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G.R. No. 156437. March 1, 2004NATIONAL HOUSING AUTHORITY vs. GRACEBAPTIST CHURCH and COURT

OF APPEALS

FACTS:On June 13, 1986, Respondent GraceBaptist Church wrote a letter to NHA manifesting their intent to purchase

Lot 4 and 17 of the GeneralMariano Alvarez Resettlement Project in Cavite. Thelatter granted request hence respondent

entered intopossession of the lots and introduced improvementsthereon.On February 22, 1991, NHA passed aresolution

approving the sale of the subject lots torespondent Church for 700 per square meter, a totalof P430,500. respondents wereduly informed.On April 8, 1991, respondent churchtendered a check amounting to P55,350 contendingthat this was the

agreed price. NHA avers stating thatthe price now (1991) is different from before (1986).The trial court rendered a

decision in favour of NHA stating that there was no contract of sale,ordering to return the said lots to NHA and to

payNHA rent of 200 pesos from the time it tookpossession of the lot.Respondent Church appealed to the CAwhich affirms

the decision of RTC regarding nocontract of sale but modifying it by ordering NHA toexecute the sale of the said lots to

Church for 700 per square, with 6% interest per annum from March1991. Petitioner NHA filed a motion for

reconsideration which was denied. Hence thispetition for review on certiorari

ISSUE:WON NHA can be compelled to sell the lots under market value?

HELD:No, because the contract has not beenperfected.

The Church despite knowledge that itsintended contract of sale with the NHA had not beenperfected proceeded to

introduce improvements onthe land. On the other hand, NHA knowingly grantedthe Church temporary use of the subject

propertiesand did not prevent the Church from makingimprovements thereon. Thus the Church and NHA,who both acted

in bad faith shall be treated as if theywere both in good faith. In this connection Art 448provides:

the owner of the land in which anything has been built, sown or planted in good faith, shall have the right to appropriate as

his own the works,sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige

theone who built or planted to pay the price of the land,and the one who sowed, the proper rent. However,the builder or

planter cannot be obliged to buy theland and if its value is considerably more than that of the building or trees. In such

case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after

proper indemnity. The parties shall agree, on case of disagreement, court shall fix.

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Buenaventura v Court of Appeals, 416 SCRA 263 (2003)

Facts: Sought to be declared null and void ab initio are certain deeds of sale of real property executed by defendant

parents Leonardo Joaquin and Feliciana Landrito in favor of their co-defendant children. The petitioners contend that

there was no actual valid consideration and that assuming that there was consideration in the sums reflected the properties

are more than three-fold times more valuable than the small sums appearing therein. The RTC ruled in favor of the

defendants and dismissed the case. RTCs ruling was affirmed by CA. Hence the appeal.

Issue:Whether or not there was a valid consideration in the deeds of sale

Held: If there is a meeting of the minds of the parties as to the price, the contract of sale is valid, despite the manner of

payment, or even the breach of that manner of payment. If the real price is not stated in the contract, then the contract of

sale is valid but subject to reformation.

Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a contract, unless there has

been fraud, mistake or undue influence.

Article 1470 of the Civil Code further provides:Gross inadequacy of price does not affect a contract of sale, except as may

indicate a defect in the consent, or that the parties really intended a donation or some other act or contract.

Petitioners failed to prove any of the instances mentioned in Articles 1355 and 1470 of the Civil Code which wouldinvalidate, or even affect, the Deeds of Sale. Indeed, there is no requirement that the price be equal to the exact value of

the subject matter of sale. All the respondents believed that they received the commutative value of what they gave.

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LABAGALA V SANTIAGO

Facts: Jose T. Santiago owned a parcel of land.Alleging that Jose had fraudulently registered itin his name alone, his sisters Nicolasa and Amanda Santiago (respondents), sued Jose for recovery of 2/3 share of the

property. On April 20, 1981, the trial court in that case decided in favor of the sisters, recognizing their right ofownership over portions of the property. Jose died intestate. Thereafter, the respondents filed

an action before the Regional Trial Court of Manila seeking to recover Joses 1/3 share over the property. Respondents claim that Joses share in the property ipso jure belongs to them because theyare the only legal heirs of their brother, who diedintestate and without issue. They allege that it ishighly improbable for petitioner to have paid the

supposed consideration of P150,000 for the saleof the subject property because petitioner wasunemployed and without any visible means of

livelihood at the time of the alleged sale.Petitioner Labagala, on the other hand, claims

that she is the daughter of Jose and argued thatthe purported sale of the property was in fact a

donation to her.The RTC held that while there was indeed noconsideration for the deed of sale executed byJose in favor of petitioner, but said deedconstitutes a valid donation.

On appeal, the Court of Appeals reversed thedecision of the RTC

Issue: Whether the purported deed of sale wasvalid

Held: There is no valid sale.

