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IV. PERFECTION AND CONSUMMATION OF CONTRACT OF SALE, HOPE ALREADY EXISTS …

- - - - D. PERFECTION OF CONTRACT
        
        E. CONSUMMATION OF CONTRACT
        
        CONTRACT OF SALE PERFECTED UPON:
        MEETING OF MINDS ON THE THING:
        
        OBJECT OF THE CONTRACT
        
        PRICE
        Article 1475. 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 SUCH MOMENT, PARTIES MAY:
        RECIPROCALLY DEMAND PERFORMANCE
        From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. (1450a)
        
        CONSENT:
        MEETING OF OFFER + ACCEPTANCE
        UPON THE THING & CAUSE
        Article 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract.
        
        NO PERFECTION OF SALE IF:
        HOW TO PAY PURCHASE PRICE
        NOT AGREED ON
        Where parties still have to meet and agree on how and when the DP and installment payments are to be made = No contract of sale perfected yet
        (Jurisprudence)
        Agreement on price but a disagreement on the manner of its payment = NO consent.
        Lack of consent is distinct from lack of consideration.
        (Reviewer)
        
        CONCEPT OF PERFECTION;
        PERFECTION IN
        -CONSENSUAL vs REAL
        
        NECESSITY FOR
        -PAYMENT or
        -DELIVERY OF THING
        
        PAYMENT OF EARNEST MONEY AS PROOF OF PERFECTION
        
        PERFECTION OF SALE BY AUCTION
        
        EXPROPRIATION
        
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        IF AUCTION IN LOTS:
        -EACH LOT NEEDS A SEPARATE CONTRACT OF SALE
        Article 1476. In the case of a sale by auction:
        (1) Where goods are put up for sale by auction in lots, each lot is the subject of a separate contract of sale.
        
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        MATCH:
        ACTUAL OCCUPANT CAN
        MATCH HIGHEST BIDDER
        The highest bidder for Lot No. 646-A-3 was Hever Bascon but Morales was allowed to match the highest bid since she had a preferential right to the lot as actual occupant thereof. 6 Morales thus paid the required deposit and partial payment for the lot.
        It does not matter that Morales merely matched the bid of the highest bidder at the said auction sale. The contract of sale was nevertheless perfected as to Morales, since she merely stepped into the shoes of the highest bidder.||| (Province of Cebu v. Heirs of Morales, G.R. No. 170115, [February 19, 2008])
        
        EARNEST MONEY IN CONTRACT OF SALE
        =
        
        PART OF PRICE
        
        PROOF OF PERFECTION OF CONTRACT
        Article 1482. Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract. (1454a)
        
        IF CONTRACT TO SELL (NOT SALE),
        EARNEST MONEY IS:
        
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        "EARNEST MONEY" vs "OPTION MONEY"
        There are clear distinctions between earnest money and option money, viz.:
        
        (a) earnest money is PART of the purchase price, while option money is the money given as a distinct consideration for an option contract;
        
        (b) earnest money is given only where there is already a SALE, while option money applies to a sale not yet perfected; and
        
        (c) when earnest money is given, the buyer is bound to pay the BALANCE, while when the would-be buyer gives option money, he is not required to buy. ||| (Adelfa Properties, Inc. v. Court of Appeals, G.R. No. 111238, [January 25, 1995], 310 PHIL 623-652)
        
        CORRELATIVE DUTIES IN A SALE:
        
        BUYER PAYS
        SELLER DELIVERS
        A contract of sale carries the correlative duty of the seller to deliver the property and the obligation of the buyer to pay the agreed price.
        
        NOT REQUIRED FOR PERFECTION
        BUT not needed for perfection of sale.
        Only consent is needed.
        
        CONSENSUAL = PERFECTED UPON:
        MEETING OF MINDS
        The contract is perfected the moment there is the meeting of the minds, giving rise to the obligation to deliver the thing
        
        REAL = PERFECTED UPON:
        DELIVERY
        The contract is perfected upon the delivery of the thing which is the subject matter of the contract
        
        VERBAL OR NOT -> BINDING
        GR: Verbal or written contract is binding upon the parties
        XN: Law requires a specific form for the contract of sale
      - CAUSE:
        
        ONEROUS:
        -PRESTATION or PROMISE OF A THING/SERVICE BY THE OTHER
        ARTICLE 1350. In onerous contracts the cause is understood to be, for each contracting party, the prestation or promise of a thing or service by the other;
        
        REMUNERATORY:
        -SERVICE/BENEFIT WHICH IS REMUNERATED
        in remuneratory ones, the service or benefit which is remunerated; and
        
        PURE BENEFICENCE:
        -LIBERALITY
        in contracts of pure beneficence, the mere liberality of the benefactor. (1274)
        
