.

281, C B 23, 1997 177

He f Ped E ca a .C f A ea

G.R. No. 120690. Oc ober 23, 1997.*

FRANCISCO HOLGADO and HRS. OF PEDRO ESCANLAR,

namel BERNARDO, FELY, SONIA, LILY, DYESEBEL and
NOEMI all rnamed ESCANLAR, pe i ioner , . HON. COURT
OF APPEALS, GENEROSA MARTINEZ, CARMEN CARI-AN,
RODOLFO CARI-AN, NELLY CHUA CARI-AN, for her elf and
a g ardian ad i e of her minor on, LEONELL C. CARI-AN and
FREDISMINDA CARI-AN, and SP. PAQUITO CHUA and NEY
SARROSA CHUA and REGISTER OF DEEDS OF NEGROS
OCCIDENTAL, re ponden .

Contracts; Sales; Contracts to Sell and Contracts of Sale; Words and

Phrases; In contracts to sell, ownership is retained by the seller and is not
to pass until the full payment of the price.—In contracts to sell, o nership is
retained b the seller and is not to pass until the full pa ment of the price.
Such pa ment is a positi e suspensi e condition, the failure of hich is not
a breach of contract but simpl an e ent that pre ented the obligation of the
endor to con e title from acquiring binding force. To illustrate, although a
deed of conditional sale is denominated as such, absent a pro iso that title to
the propert sold is reser ed in the endor until full pa ment of the purchase
price nor a stipulation gi ing the endor the right to unilaterall rescind the
contract the moment the endee fails to pa ithin a ed period, b its
nature, it shall be declared a deed of absolute sale.
Same; Same; Same; In a contract of sale, the non-payment of the price
is a resolutory condition which extinguishes the transaction that, for a time,
existed and discharges the obligations created thereunder.—In a contract of
sale, the non-pa ment of the price is a resolutor condition hich
e tinguishes the transaction that, for a time, e isted and discharges the
obligations created thereunder. The remed of an unpaid seller in a contract
of sale is to seek either speci c performance or rescission.
Same; Same; Same; Essential Requisites of a Contract; Where all the
essential requisites of a contract are present, the result is a valid contract,
and where the parties introduce restrictions or modalities, the lack of which
will not affect the validity of the contract but only its effectivity.—There has
arisen here a confusion in the concepts of alidit and the ef cac of a
contract. Under Art. 1318 of the

178
178 E EC E A A ED

Hei of Ped o E canla . Co of A eal

Ci il Code, the essential requisites of a contract are: consent of the

contracting parties; object certain hich is the subject matter of the contract
and cause of the obligation hich is established. Absent one of the abo e,
no contract can arise. Con ersel , here all are present, the result is a alid
contract. Ho e er, some parties introduce arious kinds of restrictions or
modalities, the lack of hich ill not, ho e er, affect the alidit of the
contract. In the instant case, the Deed of Sale, compl ing as it does ith the
essential requisites, is a alid one. Ho e er, it did not bear the stamp of
appro al of the court. This not ithstanding, the contract s alidit as not
affected for in the ords of the stipulation, . . . this Contract of Sale of
rights, interests and participations shall become effective onl upon the
appro al b the Honorable Court . . . In other ords, onl the effectivity
and not the validity of the contract is affected.
Same; Same; Actions; Courts; Succession; Wills; Settlement of Estates;
Probate; The need for approval by the probate court exists only where
speci c properties of the estate are sold and not when only ideal and
indivisible shares of an heir are disposed of—during the period of indivision
of a decedent’s estate, each heir, being a co-owner, has full ownership of his
part and may therefore alienate it; Hereditary rights in an estate can be
validly sold without need of court approval.—Then, too, petitioners are
correct in sa ing that the need for appro al b the probate court e ists onl
here speci c properties of the estate are sold and not hen onl ideal and
indi isible shares of an heir are disposed of. In the case of Dillena v. Court
of Appeals, the Court declared that it is ithin the jurisdiction of the probate
court to appro e the sale of properties of a deceased person b his
prospecti e heirs before nal adjudication. It is settled that court appro al is
necessar for the alidit of an disposition of the decedent s estate.
Ho e er, reference to judicial appro al cannot ad ersel affect the
substanti e rights of the heirs to dispose of their ideal share in the co-
heirship and/or co-o nership among the heirs. It must be recalled that
during the period of indi ision of a decedent s estate, each heir, being a co-
o ner, has full o nership of his part and ma therefore alienate it. But the
effect of the alienation ith respect to the co-o ners shall be limited to the
portion hich ma be allotted to him in the di ision upon the termination of
the co-o nership. From the foregoing, it is clear that hereditar rights in an
estate can be alidl sold ithout need of court appro al and that hen
pri ate respondents Cari-an sold their rights, interests and participation in
Lot Nos. 1616 and 1617, the could legall sell the same ithout the
appro al of the probate court.

179

L. 281, C BE 23, 1997 179

Hei of Ped o E canla . Co of A eal

 Same; Same; When the sellers, instead of availing of their right to
rescind, accept and receive delayed payments of installments beyond the
period stipulated, and the buyers are in arrears, the sellers in effect waive
and are estopped from exercising said right to rescind.—In the instant case,
the sellers ga e the bu ers until Ma 1979 to pa the balance of the
purchase price. After the latter failed to pa installments due, the former
made no judicial demand for rescission of the contract nor did the e ecute
an notarial act demanding the same, as required under Article 1592.
Consequentl , the bu ers could la full make pa ments e en after the Ma
1979 deadline, as in fact the paid se eral installments to the sellers hich
the latter accepted. Thus, upon the e piration of the period to pa , the sellers
made no mo e to rescind but continued accepting late pa ments, an act
hich cannot but be construed as a ai er of the right to rescind. When the
sellers, instead of a ailing of their right to rescind, accepted and recei ed
dela ed pa ments of installments be ond the period stipulated, and the
bu ers ere in arrears, the sellers in effect ai ed and are no estopped
from e ercising said right to rescind.