Clearly, there is no valid sale in this case. Josedid not have the right to transfer ownership ofthe entire property to petitioner since 2/3 thereof

belonged to his sisters. Petitioner could not havegiven her consent to the contract, being a minor

at the time. Consent of the contracting parties isamong the essential requisites of a contract,including one of sale, absent which there can be

no valid contract. Moreover, petitioner admittedlydid not pay any centavo for the property, which

makes the sale void. Article 1471 of the CivilCode provides:

If the price is simulated, the sale is void, but theact may be shown to have been in reality adonation, or some other act or contract.

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Heirs of Ignacia Aguilar-Reyes v Mijares, 410 SCRA 97 (2003)

FACTS:

Vicente and Ignacia were married in 1960 but had been separated de facto since 1974. In 1984, Ignacia learned that Vicente sold a property (lot) to spouses Mijares for P40,000 on 1983. She also found out that Vicente misrepresented her in the MTC declaring that she died on March 22, 1982 and that the heirs

left are him and the 5 minor children.

On September 1983, the court granted guardianship over the minor children to Vicente and authorized the latter to sell theestate of Ignacia on October 1983.

On August 9, 1984, Ignacia, through her counsel, sent a letter to respondent spouses demanding the return of her share inthe lot.

Failing to settle the matter amicably, Ignacia filed on June 4, 1996 a complaint for annulment of sale against respondentspouses.

In their answer, respondent spouses claimed that they are purchasers in good faith and that the sale was valid because it wasduly approved by the court.

Vicente Reyes, on the other hand, contended that what he sold to the spouses was only his share. On February 15, 1990, the court a quo rendered a decision declaring the sale of lot void with respect to the share of

Ignacia. It held that the purchase price of the lot was P110,000.00 and ordered Vicente to return thereof or P55,000.00 torespondent spouses.

Ignacia filed a motion for modification of the decision praying that the sale be declared void in its entirety and that therespondents be ordered to reimburse to her the rentals they collected on the apartments built on Lot No. 4349-B-2 computed

from March 1, 1983.

Both Ignacia Aguilar-Reyes and respondent spouses appealed the decision to the Court of Appeals. Pending the appealIgnacia died and she was substituted by her compulsory heirs.

Issue:

Whether or not the sale is valid, void or merely voidable?

HELD:Articles 166 and 173 of the Civil Code, the governing laws at the time the assailed sale was contracted, provide:

Art.166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is confined in a

leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership without the wifes consent. If she

refuses unreasonably to give her consent, the court may compel her to grant the same

Art. 173. The wife may, during the marriage and within ten years from the transaction questioned, ask the courts for the annulment of

any contract of the husband entered into without her consent, when such consent is required, or any act or contract of the husband

which tends to defraud her or impair her interest in the conjugal partnership property. Should the wife fail to exercise this right, she or

her heirs after the dissolution of the marriage, may demand the value of property fraudulently alienated by the husband.

In the case at bar, it is clear that the lot is a conjugal property of Ignacia and Vicente. Therefore, the sale of said lot to the Mijares

spouses, without the knowledge and consent of Ignacia Reyes, is voidable. The action to annul the sale made on 1983 was filed on

1986 which is within the prescriptive period under Article 173.

The Court finds that respondent spouses are not purchasers in good faith. They already know about the discrepancies and irregularities

in the death certificate presented by Vicente. The said errors should have prompted them to question the sale and pertaining

documents.

In this case, the Supreme Court held that the Deed of Sale executed by Vicente and respondents was annulled. The guilty husband is

asked to pay damages to Mijares spouses and to his children (petitioners).

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Abalos v. Macatangay Jr.

G.R. No. 155043, Sept. 30, 2004

Tinga, J.

Facts:

Spouses Arturo and Esther Abalos are registered owners of a parcel of land in Makati City. On June 2,1988, armed with purportedly Special Power of Attorney (SPA) issued by his wife, Arturo executed a

Receipt and Memorandum of Agreement (RMOA) in favor of the respondent binding himself to sell thesubject property to the latter and not to offer the same to other party within 30 days from date. Arturoacknowledged the receipt of P5,000, which will be deducted from the total agreed price of the subject

property amounting to P1,300,000. Seemingly, a marital squabble was brewing between the spouses.Esther executed a SPA appointing her sister to act in her behalf in connection the transfer of the property

to the respondent.