        MOTIVE ≠ CAUSE
        ARTICLE 1351. The particular motives of the parties in entering into a contract are different from the cause thereof. (n)
        
        PRESUMED EXISTENT CAUSE
        ARTICLE 1354. Although the cause is not stated in the contract, it is presumed that it exists and is lawful,
        
        FALSE CAUSE -> VOID
        ARTICLE 1353. The statement of a false cause in contracts shall render them void,
        
        EXCEPT IF PROVED TO BE
        FOUNDED UPON ANOTHER CAUSE which is
        TRUE & LAWFUL
        if it should not be proved that they were founded upon another cause which is true and lawful. (1276)
        
        UNLESS DEBTOR PROVES CONTRARY
        unless the debtor proves the contrary. (1277)
        
        VOID:
        
        NO CAUSE
        
        UNLAWFUL CAUSE
        
        CONTRARY TO LMGCPOPP
        ARTICLE 1352. Contracts without cause, or with unlawful cause, produce no effect whatever.
        The cause is unlawful if it is contrary to law, morals, good customs, public order or public policy. (1275a)
        
        LESION/INADEQUACY
        INVALIDATION REQUIRES::
        
        FRAUD
        
        UNDUE INFLUENCE
        
        MISTAKE
        ARTICLE 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. (n)
        
        GROSS INADEQUACY = DOES NOT AFFECT A CONTRACT OF SALE
        Art. 1470. Gross inadequacy of price does not affect a contract of sale,
        
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        RATIO:
        PRICE NEED NOT BE EQUAL TO
        EXACT VALUE
        It is not required that the price be equal to the exact value of the subject matter of sale.
        (Buenaventura v. CA)
        
        EXCEPT IF OTHERWISE PROVIDED BY LAW
      - 1. GENERAL REQUIREMENTS AS TO
        PRICE
        
        2. PRICE CERTAIN
        
        3. LACK OF CAUSE or CONSIDERATION
        
        4. INADEQUACY OF THE PRICE
        
        5. SIMULATED PRICE
        
        6. FALSE PRICE
        
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        SIMULATION MAY BE:
        ABSOLUTE or RELATIVE
        Article 1345. Simulation of a contract may be absolute or relative.
        
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        INVALIDATION ON LESION REQUIRES:
        
        FRAUD
        
        MISTAKE
        
        UNDUE INFLUENCE; or
        
        SPECIFIED BY LAW
        ARTICLE 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. (n)
        
        RESCISSIBLE:
        
        GUARDIAN ENTERS INTO CONTRACT
        
        WARD SUFFERS MORE THAN 1/4 LESION
        Article 1381. The following contracts are rescissible:
        
        (1) Those which are entered into by guardians whenever the wards whom they represent suffer lesion by more than one-fourth of the value of the things which are the object thereof;
        
        PRICE NEED NOT BE EQUAL TO THE EXACT VALUE OF THE SUBJECT MATTER OF SALE
        It is not required that the price be equal to the exact value of the subject matter of sale.
        (Buenaventura v. CA)
        
        GROSS INADEQUACY = DOES NOT AFFECT A CONTRACT OF SALE
        Art. 1470. Gross inadequacy of price does not affect a contract of sale,
        
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        1/3 PRICE = STILL VALID
        The properties are more than 3-fold times more valuable than the measly sums appearing therein
        (Buenaventura v. CA)
        
        PRESUMED EXISTENT CAUSE
        ARTICLE 1354. Although the cause is not stated in the contract, it is presumed that it exists and is lawful,
        
        VOID:
        CAUSE/OBJECT DID NOT EXIST AT TIME OF TRANSACTION
        ARTICLE 1409. The following contracts are inexistent and void from the beginning:
        (3) Those whose cause or object did not exist at the time of the transaction;
        
        "Future things" vs "Object did not exist at time of transaction"
        
        Future things - Certain/uncertain to exist in future
        
        Inexistent - Certain NOT to exist
        -Not a future thing
        -No potential existence
        -No hope/expectancy exists
        
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        UNLESS DEBTOR PROVES CONTRARY
        unless the debtor proves the contrary. (1277)
        
        FAILURE TO PAY = VALID->SP/RESCISSION
        
        LACK OF CONSIDERATION = VOID
        Failure to pay the consideration results in a right to demand the fulfillment or cancellation of the obligation under an existing valid contract. ■ Lack of consideration prevents the existence of a valid contract.
        (Buenaventura v. CA)
        
        CONTRACT OF SALE
        
        PAY PRICE CERTAIN IN:
        
        MONEY
        
        EQUIVALENT
        Article 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.
        
