The Fraternal Order of Utopia

Ateneo de Manila University

Law on Sales
Price

MAPALO v. MAPALO – “deceitful brother / want of delivery / no price” Miguel & Candida Mapalo were
illiterate farmers; they owned a parcel of land. Since Maximo Mapalo was to be married, they donated
to him the eastern half of the land. Maximo, however, deceived them by making them sign an
instrument donating the entire lot. There was a consideration for P 5,000.00 stated in the deed,
but the spouses never received anything. Miguel built a fence to divide the lot and continued to
occupy the western part. Maximo then registered the entire lot and, 13 years thereafter, sold the
same to the Narcisos who took possession only of the eastern half. Later on, the Narcisos sought to
be declared owners of the entire land; the spouses claimed that the sale to the Narcisos was void for
lack of consideration. The CA declared that the sale was merely voidable and the action by the
spouses was barred by prescription, being filed after 4 years from the discovery of the fraud.

Consideration was totally absent; the P 5,000.00 was never delivered to the spouses. Thus, the
sale to the Narcisos was void ab initio for want of consideration. The inexistence of the
contract is permanent and cannot be the subject of prescription. The Narcisos are also in bad
faith – they had knowledge of the true nature and extent of Maximo’s right over the lot.

MATE v. CA – “accommodation / swindle / interest as price” Josefina approached Fernando asking for
help. Her family was to be sued by Tan for issuing rubber checks; thus she asked him to cede his 3
lots to Tan and it will be Josefina who will re-purchase them for him. He initially rejected her. Then

Darvin’s Digests
Josefina issued him 2 checks, one for P 1.4 million, pertaining to the value of the lot, and a check for
P 420,000.00 corresponding to interest for 6 months. He agreed, drafted the instrument himself,
and ceded his properties to Tan. Later, both checks bounced; he sued Tan for annulment of the sale
for lack of consideration since he never received anything. He also sued Josefina criminally, but the
latter absconded. The sale was valid; there was a consideration in the form of the check for P
420,000.00. It was his fee for executing the sale. It was not only kindness that impelled him to
cede his properties, it was also his interest for profit.

That he never received the money is of no moment; a sale is a consensual contract. He also tacitly

Darvin’s Digests
admitted to the sale when he filed criminal charges against Josefina. Fernando, being a lawyer, has
no one else to blame but himself for his loss. He acted negligently out of desire for profit.

ONG v. ONG – “one peso plus other valuable considerations” For and in consideration of one peso
and other valuable considerations, Imelda Ong transferred (through a Deed of Quitclaim) her rights
over a ½ portion of a parcel of land to Sandra. Later on, she revoked the Deed and donated the
whole property to her son, Rex. Sandra, through her guardian, sought to recover ownership and
possession thereof; Imelda alleged that the sale was void for lack of consideration. The sale was
valid; there was a consideration. The apparent inadequacy is of no moment since the usual
practice in deeds of conveyance is to place a nominal amount although there is more valuable
consideration given. Consideration is presumed to exist. He who alleges otherwise assumes the
burden of proof. The one peso was not the consideration, but rather the other valuable
considerations.

BAGNAS v. CA – “one peso plus services” Hilario died w/ no will and was survived only by collateral
relatives. Bagnas (et al) were the nearest of kin. Retonil (et al) were also relatives but to a farther
extent. They claimed ownership over 10 lots from the estate of Hilario presenting notarized and
registered Deeds of Sale (in Tagalog) where the consideration for the lands was one peso and
services rendered, being rendered, and to be rendered. Bagnas argued that the sales were
fictitious. Retonil claimed to have done many things for Hilario – such as nursing him on his deathbed.
At the onset, if a contract has no consideration, it is not merely voidable; it is completely void
– and even collateral heirs may assail the contract. In this case, there was no consideration.
Price must be in money or its equivalent; services are not the equivalent of money insofar as
the requirement of price is concerned. A contract is not one for sale if the consideration
consists of services. Not only are they vague, they are unknown and not susceptible of
determination w/o a new agreement between the parties.

SERVICE                     SACRIFICE                EXCELLENCE
 The Fraternal Order of Utopia
Ateneo de Manila University
School of Law

REPUBLIC v. PHIL. RESOURCES DEV’T CORP. – “payment in goods” The Republic brought an action
against Apostol for the collection of sums owing to it for his purchase of Palawan Almaciga and other
logs. His total debt amounted to some P 34,000.00. Philippine Resources Development Corp.
(PRDC) intervened claiming that Apostol, as president of the company, w/o prior authority, took
goods (steel sheets, pipes, bars, etc.) from the PRDC warehouse and appropriated them to settle his
personal debts in favor of the government. The Republic opposed the intervention of PRDC, arguing
that price is always paid in money and that payment in kind is no payment at all; hence money and
not the goods of PRDC are under dispute. Price may be paid in money or its equivalent – in this
case the goods. Payment need not be in the form of money. In this case, the prices for the
said goods have, in fact, been assessed and determined. PRDC thus, has a substantial interest in
the case and must be permitted to intervene – its goods paid out w/o authority being under dispute in
this case.

VELASCO v. CA – “terms of payment” Velasco, and his sister-in-law, were leasing Lot 15 from
Magdalena Estates. They offered to buy that property from Magdalena for P 100,000.00. They paid P
10,000.00 of the initial payment of P 20,000.00. Magdalena accepted the same as a mere deposit
and issued them a receipt therefor. The receipt had a notation stating “Agreed price: P 100,000.00,
P 30,000.00 down payment, balance in 10 years.” None of the later installments were paid within
reasonable time; Magdalena then refused to accept the P 20,000.00 later on tendered by the
Velascos. The Velascos thus filed a case for specific performance to compel Magdalena to execute
the sale; the latter objects. There was no perfected contract of sale because the terms of
payment have not been agreed upon. There has yet to be a meeting of the minds as to the
manner of paying the down payment, and more so, the installments. The receipt indicating a P
10,000.00 down payment is not sufficient proof of the perfection of the sale.

SERVICE                     SACRIFICE                EXCELLENCE