On November 16, 1989, respondent sent a letter to the spouses informing the latter of his willingness topay the agreed purchase price and thereafter. On that very same day, Esther executed a Contract to Sell tothe extent of her conjugal interest and obligated herself to surrender the possession of the property and toexecute a deed of absolute sale upon full payment. Respondent sent a letter dated December 7, 1989informing the spouses that he had already prepared a check to cover the remaining unpaid balance of the

purchase price and reiterated his demand to the latter to fulfil their obligation. However, the spousesfailed o deliver the land causing the respondent to file a complaint for specific performance.The RTC dismissed the case and ruled that the SPA ostensibly issued by Esther in favor of his husbandwas void, as it was falsified. Thus, the latter has no authority to sell the property. This ruling by the RTCwas reversed by the CA. The appellate court ruled that the SPA in favor of Arturo, assuming that it was

void, cannot affect the transaction between Ester and respondent. It was by virtue of the SPA executed byEsther appointing her sister in her behalf which binds Esther to sell the property to the respondent.

Issue:WON there was a perfected contract of sale executed between the petitioner and respondent.

Held:

No. In a contract of sale, the seller must consent to transfer the ownership in exchange for the price, thesubject matter must be determinate, and the price must be certain in money or its equivalent. In this case,there was no contract of sale rather a perfected contract of option was entered into by Arturo and

respondent. An option merely grants a privilege to buy or sell within the agreed time and purchase price.A perfected contract of option does not result in the perfection of the sale. It is only when the option isexercised may a sale be perfected. The P5,000 paid by respondent is viewed not as earnest money but

merely an option money. RMOA signifies a unilateral offer of Arturo to sell the property to respondentand does not impose the respondent an obligation to buy the said property, as in fact, the agreement does

not even bear the respondent's signature. Further, it is crystal clear that the intent of Arturo was to only togrant the respondent a privilege to buy the property within the specified period. There is nothing in the

RMOA which indicates that Arturo agreed to transfer the ownership of the land which is an essentialelement in the contract of sale.

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Antonio Medina v. CIR and CTA

Facts:

Subsequent to marriage, petitioners engaged in concessions with the government, while his wife started to engage in

business as a lumber dealer. From 1949 to 1952, petitioner sold logs to his wife. On the thesis that the sales are null and

void, CIR considered the sales by Mrs. Medina as the petitioners original sales taxable under the NIRC. Petitioner filed a

petition for reconsideration, revealing for the first time the alleged premarital agreement of complete separation of

property.

Issue:

Whether or not the sales made by the petitioner to his wife could be considered as his original taxable sales

Held:

It appears that at the time of the marriage between petitioner and his wife, they neither had any property nor business of

their own, as to have really urged them to enter into the supposed property agreement. Secondly, the testimony that the

separation of property agreement was recorded in the Registry of Property three months before the marriage, is patentlyabsurd, since such a prenuptial agreement could not be effective before marriage is celebrated, and would automatically

be cancelled if the union was called off. In the third place, despite their insistence on the existence of the ante nuptial

contract, the couple, strangely enough, did not act in accordance with its alleged covenants. It was not until July of 1954

that he alleged, for the first time, the existence of the supposed property separation agreement. Finally, the Day Book of

the Register of Deeds on which the agreement would have been entered, had it really been registered as petitioner insists,

and which book was among those saved from the ravages of the war, did not show that the document in question was

among those recorded therein.

The wife is authorized to engage in business and for the incidents that flow therefrom when she so engages therein. But

the transactions permitted are those entered into with strangers, and do not constitute exceptions to the prohibitory

provisions of Article 1490 against sales between spouses.

Contracts violative of the provisions of Article 1490 of the Civil Code are null and void. Being void transactions, the sales

made by the petitioner to his wife were correctly disregarded by the Collector in his tax assessments that considered as the

taxable sales those made by the wife through the spouses' common agent, Mariano Osorio. In upholding that stand, the

Court below committed no error.

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CORNELIA MATABUENA vs. PETRONILA CERVANTES

L-2877 (38 SCRA 284)

March 31, 1971

FACTS:

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 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.

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Philippine Trust Co. v. Roldan

Facts:

Mariano Bernardo, a minor, inherited 17 parcels of land from his deceased father. Respondent, Marianos step-mother,

was appointed his guardian. As guardian, she sold the 17 parcels to Dr. Ramos, her brother-in-law, for P14,700. After a

week, Dr. Ramos sold the lands to her for P15,000. Subsequently, she sold 4 out of 17 parcels to Emilio Cruz. Petitioner

replaced Roldan as guardian, and two months thereafter, this litigation sought to declare as null and void the sale to Dr.

Ramos, and the sale to Emilio Cruz.

Issue:

Whether the sale of the land by the guardian is null and void for being violative of the prohibition for a guardian to

purchase either in person or through the mediation of another the property of her ward

Held:

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 wards interest, and in line with the courts suspicion whenever the guardian acquireswards property we have no hesitation to declare that in this case, in the eyes of the law, Socorro Roldan took by purchase

herwards parcels thru Dr. Ramos, and that Article 1459 of the Civil Code applies.

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