G.R. No. 166790. November 19, 2014.

*

JUAN P. CABRERA, petitioner, vs. HENRY YSAAC,
respondent.

Remedial Law; Civil Procedure; Courts; Supreme Court; The

Supreme Court (SC) is clothed with ample authority to review
matters, even if they are not assigned as errors in their appeal, if it
finds that their consideration is necessary to arrive at a just
decision of the case.This court is clothed with ample authority
to review matters, even if they are not assigned as errors in their
appeal, if it finds that their consideration is necessary to arrive at
a just decision of the case. We can consider errors not raised by
the parties, more so if these errors were raised by respondent.
Respondent raised different issues compared with those raised by
petitioner. However, the assignment of error of respondent was
still responsive to the main argument of petitioner. Petitioners
argument works on the premise that there was a valid contract.
By attacking the validity of the contract, respondent was merely
responding to the premise of petitioners main argument. The
issue is relevant to the final disposition of this case; hence, it
should be considered by this court in arriving at a decision.
Civil Law; Contracts; Contract of Sale; A contract of sale is
perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price; The thing to
be

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* SECOND DIVISION.

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Cabrera vs. Ysaac

 sold is the object of the contract, while the price is the cause or
consideration.We find that there was no contract of sale. It was
null ab initio. As defined by the Civil Code, [a] contract is a
meeting of minds between two persons whereby one binds
himself, with respect to the other, to give something or to render
some service. For there to be a valid contract, there must be
consent of the contracting parties, an object certain which is the
subject matter of the contract, and cause of the obligation which is
established. Sale is a special contract. The seller obligates himself
to deliver a determinate thing and to transfer its ownership to the
buyer. In turn, the buyer pays for a price certain in money or its
equivalent. A contract of sale is perfected at the moment there is
a meeting of minds upon the thing which is the object of the
contract and upon the price. The seller and buyer must agree as
to the certain thing that will be subject of the sale as well as the
price in which the thing will be sold. The thing to be sold is the
object of the contract, while the price is the cause or consideration.
The object of a valid sales contract must be owned by the seller. If
the seller is not the owner, the seller must be authorized by the
owner to sell the object.
Same; Same; Same; CoOwnership; Sale of a portion of the
property is considered an alteration of the thing owned in common.
Under the Civil Code, such disposition requires the unanimous
consent of the other coowners.Specific rules attach when the
seller coowns the object of the contract. Sale of a portion of the
property is considered an alteration of the thing owned in
common. Under the Civil Code, such disposition requires the
unanimous consent of the other coowners. However, the rules
also allow a coowner to alienate his or her part in the co
ownership. These two rules are reconciled through jurisprudence.
If the alienation precedes the partition, the coowner cannot sell a
definite portion of the land without consent from his or her co
owners. He or she could only sell the undivided interest of the co
owned property. As summarized in Lopez v. Ilustre, 5 Phil. 567
(1906), [i]f he is the owner of an undivided half of a tract of land,
he has a right to sell and convey an undivided half, but he has no
right to divide the lot into two parts, and convey the whole of one
part by metes and bounds. The undivided interest of a coowner
is also referred to as the ideal or abstract quota or
proportionate share. On the other hand, the definite portion of
the land refers to specific metes and bounds of a coowned
property.

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614 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac


Same; Same; Same; Same; Prior to partition, a sale of a

definite portion of common property requires the consent of all co
owners because it operates to partition the land with respect to the
coowner selling his or her share.Prior to partition, a sale of a
definite portion of common property requires the consent of all co
owners because it operates to partition the land with respect to
the coowner selling his or her share. The coowner or seller is
already marking which portion should redound to his or her
autonomous ownership upon future partition. The object of the
sales contract between petitioner and respondent was a definite
portion of a coowned parcel of land. At the time of the alleged
sale between petitioner and respondent, the entire property was
still held in common. This is evidenced by the original certificate
of title, which was under the names of Matilde Ysaac, Priscilla
Ysaac, Walter Ysaac, respondent Henry Ysaac, Elizabeth Ysaac,
Norma Ysaac, Luis Ysaac, Jr., George Ysaac, Franklin Ysaac,
Marison Ysaac, Helen Ysaac, Erlinda Ysaac, and Maridel Ysaac.
Same; Same; Contract to Sell; CoOwnership; A coowner
could enter into a contract to sell a definite portion of the property.
At best, the agreement between petitioner and respondent is a
contract to sell, not a contract of sale. A contract to sell is a
promise to sell an object, subject to suspensive conditions.
Without the fulfillment of these suspensive conditions, the sale
does not operate to determine the obligation of the seller to
deliver the object. A coowner could enter into a contract to sell a
definite portion of the property. However, such contract is still
subject to the suspensive condition of the partition of the
property, and that the other coowners agree that the part subject
of the contract to sell vests in favor of the coowners buyer.
Hence, the coowners consent is an important factor for the sale
to ripen.
Same; Obligations; Reciprocal Obligations; Rescission;
Generally, the power to rescind obligations is implied in reciprocal
ones, in case one of the obligors should not comply with what is
incumbent on him.Generally, [t]he power to rescind obligations
is implied in reciprocal ones, in case one of the obligors should not
comply with what is incumbent on him. For the sale of
immovable property, the following provision governs its
rescission: Article 1592. In the sale of immovable property, even
though it may have been stipulated that upon failure to pay the
price at the time agreed upon the rescission

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Cabrera vs. Ysaac

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 notarial act. After the demand, the court may not
grant him a new term. This provision contemplates (1) a contract
of sale of an immovable property and (2) a stipulation in the
contract that failure to pay the price at the time agreed upon will
cause the rescission of the contract. The vendee or the buyer can
still pay even after the time agreed upon, if the agreement
between the parties has these requisites. This right of the vendee
to pay ceases when the vendor or the seller demands the
rescission of the contract judicially or extrajudicially. In case of an
extrajudicial demand to rescind the contract, it should be
notarized.
Same; Contracts; Contract to Sell; A contract to sell is where
the ownership or title is retained by the seller and is not to pass
until the full payment of the price, such payment being a positive
suspensive condition and failure of which is not a breach, casual
or serious, but simply an event that prevented the obligation of the
vendor to convey title from acquiring binding force.A contract
to sell is where the ownership or title is retained by the seller
and is not to pass until the full payment of the price, such
payment being a positive suspensive condition and failure of
which is not a breach, casual or serious, but simply an event that
prevented the obligation of the vendor to convey title from
acquiring binding force.
Same; Same; Same; Rescission; The law does not prescribe a
form to rescind a contract to sell immovable property; The law does
not require notarization for a letter to rescind a contract to sell
immovable property. Notarization is only required if a contract of
sale is being rescinded.The law does not prescribe a form to
rescind a contract to sell immovable property. In Manuel v.
Rodriguez, 109 Phil. 1 (1960), the nonpayment operated to cancel
the contract. If mere nonpayment is enough to cancel a contract to
sell, the letter given to petitioners lawyer is also an acceptable
form of rescinding the contract. The law does not require
notarization for a letter to rescind a contract to sell immovable
property. Notarization is only required if a contract of sale is
being rescinded.
PETITION for review on certiorari of the decision and
resolution of the Court of Appeals.

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616 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac

The facts are stated in the opinion of the Court.

Romeo A. Tablizo for petitioner.
Luis Ruben General for respondent.

LEONEN, J.:

Unless all the coowners have agreed to partition their
property, none of them may sell a definite portion of the
land. The coowner may only sell his or her proportionate
interest in the coownership. A contract of sale which
purports to sell a specific or definite portion of
unpartitioned land is null and void ab initio.
In this petition for review on certiorari,1 Juan P.
Cabrera assails the Court of Appeals decision dated June
19, 20032 and resolution dated January 3, 2005.3 These
decisions ruled that a specific performance to execute a
deed of sale over a parcel of land is not available as a relief
for Juan Cabrera.
It appears that the heirs of Luis and Matilde Ysaac co
owned a 5,517squaremeter parcel of land located in
Sabang, Naga City, covered by Original Certificate of Title
(OCT) No. 506.4 One of the coowners is respondent, Henry
Ysaac.