        PRICE CERTAIN IF:
        
        REFERENCE TO ANOTHER THING CERTAIN
        Article 1469. In order that the price may be considered certain, it shall be sufficient that it be so with reference to another thing certain, or...
        
        ONE-SIDED FIXING:
        FIXING THE PRICE CAN NEVER BE LEFT TO THE DISCRETION OF ONE PARTY
        Article 1473. The fixing of the price can never be left to the discretion of one of the contracting parties.
        
        UNDETERMINABLE PRICE -> INEFFICACIOUS
        Article 1474. Where the price cannot be determined in accordance with the preceding articles, or in any other manner, the contract is inefficacious.
        
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        ACCEPTED -> PERFECTED
        However, if the price fixed by one of the parties is accepted by the other, the sale is perfected. (1449a)
        
        PRICE CERTAIN IF:
        
        DETERMINATION LEFT TO JUDGMENT OF SPECIAL PERSON/S
        ... that the determination thereof be left to the judgment of a special person or persons.
        
        COURTS MAY FIX PRICE IF
        3RD PERSONS ACTED IN:
        
        BAD FAITH
        
        MISTAKE
        If the third person or persons acted in bad faith or by mistake, the courts may fix the price.
        
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        IF UNABLE OR WILLING TO FIX -> INEFFICACIOUS
        Should such person or persons be unable or unwilling to fix it, the contract shall be inefficacious,...
        
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        Who are "Special persons"
        
        ABSOLUTE OR CONDITIONAL
        A contract of sale may be absolute or conditional. (1445a)
        
        CERTAIN
        (vs uncertain)
        If uncertain and cannot be determined under NCC rules contract is inefficacious
        
        REAL
        (vs simulated)
        (Buyer truly has intention to pay the purchase price.)
        
        PECUNIARY
        Pecuniary consists of, or is measured in, money
        
        LICIT
        When the price of any article or commodity is determined by statute, or by authority of law, any person paying any amount in excess of the max price allowed may recover such excess.
        
        MANNER OF PAYMENT
        A definite agreement on the manner of payment of the purchase price is an essential element in the formation of a binding and enforceable contract of sale.
        (Velasco v. CA)
    - - ALL THINGS ARE or MAY BE THE OBJECT OF APPROPRIATION ARE EITHER:
        
        IMMOVABLE or REAL
        
        MOVABLE or PERSONAL
        Article 414. All things which are or may be the object of appropriation are considered either:
        
        (1) Immovable or real property; or
        (2) Movable or personal property. (333)
        
        DEEMED PERSONAL PROPERTY:
        Article 416. The following things are deemed to be personal property:
        
        MOVABLES
        a. SUSCEPTIBLE OF APPROPRIATION
        b. NOT INCLUDED IN PRECEDING ARTICLE
        (1) Those movables susceptible of appropriation which are not included in the preceding article;
        
        REAL DEEMED PERSONAL BY LAW
        (2) Real property which by any special provision of law is considered as personalty;
        
        FORCES OF NATURE BROUGHT UNDER CONTROL BY SCIENCE
        (3) Forces of nature which are brought under control by science; and
        
        ALL THINGS WHICH CAN BE TRANSPORTED
        
        WITHOUT IMPAIRMENT TO REAL PROPERTY TO WHICH THEY ARE FIXED
        (4) In general, all things which can be transported from place to place without impairment of the real property to which they are fixed. (335a)
        
        DEEMED PERSONAL PROPERTY
        Article 417. The following are also considered as personal property:
        
        OBLIGATIONS & ACTIONS
        
        WHICH HAVE FOR THEIR OBJECT: MOVABLES/DEMANDABLE SUMS
        (1) Obligations and actions which have for their object movables or demandable sums; and
        
        SHARES OF STOCK OF:
        a. AGRICULTURAL
        b. COMMERCIAL
        c. INDUSTRIAL ENTITIES
        (ALTHOUGH THEY MAY HAVE REAL ESTATE)
        (2) Shares of stock of agricultural, commercial and industrial entities, although they may have real estate. (336a)
        
        IMMOVABLE PROPERTY:
        Article 415. The following are immovable property:
        
        LAND, BLDGS, ROADS & CONSTRUCTIONS OF ALL KINDS ADHERED TO SOIL
        (1) Land, buildings, roads and constructions of all kinds adhered to the soil;
        
        TREES, PLANTS, AND GROWING FRUITS
        
        WHILE THEY ARE ATTACHED TO LAND;
        OR
        
        FORM AN INTEGRAL PART OF AN IMMOVABLE
        (2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable;
        
        EVERYTHING ATTACHED TO IMMOVABLE
        a. IN A FIXED MANNER
        b. IN SUCH A WAY IT CANNOT BE SEPARATED THEREFROM
        c. WITHOUT BREAKING THE MATERIAL/DETERIORATION OF THE OBJECT
        (3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object;
        
