach of the judgment debtor.
The execution sale being null and void, the possession of the land should be
returned to the owners without prejudice to their continuing obligation to pay
the judgment debt and expenses connected therewith.
3. CAVITE DEVELOPMENT BANK VS. CYRUS LIM
FEBRUARY 1, 2000
Facts:
On June 1983, Rodolfo Guansing obtained a loan from Cavite Development
Bank (CDB) in the amount of 90,000.00 which is secured by a mortgage of his

parcel of land located in Quezon City. Guansing failed to pay the loan and as
a consequence thereof, the mortgage was foreclosed. The TCT was issued in
the name of CDB. On June 1988, Lolita Lim purchased the property and paid
30,000.00 as Option Money thereof. Subsequently, Lim discovered the
irregularity on the lands title. It was named not under the mortgagor, Rodolfo
Guansing but under his father, Perfecto Guansing. Hence, Lim filed for an
action for specific performance and damages against CDB.
Issue:
Whether or not there is a perfected contract of sale between CDB and Lolita
Lim in order to warrant the action for specific performance and damages
against the petitioners.
Held:
Yes, there was a perfected contract of sale. Art. 1475, NCC provides that 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. The
30,000.00 payment of Lolita Lim, though given as an Option money, is
nevertheless intended as an earnest money or part of the purchase price as
evidenced with their agreement. Therefore, what existed is a contract of sale
and not a mere option contract. An option contract is separate from and
preparatory to a contract of sale, which, if perfected , does not result in the
perfection or consummation of the sale. Only when the option is exercised
may a sale be perfected. The act of CDB in accepting the offer of Lim
concludes the perfection of the contract.
4. CONCHITA NOOL VS. COURT OF APPEALS
July 24, 1997
Facts:
Conchita Nool obtained a loan from the DBP which was secured by a real
estate mortgage of 2 parcels of land. She failed to pay the loan at maturity
and as a result, DBP foreclosed the mortgaged properties. Conchita Nool
failed to redeem the lands within the 1-year redemption period so DBP
contacted Anacleto Nool, Conchitas brother to redeem the properties, which
he did and the titles on the lands were later on transferred to Anacleto. As a
part of their agreement, Anacleto agreed to buy from Conchita the 2 parcels
of land under controversy, with another undertaking that the plaintiffs can
redeem said lands, at anytime they have the necessary amount. Conchita
asked Anacleto to return the same but was refused by the latter, impelling
them to come to court for relief in order to reeem the properties subject to
their agreement.
Issue: Whether or not there is a valid contract of sale and repurchase
between Anacleto and Conchita Nool.

Held:
No. The contract of sale and repurchase are not valid for the reason that the
sellers were no longer the owners of the property at the time it is delivered.
Nemo dat quod non habet states the principle that no one can give what he
does not have. In the case at bar, sellers can no longer deliver the object of
the sale to the buyers, as the buyers themselves have already acquired title
and delivery thereof from the rightful owner, which is DBP. Furthermore, Art.
1459 of the Civil Code provides that the vendor must the right to transfer the
ownership thereof at the time it is delivered. Here, delivery of ownership is no
longer possible. It has become impossible. Therefore, the contract of sale is
held to be void and as the contract of repurchase being dependent upon the
contract of sale among Conchita and Anacleto Nool, it is also considered void.
As petitioners sold nothing, it follows that they can also repurchase nothing.
Nothing sold, nothing to repurchase.