PETITIONS for re ie on cer iorari of a deci ion of he Co r of

Appeal .

The fac are a ed in he opinion of he Co r .

Ga ca c La Of ce for pe i ioner in G.R. No. 119777.
Ed d G. Ma a a for pe i ioner in G.R. No. 120690.
R a d C. Ga a e for pri a e re ponden (Cari-an).
Gi L. Pa e for pri a e re ponden Ch .

ROMERO, J.:

Before are con olida ed pe i ion for re ie of he deci ion of he

Co r of Appeal in CA-G.R. CV No. 39975 hich af rmed he rial
co r prono ncemen ha he deed of ale of righ , in ere and
par icipa ion in fa or of pe i ioner i n ll and oid.
The ca e aro e from he follo ing fac :

1 0

180 C A A
He f Ped E ca a .C f A ea

Spo e G illermo Nombre and Vic oriana Cari-an died i ho

i e in 1924 and 1938, re pec i el . Nombre heir incl de hi
nephe and grandnephe . Vic oriana Cari-an a cceeded b
her la e bro her on, Gregorio Cari-an. The la er a declared a
Vic oriana heir in he e a e proceeding
1 for Nombre and hi ife
(Special Proceeding No. 7-7279). Af er Gregorio died in 1971, hi
ife, Genero a Mar ine , and children, Rodolfo, Carmen, Leonardo
and Fredi minda, all rnamed Cari-an, 2 ere al o adj dged a heir
b repre en a ion o Vic oriana e a e. Leonardo Cari-an pa ed
a a , lea ing hi ido , Nell Ch a da. de Cari-an and minor on
Leonell, a hi heir .
 T o parcel of land, denomina ed a Lo No. 1616 and 1617 of
he Kabankalan Cada re i h an area of 29,350 q are me er and
460,948 q are me er , re pec i el , formed par of he e a e of
Nombre and Cari-an.
On Sep ember 15, 1978, Gregorio Cari-an heir , herein
collec i el referred o a pri a e re ponden Cari-an, e ec ed he
Deed of Sale of Righ , In ere and Par icipa ion orded a
follo :

NOW, THEREFORE, for and in consideration of the sum of TWO

HUNDRED SEVENTY-FIVE THOUSAND (P275,000.00) Pesos,
Philippine Currenc , to be paid b the VENDEES to the VENDORS, e cept
the share of the minor child of Leonardo Cari-an, hich should be deposited
ith the Municipal Treasurer of Himama lan, Pro ince of Negros
Occidental, b the order of the Court of First Instance of Negros Occidental,
Branch VI, Himama lan, b those presents, do hereb SELL, CEDE,
TRANSFER and CONVEY by way of ABSOLUTE SALE, all the RIGHTS,
INTERESTS and PARTICIPATION of the Vendors as to the one-half (1/2)
portion proindiviso of Lots Nos. 1616 and 1617 (Fishpond), of the
Kabankalan Cadastre, pertaining to the one-half (1/2) portion pro-indiviso
of the

________________

1 B C F I a N O a,B a 55.
2 O a S 28, 1972 S a P N . 7-7279.

1 1

L. 281, C BE 23, 1997 181

Hei of Ped o E canla . Co of A eal

late Victoriana Cari-an unto and in fa or of the Vendees, their heirs,

successors and assigns;

That this Contract of Sale of rights, interests and participations shall

become effective only upon the approval by the Honorable Court of First
Instance of Negros Occidental, Branch VI-Himamaylan. (Italics supplied.)

Pedro E canlar and Franci co Holgado, he endee ,3 ere

conc rren l he le ee of he lo referred o abo e. The
ip la ed ha he balance of he p rcha e price (P225,000.00) hall
be paid on or before Ma 1979 in a Deed of Agreemen e ec ed b
he par ie on he ame da :

WHEREAS, at the time of the signing of the Contract, VENDEES has (sic)
onl FIFTY THOUSAND (P50,000.00) Pesos a ailable thereof, and as
not able to secure the entire amount;
WHEREAS, the Vendors and one of the Vendees b the name of Pedro
Escanlar are relati es, and absolute faith and trust e ist bet een them,
herein during economic crisis, has not failed to gi e monetar succor to
the Vendors;
 WHEREAS, Vendors herein understood the present scarcit of securing
a ailable each (sic) in the amount stated in the contract;
NOW THEREFORE, for and in consideration of the sum of FIFTY
THOUSAND (P50,000.00) Pesos, Philippine Currenc , the balance of TWO
HUNDRED TWENTY FIVE THOUSAND (P225,000.00) Pesos to be paid
by the Vendees on or before May, 1979), the Vendors herein, b these
Presents, do hereb CONFIRM and AFFIRM the Deed of Sale of the
Rights, Interests and Participation dated September 15, 1978, o er Lots Nos.
1616 and 1617 ( sh-pond) of the Kabankalan Cadastre in fa or of the
VENDEES, their heirs and assigns.
That pending the complete pa ment thereof, Vendees shall not assign,
sell, lease, nor mortgage the rights, interests and participation thereof;

_______________

3 On August 2, 1979, the probate court approved the contract of lease of all the
properties of the estate dedicated to rice production. On August 9, the court approved
the contract of lease over Lot No. 1617 in Special Proceeding No. 7-7279.