        ORNAMENTS
        a. PLACED IN A MANNER REVEALING INTENTION TO ATTACH THEM PERMANENTLY
        (4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements;
        
        MACHINERY, RECEPTACLES, INSTRUMENTS, OR IMPLEMENTS
        a. INTENDED FOR AN INDUSTRY
        b. CARRIED ON IN A BUILDING/LAND
        c. TENDS TO DIRECTLY MEET THE NEEDS OF SAID INDUSTRY/WORKS
        (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works;
        
        IMMOVABLE PROPERTY:
        
        ANIMAL HOUSES & BREEDING PLACES
        a. PLACED THEM w/
        b. INTENTION TO HAVE THEM PERMANENTLY ATTACHED TO LAND
        c. FORMING A PERMANENT PART OF IT
        (6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included;
        
        FERTILIZER ACTUALLY USED
        (7) Fertilizer actually used on a piece of land;
        
        MINES, QUARRIES, & SLAG DUMPS, WHILE MATTER THEREOF FORMS PART OF THE BED AND WATERS (RUNNING/STAGNANT)
        (8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant;
        
        DOCKS AND STRUCTURES
        a. THOUGH FLOATING
        b. INTENDED BY NATURE & OBJECT TO REMAIN AT A FIXED PLACE
        c. on a RIVER/LAKE/COAST
        (9) Docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast;
        
        CONTRACTS FOR PUBLIC WORKS, AND SERVITUTES AND OTHER REAL RIGHTS OVER IMMOVABLE PROPERTY
        (10) Contracts for public works, and servitudes and other real rights over immovable property. (334a)
        
        How are contracts immovable property?
        Are contracts even property in the first place?
        
        FRUITS ARE DISTINCT FROM THE LAND AND IMPROVEMENTS
        While coconut trees are permanent improvements of a land, their nuts are natural or industrial fruits which are meant to be gathered or severed from the trees, to be used, enjoyed, sold or otherwise disposed of by the owner of the land.
        (Pichel v. Alonzo)
      - PROPERTY IS EITHER OF:
        
        PUBLIC DOMINION
        
        PRIVATE OWNERSHIP
        Article 419. Property is either of public dominion or of private ownership. (338)
        
        OF PUBLIC DOMINION:
        Article 420. The following things are property of public dominion:
        
        INTENDED FOR PUBLIC USE
        (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character;
        
        BELONGS TO THE STATE
        a. EVEN IF NOT BEING FOR PUBLIC USE
        b. INTENDED FOR:
        -PUBLIC SERVICE
        -DEVELOPMENT OF NATIONAL WEALTH
        (2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth. (339a)
        
        PATRIMONIAL PROPERTY
        
        ALL OTHER PROPERTY OF THE STATE NOT OF A CHARACTER IN Art. 420(2)
        Article 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property. (340a)
        
        NO LONGER INTENDED FOR PUBLIC USE/SERVICE
        Article 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State. (341a)
    - - a. DETERMINATE
        
        OBJECT CERTAIN
        ARTICLE 1318. There is no contract unless the following requisites concur: (2) Object certain which is the subject matter of the contract;
        
        KIND
        ARTICLE 1349. The object of every contract must be determinate as to its kind.
        
        "1 HECTARE OF LAND AS INHERITANCE" = DETERMINATE KIND
        It cannot be disputed that the object is determinable as to its kind, i.e. 1 hectare of land as inheritance, and can be determined without need of a new contract or agreement. 6 Clearly, the Paknaan has all the earmarks of a valid contract.||| (Quiros v. Arjona, G.R. No. 158901, [March 9, 2004], 468 PHIL 1000-1011)
        
        REMEDY = REFORMATION :check:
        (REQ: MEETING OF MINDS)
        Although both parties agreed to transfer one-hectare real property, they failed to include in the written document a sufficient description of the property to convey. This error is not one for nullification of the instrument but only for reformation.
        Article 1359 of the Civil Code provides:
        When, there having been a meeting of the minds of the parties to a contract, their true intention is not expressed in the instrument purporting to embody the agreement by reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the reformation of the instrument to the end that such true intention may be expressed.
        If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of the parties, the proper remedy is not reformation of the instrument but annulment of the contract.
        Reformation is a remedy in equity whereby a written instrument is made or construed so as to express or conform to the real intention of the parties where some error or mistake has been committed. 7
        In granting reformation, the remedy in equity is not making a new contract for the parties, but establishing and perpetuating the real contract between the parties which, under the technical rules of law, could not be enforced but for such reformation.
        ||| (Quiros v. Arjona, G.R. No. 158901, [March 9, 2004], 468 PHIL 1000-1011)
        