_______________

1 Rollo, pp. 1022.

2 Cabrera v. Ysaac, docketed as C.A.G.R. CV No. 65869 and decided
by the Court of Appeals Eighth Division. The decision was penned by
Associate Justice Rosmari D. Carandang, with Associate Justices Conrado
M. Vasquez, Jr. and Mercedes GozoDadole, concurring.
3 Resolved by the Court of Appeals Special Former Eighth Division.
The resolution was penned by Associate Justice Rosmari D. Carandang,
with Associate Justices Conrado M. Vasquez, Jr. and Rodrigo Cosico,
concurring.
4 Rollo, pp. 8081.
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Cabrera vs. Ysaac

Henry Ysaac leased out portions of the property to
several lessees. Juan Cabrera, one of the lessees, leased a
95squaremeter portion of the land beginning in 1986.5
On May 6, 1990, Henry Ysaac needed money and offered
to sell the 95squaremeter piece of land to Juan Cabrera.6
He told Henry Ysaac that the land was too small for his
needs because there was no parking space for his vehicle.7
In order to address Juan Cabreras concerns, Henry
Ysaac expanded his offer to include the two adjoining lands
that Henry Ysaac was then leasing to the Borbe family and
the Espiritu family. Those three parcels of land have a
combined area of 439 square meters. However, Henry
Ysaac warned Juan Cabrera that the sale for those two
parcels could only proceed if the two families agree to it.
Juan Cabrera accepted the new offer. Henry Ysaac and
Juan Cabrera settled on the price of P250.00 per square
meter, but Juan Cabrera stated that he could only pay in
full after his retirement on June 15, 1992.8 Henry Ysaac
agreed but demanded for an initial payment of P1,500.00,
which Juan Cabrera paid.9
According to Juan Cabrera, Henry Ysaac informed him
that the Borbe family and the Espiritu family were no
longer interested in purchasing the properties they were
leasing. Since Mamerta Espiritu of the Espiritu family
initially considered purchasing the property and had made
an initial deposit for it, Juan Cabrera agreed to reimburse
this earlier payment. On June 9, 1990, Juan Cabrera paid
the amount of P6,100.00.10 Henry Ysaac issued a receipt for
this amount. P3,100.00 of the amount paid was reimbursed
to Mamerta

_______________

5 Id., at p. 58.
6 Id.
7 Id., at p. 38.
8 Id.
9 Id.
10 Id.

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618 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac

Espiritu and, in turn, she gave Juan Cabrera the
receipts issued to her by Henry Ysaac.11
On June 15, 1992, Juan Cabrera tried to pay the balance
of the purchase price to Henry Ysaac. However, at that
time, Henry Ysaac was in the United States. The only
person in Henry Ysaacs residence was his wife. The wife
refused to accept Juan Cabreras payment.12
Sometime in September 1993, Juan Cabrera alleged that
Henry Ysaac approached him, requesting to reduce the
area of the land subject of their transaction. Part of the
439squaremeter land was going to be made into a
barangay walkway, and another part was being occupied
by a family that was difficult to eject.13 Juan Cabrera
agreed to the proposal. The land was surveyed again.
According to Juan Cabrera, Henry Ysaac agreed to
shoulder the costs of the resurvey, which Juan Cabrera
advanced in the amount of P3,000.00.
The resurvey shows that the area now covered by the
transaction was 321 square meters.14 Juan Cabrera
intended to show the sketch plan and pay the amount due
for the payment of the lot. However, on that day, Henry
Ysaac was in Manila. Once more, Henry Ysaacs wife
refused to receive the payment because of lack of authority
from her husband.15
On September 21, 1994, Henry Ysaacs counsel, Atty.
Luis Ruben General, wrote a letter addressed to Atty.
Leoncio Clemente, Juan Cabreras counsel.16 Atty. General
informed Atty. Clemente that his client is formally
rescinding the contract of sale because Juan Cabrera failed
to pay the balance of the purchase price of the land
between May 1990 and May