1 2

182 C A A
He f Ped E ca a .C f A ea

That in the e ent the Vendees fail and/or omit to pa the balance of said
purchase price on Ma 31, 1979 and the cancellation of said Contract of
Sale is made thereb , the sum of FIFTY THOUSAND (P50,000.00) 4 Pesos
shall be deemed as damages thereof to Vendors. (Italics supplied)

Pe i ioner ere nable o pa he Cari-an heir indi id al hare ,

amo n ing o P55,000.00 each, b he d e da e. Ho e er, aid heir 5
recei ed a lea 12 in allmen from pe i ioner af er Ma 1979.
Rodolfo Cari-an a f ll paid b J ne 21, 1979. Genero a
Mar ine , Carmen Cari-an and Fredi minda Cari-an ere like i e
f ll compen
6 a ed for heir indi id al hare , per receip gi en in
e idence. The minor Leonell hare 7 a depo i ed i h he
Regional Trial Co r on Sep ember 7, 1982.
Being former le ee , pe i ioner con in ed in po e ion of Lo
No . 1616 and 1617. In ere ingl , he con in ed o pa ren ba ed
on heir lea e con rac . On Sep ember 10, 1981, pe i ioner mo ed o
in er ene in he proba e proceeding of Nombre and Cari-an a he
b er of pri a e re ponden Carian hare in Lo No . 1616 and
1617. Pe i ioner mo ion for appro al of he Sep ember 15, 1978
ale before he ame co r , led on No ember 10, 1981, a
oppo ed b pri a e re ponden Cari-an on Jan ar 5, 1982.

_______________

4 E hibit B.
5 E hibits 9-A; 9-G; 9-FF; 9-KK; 9-RR; 9-XX; 9-YY; 9-AAA; 9-BBB; 9-CCC; 9-
DDD; 9-EEE; 9-FFF; These ere evidenced b hand ritten receipts for installments
like P112.50 (one cavan of rice), P451.50 (3 cavans of rice and 1 pig), et al.
 6 Thus, in a receipt dated December 27, 1979, Fredisminda Cari-an ackno ledged
receipt of P45,625.00. Carmen Cari-an and Generosa Martine each received the
same amount. E hibits 2-6.
7 The amount of P34,218 as deposited per Order issued b Judge Oster aldo
Emilia. E hibit 8, Records, p. 23. Nell Chua vda. de Cari-an received the rest of
their share less attorne s fees and commission.
Opposition to Motion for Approval dated Januar 5, 1982.

1 3

. 281, C B 23, 1997 183

He f Ped E ca a .C f A ea

On Sep ember 16, 1982, he proba e co r appro ed a mo ion led

b he heir of Cari-an and Nombre o ell heir re pec i e hare in
he e a e. On Sep ember 21, 1982, pri a e re ponden Cari-an, in
addi ion o ome heir of G illermo Nombre, old heir hare in
eigh parcel of land incl ding Lo No . 1616 and 1617 o he
po e Ne Sarro a Ch a and Paq i o Ch a for P1,850,000.00.
One eek la er, he endor-heir , incl ding pri a e re ponden
Cari-an, led a mo ion for appro al of ale of heredi ar righ , i.e.,
he ale made on Sep ember 21, 1982 o he Ch a .
Pri a e re ponden Cari-an in i ed hi ca e for cancella ion of
ale again
10 pe i ioner (E canlar and Holgado) on No ember 3,
1982. The complained of pe i ioner fail re o pa he balance of
he p rcha e price b Ma 31, 1979 and alleged ha he onl
recei ed a o al of P132,551.00 in ca h and good . Pe i ioner
replied ha he Cari-an , ha ing been paid, had no righ o re ell he
bjec lo ; ha he Ch a ere p rcha er in bad fai h; and ha he
co r appro al of he ale o he Ch a a bjec o heir e i ing
claim o er aid proper ie .
On April 20, 1983, pe i ioner al o old heir righ and in ere
in he bjec parcel of 11 land (Lo No . 1616 and 1617) o Ed in
Ja me for P735,000.00 and rned o er po e ion of bo h lo o
he la er. The Ja me in rn, ere incl ded in he ci il ca e a
fo r h-par defendan .
On December 3, 1984, he proba e co r appro ed he Sep ember
21, 1982 ale i ho prej dice o ha e er righ , claim and
in ere o er an of ho e proper ie of he e a e hich canno be
properl and legall en ila ed and re ol ed

________________

Namel La aro Nombre, Victoria Madalag and Domingo Campillanos.

10 Civil Case No. 218 (formerl Civil Case No. 1358), then Court of First Instance
no the Regional Trial Court of Negros Occidental, Branch 61.
11 E hibit 35.

1 4

184 C A A
 He f Ped E ca a .C f A ea
12
b he co r in he ame in e a e proceeding . The cer i ca e of
i le o er he eigh lo old b he heir of Nombre and Cari-an ere
la er i ed in he name of re ponden Ne Sarro a Ch a and
Paq i o Ch a.
The rial co r allo ed a hird-par complain again he hird-
par defendan Paq i o and Ne Ch a on Jan ar 7, 1986 here
E canlar and Holgado alleged ha he Cari-an con pired i h he
Ch a hen he e ec ed he econd ale on Sep ember 21, 1982
and ha he la er ale i illegal and of no effec . Re ponden Ch a
co n ered ha he did no kno of he earlier ale of one-half
por ion of he bjec13 lo o E canlar and Holgado. Bo h par ie
claimed damage .
On April 28, 1988, he rial co r appro ed he Ch a mo ion o
le a fo r h-par complain again he po e Ja me.
Re ponden Ch a alleged ha he Ja me ref ed o aca e aid lo
de pi e repea ed demand ; and ha b rea on of he illegal
occ pa ion of Lo No . 1616 and 1617 b he Ja me , he ffered
ma eriall from ncollec ed ren al .
Mean hile, he Regional Trial Co r of Himama lan hich ook
cogni ance of Special Proceeding No. 7-7279 (In e a e E a e of
G illermo Nombre and 14 Vic oriana Cari-an) had rendered i deci ion
on Oc ober 30, 1987. The proba e co r concl ded ha ince all he
proper ie of he e a e ere di po ed of or old b he declared
heir of bo h po e , he ca e i con idered ermina ed and he
in e a e e a e of G illermo Nombre and Vic oriana Cari-an i
clo ed. The co r held:

As regards the arious incidents of this case, the Court nds no cogent
reason to resol e them since the er object of the arious

________________

12 P J B a T. P a a S a P N . 7-7279, E 3-D.
13 I a ,a a Ca a T Da a (C Ca N . 389)
a P E a a,Fa H a a E Ja a a Pa
C a a N Sa a-C a a R D N O a
R a T a C N O a J 1988.
14 E 31 a .