        VOID:
        INTENTION CANNOT BE ASCERTAINED
        ARTICLE 1409. The following contracts are inexistent and void from the beginning:
        (6) Those where the intention of the parties relative to the principal object of the contract cannot be ascertained;
        
        CONTRACT OF SALE
        X X X
        
        DELIVER DETERMINATE! THING (OBJECT)
        X X X
        Article 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. X X X
        
        SEGREGATED:
        DETERMINATE IF:
        
        PARTICULARLY DESIGNATED
        
        PHYSICALLY SEGREGATED
        -FROM ALL OTHERS OF THE SAME CLASS
        ARTICLE 1460. A thing is determinate when it is particularly designated or physically segregated from all others of the same class.
        
        SEGREGATED
        DETERMINABLE
        
        DETERMINABLE
        
        AT TIME CONTRACT IS ENTERED INTO
        
        WITHOUT NECESSITY OF A:
        a. NEW/FURTHER AGREEMENT
        b. BETWEEN PARTIES
        The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the thing is capable of being made determinate without the necessity of a new or further agreement between the parties. (n)
        
        "PHYSICALLY SEGREGATED" SATISFIED BY TECHNICAL DESCRIPTION
        The subject of the coal operating contract was physically segregated from all other pieces of coal-rich Eastern Samar property by the technical description attached to said contract.||| (Philippine National Bank v. Court of Appeals, G.R. No. 118357, [May 6, 1997], 338 PHIL 795-826)
        
        QUANTITY
        
        DETERMINABLE WITHOUT NEED OF A NEW CONTRACT!
        The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties. (1273)
      - b. LICIT
        
        LICIT
        
        THING MUST BE LICIT
        
        VENDOR'S RIGHT TO TRANSFER OWNERSHIP
        -AT TIME IT IS DELIVERED :alarm_clock:
        Article 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. (n)
        
        VOID CONTRACT:
        
        CAUSE/OBJECT/PURPOSE IS
        CONTRARY TO LAW, MORALS, GOOD CUSTOMS, PUBLIC ORDER or PUBLIC POLICY
        ARTICLE 1409. The following contracts are inexistent and void from the beginning:
        (1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy;
        
        PUBLIC DOMAIN -> VOID
        (Martinez v. CA)
      - c. WITHIN COMMERCE OF MEN
        
        MAY BE OBJECT OF A CONTRACT
        
        NOT OUTSIDE COMMERCE OF MEN =
        ARTICLE 1347. All things which are not outside the commerce of men, including future things, may be the object of a contract.
        
        NOT INTRANSMISSIBLE
        All rights which are not intransmissible may also be the object of contracts. No contract may be entered into upon future inheritance except in cases expressly authorized by law.
        
        NOT CONTRARY TO LMGcPoPp
        All services which are not contrary to law, morals, good customs, public order or public policy may likewise be the object of a contract.
        
        VOID CONTRACTS:
        OUTSIDE COMMERCE OF MEN
        ARTICLE 1409. The following contracts are inexistent and void from the beginning: (4) Those whose object is outside the commerce of men;
        
        MAY NOT BE OBJECT OF CONTRACTS:
        FUTURE INHERITANCE
        No contract may be entered into upon future inheritance...
        
        EXCEPT IF EXPRESSLY! AUTHORIZED BY LAW
        ...except in cases expressly authorized by law.
        
        What are those?
        
        FUTURE THINGS MAY BE OBJECT OF A CONTRACT
        
        What is a future thing?
      - d. NOT IMPOSSIBLE
        
        IMPOSSIBLE THINGS OR SERVICES
        CANNOT BE THE OBJECT OF CONTRACTS
        ARTICLE 1348. Impossible things or services cannot be the object of contracts.
      - e. THING MUST EXIST or HAVE A
        POTENTIAL EXISTENCE
        
        MAY BE OBJECT OF A CONTRACT
        
        NOT OUTSIDE COMMERCE OF MEN =
        ARTICLE 1347. All things which are not outside the commerce of men, including future things, may be the object of a contract.
        
        TRANSMISSIBLE RIGHTS
        All rights which are not intransmissible may also be the object of contracts. No contract may be entered into upon future inheritance except in cases expressly authorized by law.
        
        SERVICES NOT CONTRARY TO LMGcPoPp
        All services which are not contrary to law, morals, good customs, public order or public policy may likewise be the object of a contract.
        
        VOID:
        CAUSE/OBJECT DID NOT EXIST AT TIME OF TRANSACTION
        ARTICLE 1409. The following contracts are inexistent and void from the beginning:
        (3) Those whose cause or object did not exist at the time of the transaction;
        
        OBJECT:
        THINGS WITH POTENTIAL EXISTENCE
        Article 1461. Things having a potential existence may be the object of the contract of sale.
        
        GOODS MAY BE:
        
        EXISTING GOODS
        
        "FUTURE GOODS"
        -GOODS TO BE ACQUIRED BY SELLER
        Article 1462. The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the seller after the perfection of the contract of sale, in this Title called "future goods."
        
        "CONTINGENT GOODS"
        ACQUISITION OF SELLER MAY
        DEPEND ON A CONTINGENCY
        There may be a contract of sale of goods, whose acquisition by the seller depends upon a contingency which may or may not happen. (n)
        
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        "Future goods" vs Contingent Goods
        
        "Future" - Future; certain IF it will happen
        
        "Contingent" - Future; uncertain IF it will happen
        
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        SALE OF A MERE HOPE/EXPECTANCY:
        SUBJECT TO EXISTENCE OF THING
        The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the thing will come into existence.
        
        VAIN HOPE/EXPECTANCY = VOID
        The sale of a vain hope or expectancy is void. (n)
        
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        "Vain" vs Not vain
        "Subject" how?
        If vain (did not come to existence) = Void
        If not vain (came to existence) = Valid
        
        "Future things" vs "Object did not exist at time of transaction"
        
        Future things - Certain/uncertain to exist in future
        
        Inexistent - Certain NOT to exist
        -Not a future thing
        -No potential existence
        -No hope/expectancy exists
        
        Example of "Future things"
        
        Condominiums still in construction
        -The completed condominium is the object, but such completed condo is not yet existing; only the incomplete condo existing.
        (Specified Contractors & Dev't, Inc. v. Pobocan)
        
        Short Sale
        -Stocks not yet owned by seller
        (Hemedes v. CA)
        
        FUTURE THINGS MAY BE OBJECT OF A CONTRACT
        
        What is a future thing?
        
        MAY NOT BE OBJECT OF CONTRACTS:
        FUTURE INHERITANCE
        No contract may be entered into upon future inheritance...
        
        EXCEPT IF EXPRESSLY! AUTHORIZED BY LAW
        ...except in cases expressly authorized by law.
      - OBJECT REQUIREMENTS
        
        DETERMINATE
        
        LICIT
        
        WITHIN COMMERCE OF MEN
        
        NOT IMPOSSIBLE
    - - a. EXISTING GOODS
        
        GOODS MAY BE:
        
        EXISTING GOODS
        
        "FUTURE GOODS"
        - ACQUIRED AFTER PERFECTION
        Article 1462. The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the seller after the perfection of the contract of sale, in this Title called "future goods."
        
        "CONTINGENT GOODS"
        ACQUISITION OF SELLER MAY
        DEPEND ON A CONTINGENCY
        There may be a contract of sale of goods, whose acquisition by the seller depends upon a contingency which may or may not happen. (n)
        
        "Future goods" vs Contingent Goods
        
        "Future" - Future; certain IF it will happen
        
        "Contingent" - Future; uncertain IF it will happen
      - b. FUTURE GOODS
      - c. THINGS HAVING A POTENTIAL EXISTENCE
        
        OBJECT:
        THINGS WITH POTENTIAL EXISTENCE
        Article 1461. Things having a potential existence may be the object of the contract of sale.
        
        OBJECT:
        MERE HOPE/EXPECTANCY:
        SUBJECT TO EXISTENCE OF THING
        The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the thing will come into existence.
        
        "Vain" vs Not vain
        "Subject" how?
        If vain (did not come to existence) = Void
        If not vain (came to existence) = Valid
        
        i. HOPE or EXPECTANCY
        
        VAIN HOPE/EXPECTANCY = VOID
        The sale of a vain hope or expectancy is void. (n)
        
        ii. EMPTIO REI SPERATAI v. EMPTIO SPEI
        
        EMPTIO REI SPERATAE
        (Sale of thing expected)
        
        CERTAIN EXISTENCE
        Future thing is certain as to itself, but uncertain as to its quantity and quality
        
        IF DOES NOT HAPPEN:
        VOID
        Produces no effect if the condition does not happen because of the absence of an essential element
        
        2 more items...
        