1 5

L. 281, C BE 23, 1997 185

Hei of Ped o E canla . Co of A eal

incidents in this case is no longer in e istence, that is to sa , the properties

of the estate of Guillermo Nombre and Victoriana Cari-an had long been
disposed of b the rightful heirs of Guillermo Nombre and Victoriana Cari-
an. In this respect, there is no need to resolve the Motion for Subrogation of
Movants Pedro Escanlar and Francisco Holgado to be subrogated to the
rights of the heirs of Victoriana Carian since all the properties of the estate
had been transferred and titled to in the name of spouses Ney S. Chua and
Dr. Paquito Chua. Since the nature of the proceedings in this case is
summary, this Court, being a Probate Court, has no jurisdiction to pass
upon the validity or invalidity of the sale of rights of the declared heirs of
Guillermo Nombre and Victoriana Cari-an to third parties. This issue must
be raised in another action where it can be properly ventilated and resolved.
Ha ing determined, after e hausted (sic) and length hearings, the
rightful heirs of Guillermo Nombre and Victoriana Cari-an, the Court found
out that the second issue has become moot and academic considering that
there are no more properties left to be partitioned among the declared heirs
as that had long ago been disposed of b the declared heirs . (Italics
supplied)

The eminal ca e a bar a re ol ed b he rial co r on December

18, 1991 in fa or of cancella ion of he Sep ember 15, 1978 ale.
Said ran ac ion a n lli ed beca e i a no appro ed b he
proba e co r a req ired b he con e ed deed of ale of righ ,
in ere and par icipa ion and beca e he Cari-an ere no f ll
paid. Con eq en l , he Deed of Sale e ec ed b he heir of
Nombre and Cari-an in fa or of Paq i o and Ne Ch a, hich a
appro ed b he proba e co r , a pheld. The di po i i e por ion
of he lo er co r deci ion read :

WHEREFORE, premises considered, judgment is hereb rendered as

follo s:

1) Declaring the follo ing contracts null and oid and of no effect:

a) The Deed of Sale, dated Sept. 15, 1978, e ecuted b the plaintiffs
in fa or of the defendants Pedro Escanlar and Francisco Holgado
(E h. A, Plaintiffs)
b) The Deed of Agreement, dated Sept. 15, 1978, e ecuted b the
plaintiffs in fa or of the defendants, Pedro Escanlar and Francisco
Holgado (E h. B, Plaintiffs)

1 6

186 C A A
He f Ped E ca a .C f A ea

c) The Deed of Sale, dated April 20, 1983, e ecuted b the defendants
in fa or of the fourth-part defendants, Dr. Ed in Ja me and Elisa
Tan Ja me
d) The sale of leasehold rights e ecuted b the defendants in fa or of
the fourth-part defendants.

2) Declaring the amount of Fift Thousand Pesos (P50,000.00) paid

b the defendants to the plaintiffs in connection ith the Sept. 15,
1978 deed of sale, as forfeited in fa or of the plaintiffs, but
ordering the plaintiffs to return to the defendants hate er amounts
the ha e recei ed from the latter after Ma 31, 1979 and the
amount of Thirt Fi e Thousand T o Hundred Eighteen & 75/100
 (P35,218.75) deposited ith the Treasurer of Himama lan,
Negros Occidental, for the minor Leonell C. Cari-an;
3) Declaring the deed of sale, dated September 23, 1982, e ecuted b
Lasaro Nombre, Victorio Madalag, Domingo Campillanos,
Sofronio Campillanos, Generosa Vda. de Martine , Carmen Cari-
an, Rodolfo Cari-an, Nell Chua Vda. de Cari-an, for herself and as
guardian ad litem of the minor Leonell C. Cari-an, and Fredisminda
Cari-an in fa or of the third-part defendants and fourth-part
plaintiffs, spouses Dr. Paquito Chua and Ne Sarrosa Chua (E h.
2 -Chua) as legal, alid and enforceable pro ided that the
properties co ered b the said deed of sale are subject of the
burdens of the estate, if the same ha e not been paid et;
4) Ordering the defendants Francisco Holgado and Pedro Escanlar and
the fourth-part defendants, spouses Dr. Ed in Ja me and Elisa
Tan Ja me, to pa jointl and se erall the amount of One Hundred
Thousand Pesos (P100,000.00) as moral damages and the further
sum of Thirt Thousand Pesos (P30,000.00) as attorne s fees to
the third-part defendant spouses, Dr. Paquito Chua and Ne
Sarrosa-Chua;
5) Ordering the fourth-part defendant spouses, Dr. Ed in Ja me and
Elisa Tan Ja me, to pa to the third-part defendants and fourth-
part plaintiffs, spouses Dr. Paquito Chua and Ne Sarrosa-Chua,
the sum of One Hundred Fift Se en Thousand Pesos
(P157,000.00) as rentals for the riceland and Three Million T o
Hundred Thousand Pesos (P3,200,000.00) as rentals for the
shpond from October, 1985 to Jul 24, 1989 plus the rentals from
the latter

_______________

15 S P34,218.75 O a S 7, 1982 S a P N . 7-
7279. E 8, R , . 23.

1 7

L. 281, C BE 23, 1997 187

Hei of Ped o E canla . Co of A eal

date until the propert shall ha e been deli ered to the spouses Dr.
Paquito Chua and Ne Sarrosa-Chua;
6) Ordering the defendants and the fourth-part defendants to
immediatel acate Lots Nos. 1616 and 1617, Kabankalan
Cadastre;
7) Ordering the defendants and the fourth-part defendants to pa
costs.
16
SO ORDERED.
17
Pe i ioner rai ed he ca e o he Co r of Appeal . Re ponden
co r af rmed he deci ion of he rial co r on Febr ar 17, 1995
and held ha he q e ioned deed of ale of righ , in ere and
par icipa ion i a con rac o ell beca e i hall become effec i e
onl pon appro al1 b he proba e co r and pon f ll pa men of
he p rcha e price.
Pe i ioner mo ion 1for recon idera ion a 20denied b re ponden
co r on April 3, 1995. Hence, he e pe i ion .
1. We di agree i h he Co r of Appeal concl ion ha he
Sep ember 15, 1978 Deed of Sale of Righ , In ere and
Par icipa ion i a con rac o ell and no one of ale.