        EMPTIO SPEI
        (Sale of mere hope or expectancy)
        
        UNCERTAIN EXISTENCE
        Not certain that the thing itself will exist, much less its quantity and quality (Sale of a sweepstake ticket – winning is not guaranteed and also the quantity of the prize)
    - - a. THINGS IN LITIGATION
        
        RESCISSIBLE CONTRACT:
        THING UNDER LITIGATION
        
        UNDER LITIGATION
        
        ENTERED INTO BY DEFENDANT
        
        WITHOUT KNOWLEDGE + APPROVAL of:
        -LITIGANTS/COMPETENT JUDICIAL AUTH
        ARTICLE 1381(4).
        The following contracts are rescissible:
        (4) Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority;
        
        RESCISSION OBLIGATION:
        RETURN
        
        THING/PRICE
        
        FRUITS
        
        INTEREST
        ARTICLE 1385. Rescission creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interest;
        
        NO RESCISSION IF
        
        DEMANDER CANNOT RESTORE
        consequently, it can be carried out only when he who demands rescission can return whatever he may be obliged to restore.
        
        INNOCENT THIRD PURCHASER'S
        LEGAL POSSESSION
        Neither shall rescission take place when the things which are the object of the contract are legally in the possession of third persons who did not act in bad faith.
        
        DAMAGES AGAINST PERSON CAUSING LOSS
        In this case, indemnity for damages may be demanded from the person causing the loss.
        
        Does "legally in possession" exclude
        unlawful deprivation by person causing loss
        +
        legal possession by innocent third party?
        
        NOTICE OF LIS PENDENS -> NOTICE TO THIRD PARTIES
        The filing of a notice of lis pendens charges all strangers with a notice of the particular litigation referred to therein. Those third parties who still buy the property despite this notice risk losing the property in case litigation does not lean in their favor.
      - b. UNDIVIDED INTEREST/SHARE IN A THING
        
        SOLE OWNER MAY SELL
        UNDIVIDED INTEREST
        ARTICLE 1463. The sole owner of a thing may sell an undivided interest therein. (n)
        
        FUNGIBLE GOODS SOLD AS:
        UNDIVIDED SHARE of a SPECIFIC MASS
        ARTICLE 1464. In the case of fungible goods, there may be a sale of an undivided share of a specific mass,
        EVEN THOUGH
        PURPORTEDLY THERE'S:
        
        DEFINITE:
        a. NUMBER
        b. WEIGHT; or
        c. MEASURE
        though the seller purports to sell and the buyer to buy a definite number, weight or measure of the goods in the mass, and
        
        UNDETERMINED MEASURE
        though the number, weight or measure of the goods in the mass is undetermined.
        
        CO-OWNER'S RIGHTS OVER SHARE:
        
        FULL OWNERSHIP
        -THING
        -FRUITS
        -BENEFITS
        
        ALIENATE
        
        ASSIGN
        
        MORTGAGE
        
        SUBSTITUTE
        ARTICLE 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, ...
        
        ALIENATION/MORTGAGE
        LIMITED TO SHARE
        But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. (399)
        
        EXCEPT WHEN PERSONAL RIGHTS ARE INVOLVED
        ...except when personal rights are involved
        
        BUYER OWNS SHARE IN COMMON
        By such a sale the buyer becomes owner in common of such a share of the mass as the number, weight or measure bought bears to the number, weight or measure of the mass.
        
        IF MASS < MA$$ BOUGHT
        THEN:
        
        BUYER OWNS:
        WHOLE
        +
        
        SELLER MUST MAKE GOOD: with
        SAME KIND & QUALITY
        If the mass contains less than the number, weight or measure bought, the buyer becomes the owner of the whole mass and the seller is bound to make good the deficiency from goods of the same kind and quality,
        
        UNLESS A CONTRARY INTENT APPEARS
        unless a contrary intent appears. (n)
        
        1 more item...
      - c. SUBJECT TO A RESOLUTORY CONDITION
        
        OBJECT:
        SUBJECT TO RESOLUTORY CONDITION
        ARTICLE 1465. Things subject to a resolutory condition may be the object of the contract of sale. (n)
    - - REQUIREMENTS OF SALE
        
        LICIT THING
        
        RIGHT TO TRANSFER OWNERSHIP
        -AT TIME OF DELIVERY! :alarm_clock:
        ARTICLE 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. (n)
        
        NOT necessarily at perfection?
  - - - OFFER: CERTAIN
        ACCEPTANCE: ABSOLUTE
        The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a counter-offer.x x x
        
        ACCEPTANCE BY LETTER = BINDS OFFEROR FROM TIME OF KNOWLEDGE
        Acceptance made by letter or telegram does not bind the offerer except from the time it came to his knowledge.
        