________________

16 Decision penned b Judge Rodolfo S. La umas. Rollo, pp. 129-157.

17 CA-G.R. CV No. 39975.
1 Decision of the Court of Appeals, p. 9. Rollo, p. 65. Penned b Justice Antonio
P. Solano, ith Justices Minerva P. Gon agaRe es and Eduardo G. Montenegro,
concurring. Rollo, pp. 57-71.
1 Rollo, p. 74.
20 The petition in G.R. No. 119777 as posted on Ma 26, 1995 at the instance of
the spouses Ed in and Elisa Ja me. The ling of the petition in G.R. No. 120690 as
directed b Francisco Holgado. Counsel for the latter led a Manifestation on
November 2, 1995 stating that petitioners Escanlar and Holgado ere una are that
counsel for the Ja mes had alread led a petition for revie ; that the Ja mes and
petitioners have a common interest and thus request the consolidation of both cases.
The Court granted the request for consolidation on Januar 17, 1996. Rollo of G.R.
No. 120690, pp. 81-84.

188 C A A
He f Ped E ca a .C f A ea

The di inc ion be een con rac of ale and con rac o ell i h
re er ed i le ha been recogni ed b hi Co r in repea ed
deci ion , according o J ice J.B.L. Re21 e in L B ke age C .,
I c. . Ma i i e B i di g C ., I c., pholding he po er of
promi or nder con rac o ell in ca e of fail re of he o her par
o comple e pa men , o e raj diciall ermina e he opera ion of
he con rac , ref e he con e ance, and re ain he m of
in allmen alread recei ed here ch righ are e pre l
pro ided for.
In con rac o ell, o ner hip i re ained b he eller and i no
o pa n il he f ll pa men of he price. S ch pa men i a
po i i e pen i e condi ion, he fail re of hich i no a breach of
con rac b impl an e en ha pre en ed he obliga 22 ion of he
endor o con e i le from acq iring binding force. To ill ra e,
al ho gh a deed of condi ional ale i denomina ed a ch, ab en a
pro i o ha i le o he proper old i re er ed in he endor n il
f ll pa men of he p rcha e price nor a ip la ion gi ing he
endor he righ o nila erall re cind he con rac he momen he
endee fail o pa i hin a 23ed period, b i na re, i hall be
declared a deed of ab ol e ale.
 The Sep ember 15, 1978 ale of righ , in ere and par icipa ion
a o 1/2 por ion i di i of he o bjec lo i a con rac of
ale for he follo ing rea on : Fir , pri a e re ponden a eller
did no re er e n o hem el e he o ner hip of he proper n il
f ll pa men of he npaid balance of P225,000.00. Second, here i
no ip la ion gi ing he eller he righ o nila erall re cind he 24
con rac he momen he b er fail o pa i hin he ed period.
Prior o he ale, pe i ioner ere in po e ion of he bjec
proper a le ee . Upon ale o hem of he righ , in ere and
par icipa ion a o he 1/2 por ion i di i , he remained

_______________

21 43 SCRA 93 (Januar 31, 1972).

22 TOLENTINO, IV CIVIL CODE OF THE PHILIPPINES 3 (1992 edition).
23 Dign . CA, 158 SCRA 375 (1988).
24 Jacin . Ka a a , 209 SCRA 246, 256 (Ma 22, 1992).

. 281, C B 23, 1997 189

He f Ped E ca a .C f A ea

in po e ion, no in concep of le ee an more b a o ner 25 no

hro gh mbolic deli er kno n a adi i b e i a . Under
Ar icle 1477 of he Ci il Code, he o ner hip of he hing old i
acq ired26 b he endee pon ac al or con r c i e deli er
hereof.
In a con rac of ale, he non-pa men of he price i a re ol or
condi ion hich e ing i he he ran ac ion ha , for a ime, e i ed
and di charge he obliga ion crea ed here nder. The remed of an
npaid eller in a con rac 27 of ale i o eek ei her peci c
performance or re ci ion.
2. Ne o be di c ed i he ip la ion in he di p ed
Sep ember 15, 1978 Deed of Sale of Righ , In ere and
Par icipa ion hich read : ( )hi Con rac of Sale of righ , in ere
and par icipa ion hall become effec i e onl pon he appro al b
he Honorable Co r of Fir In ance of Negro Occiden al, Branch
VI-Himama lan. No abl , he rial co r and he Co r of Appeal
bo h held ha he deed of ale i n ll and oid for no ha ing been
appro ed b he proba e co r .

_______________

25 O nership, under Roman la and the legal s stems based on it, such as the
Civil La of the Philippines based on the Spanish Civil Code, cannot be transferred
b mere agreement. N n n di ac i , ed adi i ne d minia e m an fe en .
Tradition or deliver is needed to pass o nership. As a mode of acquisition of
propert , it consists in putting a thing at the disposal of the person to hom one
ishes to conve it. The normal mode of accomplishing this is b eal adi i or
actual ph sical handing over of the thing b the transferer to the transferee. In
contrast, there ma be s mbolical tradition, belonging to the class called feigned or
ctitious tradition, one of hich is adi i b e i man here the bu er, being alread
in possession of the thing sold due to some other cause such as lease, merel remains
in possession after the sale is effected, but no in concept of o ner.
26 Also Article 1496 of the Civil Code.
27 Dissenting opinion of Justice Flerida Ruth P. Romero in Vi a an Sa mill
C m an Inc. . CA, 219 SCRA at 397 (March 3, 1993) citing Hanl n .
Ha e mann, 40 Phil. 796 (1920).