        PRESUMED ENTERED INTO:
        WHERE OFFER WAS MADE
        The contract, in such a case, is presumed to have been entered into in the place where the offer was made. (1262a)
        
        OFFER MAY FIX:
        
        TIME
        
        PLACE
        
        MANNER OF ACCEPTANCE
        Article 1321. The person making the offer may fix the time, place, and manner of acceptance, all of which must be complied with. (n)
        
        OFFER THROUGH AGENT: ACCEPTED
        UPON COMMUNICATION TO AGENT
        Article 1322. An offer made through an agent is accepted from the time acceptance is communicated to him. (n)
        
        QUALIFIED ACCEPTANCE = COUNTER-OFFER
        
        MEANING OF "CERTAIN"
        Ma'am:
      - OPTION CONTRACT = UNACCEPTED OFFER
        A contract of option is a continuing offer or contract by which the owner stipulates with another that the latter shall have the right to buy the property at a fixed price within a time certain, or under, or in compliance with, certain terms and conditions. It is also called an "unaccepted offer"
        (Limson v. CA)
        
        OPTION MONEY MAY BE
        FORFEITED BY BUYER
        Buyer is bound to pay the balance, while when the would-be buyer gives option money, he is not required to buy, but may even forfeit it depending on the terms of the option.
        (This might pertain to Contract to Sell)
        
        RATIO: PRIVILEGE, NOT A CONTRACT
        The option not of itself a purchase, but merely secures the privilege to buy; it is not a sale of property but a sale of the right to purchase ○ a contract by which the owner of property agrees with another person that he shall have the right to buy his property at a fixed price within a certain time. It imposes no binding obligation on the person holding the option, aside from the consideration for the offer.
        
        NOT A CONTRACT UNTIL ACCEPTANCE
        Until acceptance it is not, properly speaking, a contract, and does not vest, transfer, or agree to transfer, any title to, or any interest or right in the subject matter, but is merely a contract by which the owner of the property gives the optionee the right or privilege of accepting the offer and buying the property on certain terms.
    - - IF OFFEROR HAS ALLOWED A CERTAIN PERIOD TO ACCEPT:
        
        OFFER MAY BE WITHDRAWN
        
        ANY TIME BEFORE ACCEPTANCE by
        
        COMMUNICATING WITHDRAWAL
        Article 1324. When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn at any time before acceptance by communicating such withdrawal,
        
        BUSINESS ADS =
        MERE INVITATIONS TO MAKE AN OFFER
        Article 1325. Unless it appears otherwise, business advertisements of things for sale are not definite offers, but mere invitations to make an offer. (n)
        
        ADS FOR BIDDERS:
        MERE INVITATIONS TO MAKE PROPOSALS
        Article 1326. Advertisements for bidders are simply invitations to make proposals, and
        
        ADVERTISER NOT BOUND TO ACCEPT HIGHEST or LOWEST BIDDER
        the advertiser is not bound to accept the highest or lowest bidder,
        
        UNLESS CONTRARY APPEARS
        unless the contrary appears. (n)
        
        EXCEPT WHEN THE OPTION IS FOUNDED UPON A CONSIDERATION,
        PAID OR PROMISED
        except when the option is founded upon a consideration, as something paid or promised. (n)
      - "BEFORE ACCEPTENCE IS CONVEYED!"
        "Before acceptance is conveyed" means before receipt of notice of acceptance right?
        Example: If the buyer has accepted and then becomes insolvent BEFORE notice of acceptance is received by the seller, then the offer becomes ineffective as to leave no meeting of offer and acceptance upon receipt of notice of acceptance.
  - - - RoR vs. OPTION
        RoR: holder must wait until the owner decides to sell the property.
        Option: Option holder may accept then and there
      - VIOLATION:
        
        RESCISSION
        
        SPECIFIC PERFORMANCE
        A sale made in violation of a right of first refusal is valid. However, it may be rescinded, OR, as in this case, may be the subject of an action for specific performance.
      - TERMS w/ OPTION HOLDER,
        =
        TERMS w/ FINAL BUYER
        In Parañaque Kings Enterprises, Inc. v. CA, it was ruled that in order to have full compliance with the right of first refusal, there should be identity in the terms and conditions offered to the person holding a right of first refusal and to that offered to the final buyer. Otherwise, the right would be rendered illusory.
        
        UNLESS INEQUITABLE
        The circumstances of this case, however, dictate the application of a different ruling. An offer of the property to TRCDC under identical terms and conditions of the offer previously given to Pacunayen would be inequitable.
        (Tanay Recreation v. Fausto)
        
        IF INEQUITABLE -> FMV AT TIME OF SALE TO NON-OPTION BUYER
        The subject property was sold in 1990 to Pacunayen for a measly sum of P10,000. Obviously, the price given was very small because the sale was between a mother and her daughter. ▪ As admitted by Pacunayen, "the sale made in her favor by her mother was just a formality so that she may have the proper representation with TRCDC in the absence of her parents. ▪ Consequently, the offer to be made to TRCDC in this case should be under reasonable terms and conditions, taking into account the fair market value of the property at the time it was sold to Pacunayen.
        (Tanay Recreation v. Fausto)