1 0

190 C A A
He f Ped E ca a .C f A ea

There ha ari en here a conf ion in he concep of alidi and he

ef cac of a con rac . Under Ar . 1318 of he Ci il Code, he
e en ial req i i e of a con rac are: con en of he con rac ing
par ie ; objec cer ain hich i he bjec ma er of he con rac and
ca e of he obliga ion hich i e abli hed. Ab en one of he
abo e, no con rac can ari e. Con er el , here all are pre en , he
re l i a alid con rac . Ho e er, ome par ie in rod ce ario
kind of re ric ion or modali ie , he lack of hich ill no ,
ho e er, affec he alidi of he con rac .
In he in an ca e, he Deed of Sale, compl ing a i doe i h
he e en ial req i i e , i a alid one. Ho e er, i did no bear he
amp of appro al of he co r . Thi no i h anding, he con rac
alidi a no affec ed for in he ord of he ip la ion, . . . hi
Con rac of Sale of righ , in ere and par icipa ion ha bec e
effec i e onl pon he appro al b he Honorable Co r . . . In
o her ord , onl he effec i i and no he a idi of he con rac i
affec ed.
Then, oo, pe i ioner are correc in a ing ha he need for
appro al b he proba e co r e i onl here peci c proper ie
of he e a e are old and no hen onl ideal and indi i ible hare
of an heir are di po ed of. 2
In he ca e of Di e a . C f A ea , he Co r declared
ha i i i hin he j ri dic ion of he proba e co r o appro e he
ale of proper ie of a decea2 ed per on b hi pro pec i e heir
before nal adj dica ion. I i e led ha co r appro al i
nece ar for he alidi of an di po i ion of he deceden e a e.
Ho e er, reference o j dicial appro al canno ad er el affec he
b an i e righ of he

________________

2 163 SCRA 30 (Jul 28, 1988).

2 The Court e plained that although the Rules of Court (speci call Sections 4
and 7 of Rule 89) do not speci call state that the sale of an immovable propert
belonging to an estate of a decedent, in a special proceeding, should be made ith the
approval of the court, this authorit is necessaril included in its capacit as a probate
court. Citing Man k Real Inc. . CA, 149 SCRA 174 (April 9, 1983).
 1 1

. 281, C B 23, 1997 191

He f Ped E ca a .C f A ea

heir o di po e of heir ideal 30 hare in he co-heir hip and/or co-

o ner hip among he heir . I m be recalled ha d ring he
period of indi i ion of a deceden e a e, each heir, being a co- 31

o ner, ha f ll o ner hip of hi par and ma herefore aliena e i .

B he effec of he aliena ion i h re pec o he co-o ner hall be
limi ed o he por ion hich ma be allo32ed o him in he di i ion
pon he ermina ion of he co-o ner hip.
From he foregoing, i i clear ha heredi ar righ in an e a e
can be alidl old i ho need of co r appro al and ha hen
pri a e re ponden Cari-an old heir righ , in ere and
par icipa ion in Lo No . 1616 and 1617, he co ld legall ell he
ame i ho he appro al of he proba e co r .
A a general r le, he per inen con rac al ip la ion (req iring
co r appro al) ho ld be con idered a he la be een he par ie .
Ho e er, he pre ence of o fac or mili a e again hi
concl ion. Fir , he e iden in en ion of he par ie appear
33 o be
con rar o he manda or charac er of aid ip la ion. Whoe er
craf ed he doc men of con e ance, m ha e been of he belief
ha he con ro er ial ip la ion a a legal req iremen for he
alidi of he ale. B he con emporaneo and b eq en ac of
he par ie re eal ha he original objec i e of he par ie a o

________________

30 Acebed . Abe ami , 217 SCRA 193 (Januar 18, 1993) citing G Ong . CA,
154 SCRA 276 (September 24, 1987).
31 When there are t o or more heirs, the entire estate of the decedent is o ned in
common b such heirs prior to its partition. Article 1078, Civil Code. J. VITUG,
COMPENDIUM OF CIVIL LAW AND JURISPRUDENCE 452 (1993 edition).
32 Article 493 of the Civil Code, G Ong . CA, a. and Phili ine Na i nal
Bank . CA, 98 SCRA 207 (1980).
33 Article 1370 of the Civil Code provides: If the terms of a contract are clear and
leave no doubt upon the intention of the contracting parties, the literal meaning of its
stipulations shall control. If he d a ea be c n a he e iden in en i n
f he a ie , he la e hall e ail e he f me . (Emphasis added.)

1 2

192 C A A
He f Ped E ca a .C f A ea
34
gi e effec o he deed of ale e en i ho co r appro al. Receip
and accep ance of he n mero in allmen on he balance of he
p rcha e price b he Cari-an and lea ing pe i ioner in po e ion
of Lo No . 1616 and 1617 re eal heir in en ion o effec he m al
 ran mi ion of righ and obliga ion . I a onl af er pri a e
re ponden Cari-an old heir hare in he bjec lo again o he
po e Ch a, in Sep ember 1982, ha he e ame heir led he
ca e a bar for he cancella ion of he Sep ember 1978 con e ance.
Wor h con idering oo i he fac ha al ho gh he period o pa he
balance of he p rcha e price e pired in Ma 1979, he heir
con in ed o accep pa men n il la e 1979 and did no eek
j dicial relief n il la e 1982 or hree ear la er.
Second, e hold ha he req i i e appro al a ir all
rendered impo ible b he Cari-an beca e he35 oppo ed he
mo ion for appro al of he ale led b pe i ioner and ed he
la er for he cancella ion of ha ale. The proba e co r e plained:

(e) While it is true that Escanlar and Holgado led a similar motion for the
appro al of Deed of Sale e ecuted b some of the heirs in their fa or
concerning the one-half (1/2) portions of Lots 1616 and 1617 as earl as
No ember 10, 1981, et the Court could not ha e fa orabl acted upon it,
because there e ists a pending case for the rescission of that contract,
instituted b the endors therein against Pedro Escanlar and Francisco
Holgado and led before another branch of this Court. Until no , this case,
hich attacks the er source of hate er rights or interests Holgado and
Escanlar ma ha e acquired o er one-half (1/2) portions of Lots Nos. 1616
and 1617, is pending resolution b another court. Other ise, if this Court
meddles on these issues raised in that ordinar ci il action seeking for the
rescission of an e isting contract, then, the act of this

_________________

34 I a a , a a
a a a .A 1371, C C .
35 P a a a S 1978 a N 10,
1981. T Ca -a Ja a 5, 1982.

1 3

L. 281, C BE 23, 1997 193

Hei of Ped o E canla . Co of A eal

Court ould 36be totall ineffecti e, as the same ould be in e cess of its
jurisdiction.

Ha ing pro ided he ob acle and he j i ca ion for he ip la ed

appro al o be gran ed, pri a e re ponden Cari-an ho ld no
be allo ed o cancel heir r ran ac ion i h pe i ioner beca e
of lack of appro al b he proba e co r , hich lack i of heir o n
making.
3. Wi h re pec o re ci ion of a ale of real proper , Ar icle
1592 of he Ci il Code go ern :

In the sale of immo able propert , e en though it ma ha e been stipulated

that upon failure to pa the price at the time agreed upon the rescission of
the contract shall of right take place, the vendee may pay, even after the
expiration of the period, as long as no demand for rescission of the contract
has been made upon him either judicially or by a notarial act. After the
demand, the court ma not grant him a ne term. (Italics added)

In he in an ca e, he eller ga e he b er n il Ma 1979 o pa
he balance of he p rcha e price. Af er he la er failed o pa
in allmen d e, he former made no j dicial demand for re ci ion
of he con rac nor did he e ec e an no arial ac demanding he
ame, a req ired nder Ar icle 1592. Con eq en l , he b er
co ld la f ll make pa men e en af er he Ma 1979 deadline, a
in fac he paid e eral in allmen o he eller hich he la er
accep ed. Th , pon he e pira ion of he period o pa , he eller
made no mo e o re cind b con in ed accep ing la e pa men , an
ac hich canno b be con r ed a a ai er of he righ o re cind.
When he eller , in ead of a ailing of heir righ o re cind,
accep ed and recei ed dela ed pa men of in allmen be ond he
period ip la ed, and he

________________

36 E hibit 20-B, Order dated Februar 28, 1985, penned b Judge Bernardo T.
Ponferrada. E hibits, pp. 69-71.

1 4

194 C A A
He f Ped E ca a .C f A ea

b er ere in arrear , he eller in effec 37 ai ed and are no

e opped from e erci ing aid righ o re cind.
4. The ma er of f ll pa men i ano her i e aken p b
pe i ioner . An e ha i e re ie of he record of hi ca e impel
o arri e a a concl ion a ariance i h ha of bo h he rial and
he appella e co r .
The ole i ne in he cancella ion of ale ca e a pri a e
re ponden herein Fredi minda Cari-an B aman e. She ini iall
e i ed ha af er e eral in allmen , he igned a receip for he
f ll pa men of her hare in December 1979 b denied ha ing
ac all recei ed he P5,000.00 in ended o comple e her hare. She
claim ha E canlar and Holgado made her ign he receip la e in
he af ernoon and promi ed o gi e he mone o her he follo ing
morning hen he bank opened. She al o claimed ha hile her
bro her Rodolfo Cari-an hare had alread been f ll paid, her
mo her Genero a Mar ine onl recei ed P28,334.00 and her i er-
in-la Nell Ch a da. de Cari-an recei ed onl P11,334.00.
Fredi minda al o mmed p all he in allmen and came p i h
he o al of P132,551.00 from he long li on a hee of a calendar
hich a ran ferred from a mall bro n no ebook. She la er
admi ed ha her li ma no ha e been comple e for he ga e he
receip for in allmen o pe i ioner E canlar and Holgado. She
h claimed ha he ere defra ded beca e pe i ioner are
eal h and pri a e re ponden are poor.
 Ho e er, de pi e all her claim , Fredi minda e imon fail o
con ince hi Co r ha he ere no f ll compen a ed b
pe i ioner . Fredi minda admi ha her mo her and her i er igned
heir indi 3 id al receip of f ll pa men on heir o n and no in her
pre ence. The receip pre en ed in e idence ho ha Genero a
Mar ine a paid P45,625.00;

________________

37 Angele . Cala an , 135 SCRA 332 (March 18, 1985) also citing De G man .
G ieb, 48 SCRA 68, here the Court held that said right to rescind as forfeited b
the vendors ho received dela ed pa ments ithout protest or quali cation.
3 TSN, June 16, 1989, pp. 4-11.

1 5

. 281, C B 23, 1997 195

He f Ped E ca a .C f A ea

Carmen Cari-an, P45,625.00; Rodolfo Cari-an, P47,500.00 on J ne

21, 1979; Nell Ch a da. de Cari-an, P11,334.00 and he m of 3

P34,218.00 a con igned in co r for he minor Leonell Cari-an.

Fredi minda in i ha he igned a receip for f ll pa men
i ho recei ing he mone herefor and admi ha he did no
objec o he comp a ion. We nd i incredible ha a ma re oman
like Fredi minda Cari-an, o ld ign a receip for mone he did no
recei e. F r hermore, her claim regarding he ac al amo n of he
in allmen paid o her and her kin are q i e ag e and n ppor ed
b compe en e idence. She 40e en admi ha all he receip ere
aken b pe i ioner E canlar. Wor h no ing oo i he ab ence of
ppor ing e imon from her co-heir and ibling Carmen Cari-
an, Rodolfo Cari-an and Nell Ch a da. de Cari-an.
The rial co r rea oned o ha pe i ioner , in con in ing o pa
he ren for he parcel of land he allegedl bo gh , admi no
ha ing f ll paid he Cari-an . Pe i ioner re pon e, ha he paid
ren n il 1986 in compliance i h heir lea e con rac , onl pro e
ha he re pec ed hi con rac and did no ake nd e ad an age of
he heir of Nombre and Cari-an ho bene ed from he lea e.
Moreo er, i i o be re ed ha pe i ioner p rcha ed he
heredi ar hare olel of he Cari-an and no he en ire lo .
The foregoing di c ion inel c abl lead o concl de ha
he Cari-an ere indeed paid he balance of he p rcha e price,
de pi e ha ing accep ed in allmen herefor bela edl . There i h
no gro nd o re cind he con rac of ale beca e of non-pa men .
5. Recapi la ing, e ha e held ha he Sep ember 15, 1978 deed
of ale of righ , in ere and par icipa ion i alid and ha he
eller -pri a e re ponden Cari-an ere f ll paid he con rac
price. Ho e er, i m be empha i ed ha ha a old a onl
he Cari-an heredi ar hare

________________
 3 E hibits 2-6.
40 TSN, June 11, 1986; October 8, 1986, pp. 6-33; August 25, 1986, pp. 5-27.

1 6

196 C A A
He f Ped E ca a .C f A ea

in Lo No . 1616 and 1617 being held i di i b hem and i

h a alid con e ance onl of aid ideal hare . Speci c or
de igna ed por ion of land ere no in ol ed.
Con eq en l , he b eq en ale of 8 parcel of land, incl ding
Lo No . 1616 and 1617, o he po e Ch a i alid e cep o he
e en of ha a old o pe i ioner in he Sep ember 15, 1978
con e ance. I m be no ed ho e er, ha he proba e co r in
Special Proceeding No. 7-7279 de i ed from a arding he
indi id al hare of each heir beca41 e all he proper ie belonging o
he e a e had alread been old. Th i i no cer ain ho m ch
pri a e re ponden Cari-an ere en i led o i h re pec o he o
lo , or if he ere e en going o be a arded hare in aid lo .
The proceeding rro nding he e a e of Nombre and Cari-an
ha ing a ained nali for nearl a decade no , he ame canno be
re-opened. The pro rac ed proceeding hich ha e ndo b edl lef
he proper nder a clo d and he par ie in ol ed in a a e of
ncer ain compel o re ol e i de ni i el .
The deci ion of he proba e co r declare pri a e re ponden
Cari-an a he ole heir b repre en a ion of Vic42 oriana Cari-an ho
a indi p abl en i led o half of he e a e. There being no e ac
appor ionmen of he hare of each heir and no compe en proof
ha he heir recei ed neq al hare in he di po i ion of he e a e,
i can be a med ha he heir of Vic oriana Cari-an collec i el are
en i led o half of each proper in he e a e. More par ic larl ,
pri a e re ponden Cari-an are en i led o half of Lo No . 1616 and
1617, i.e. 14,675 q are me er of Lo No. 1616 and 230,474 q are
me er of Lo No. 1617. Con eq en l , pe i ioner , a heir
cce or -in-in ere , o n aid half of he bjec lo and o gh o
deli er he po e ion of he o her half, a ell a pa ren hereon,
o he pri a e re ponden Ne Sarro a

_______________

41 Cf. Page 6; E hibit 31.

42 The number and identit of the heirs of Guillermo Nombre are not relevant at
this point.

1 7

. 281, C B 23, 1997 197

He f Ped E ca a .C f A ea
Ch a and Paq i o Ch a b onl if he former (pe i ioner ) remained
in po e ion hereof.
The ra e of ren al pa men o be made ere gi en in e idence
b Ne Sarro a Ch a in her nreb ed e imon on J l 24, 1989:
For he hpond (Lo No. 1617) From 1982 p o 1986, ren al
pa men of P3,000.00 per hec are; from 1986-1989 (and cceeding
ear ), ren al pa men of P10,000.00 per hec are. For he riceland
(Lo No. 1616) 15 ca an per hec are per ear; from 1982 o 1986,
P125.00 per ca an; 1987-1988, P175.00
43 per ca an; and 1989 and
cceeding ear , P200.00 per ca an.
WHEREFORE, he pe i ion are hereb GRANTED. The
deci ion of he Co r of Appeal nder re ie i hereb
REVERSED AND SET ASIDE. The ca e i REMANDED o he
Regional Trial Co r of Negro Occiden al, Branch 61 for pe i ioner
and pri a e re ponden Cari-an or heir cce or -in-in ere o
de ermine e ac l hich 1/2 por ion of Lo No . 1616 and 1617 ill
be o ned b each par , a he op ion of pe i ioner . The rial co r i
DIRECTED o order he i ance of he corre ponding cer i ca e
of i le in he name of he re pec i e par ie and o re ol e he ma er
of ren al pa men of he land no deli ered o he Ch a po e
bjec o he ra e peci ed abo e i h legal in ere from da e of
demand.
SO ORDERED.

Me , F a ci c and Pa ga iba , JJ., conc r.

Na a a (C.J., Chai a ), On lea e.

Pe i i g a ed, j dg e e e ed a d e a ide. Ca e
e a ded ia c .

No e . Unila eral cancella ion of a con rac o ell i no

arran ed if he breach i ligh or ca al. (Si ka De e e
C ai . Of ce f he P e ide f he Phi i i e , 231
SCRA 674 [1994])

________________

43 TSN, Jul 24, 1989, pp. 17-18.

198 C A A
T a C ba , I c. .C f A ea

Ar icle 1592 of he Ne Ci il Code, req iring demand b i or b

no arial ac in ca e he endor of real an o re cind doe no
appl o a con rac o ell b onl o a con rac of ale. (Pa gi i a
.C f A ea , 279 SCRA 590 [1997])
 o0o

C g 2023 Ce a B S , I c. A g e e ed.