_______________

11 Id.
12 Id.
13 Id., at p. 16.
14 Id.
15 Id., at p. 39.
 16 Id., at p. 40.

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Cabrera vs. Ysaac

1992. The letter also stated that Juan Cabreras initial
payment of P1,500.00 and the subsequent payment of
P6,100.00 were going to be applied as payment for overdue
rent of the parcel of land Juan Cabrera was leasing from
Henry Ysaac.17 The letter also denied the allegation of
Juan Cabrera that Henry Ysaac agreed to shoulder the
costs of the resurveying of the property.18
Juan Cabrera, together with his uncle, Delfin Cabrera,
went to Henry Ysaacs house on September 16, 1995 to
settle the matter.19 Henry Ysaac told Juan Cabrera that he
could no longer sell the property because the new
administrator of the property was his brother, Franklin
Ysaac.20
Due to Juan Cabreras inability to enforce the contract of
sale between him and Henry Ysaac, he decided to file a
civil case for specific performance on September 20, 1995.21
Juan Cabrera prayed for the execution of a formal deed of
sale and for the transfer of the title of the property in his
name.22 He tendered the sum of P69,650.00 to the clerk of
court as payment of the remaining balance of the original
sale price.23 On September 22, 1995, a notice of lis pendens
was annotated on OCT No. 560.24
In his answer with counterclaim,25 Henry Ysaac prayed
for the dismissal of Juan Cabreras complaint.26 He also
prayed

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17 Id., at p. 108.
18 Id., at p. 40.
19 Id., at p. 39.
20 Id.
21 Id., at pp. 2428. The case was docketed as Civil Case No.
953443 in the Regional Trial Court, Fifth Judicial Region, Branch 24 of
Naga City.
22 Id., at p. 28.
23 Id., at p. 39
24 Id., at p. 81.
25 Id., at pp. 2934.
 26 Id., at p. 33.

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620 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac

for compensation in the form of moral damages,
attorneys fees, and incidental litigation expenses.27
Before the Regional Trial Court decided the case, the
heirs of Luis and Matilde Ysaac, under the administration
of Franklin Ysaac, sold their property to the local
government of Naga City on February 12, 1997.28 The
property was turned into a project for the urban poor of the
city.29
During the trial, Corazon Borbe Combe of the Borbe
family testified that contrary to what Juan Cabrera
claimed, her family never agreed to sell the land they were
formerly leasing from Henry Ysaac in favor of Juan
Cabrera.30 The Borbe family bought the property from
Naga Citys urban poor program after the sale between the
Ysaacs and the local government of Naga City.31
On September 22, 1999, the Regional Trial Court of
Naga City ruled that the contract of sale between Juan
Cabrera and Henry Ysaac was duly rescinded when the
former failed to pay the balance of the purchase price in the
period agreed upon.32 The Regional Trial Court found that
there was an agreement between Juan Cabrera and Henry
Ysaac as to the sale of land and the corresponding unit
price.33 However, aside from the receipts turned over by
Mamerta Espiritu of the Espiritu family to Juan Cabrera,
there was no evidence that the other adjoining lot
occupants agreed to sell their respective landholdings to
Juan Cabrera.34 The Regional Trial Court also doubted
that Juan Cabrera was willing and able to

_______________

27 Id., at pp. 2934.

28 Id., at p. 40.
29 Id.
30 Id.
31 Id.
32 Id., at pp. 3742. The decision dated September 22, 1999 was
rendered by Judge Corazon A. Tordilla.
33 Id., at p. 40.
 34 Id., at p. 41.

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pay Henry Ysaac on June 15, 1992. According to the
trial court:

[A]fter the said refusal of Henry Ysaacs wife, plaintiff [Juan

Cabrera] did not bother to write to the defendant [Henry Ysaac]
or to any of the coowners his intention to pay for the land or he
could have consigned the amount in court at the same time
notifying [Henry Ysaac] of the consignation in accordance with
Article 1256 of the Civil Code. Furthermore, in September, 1993
[Juan Cabrera] was able to meet [Henry Ysaac] when the latter
allegedly talked to him about the reduction of the area he was
going to buy. There is no showing that [Juan Cabrera] again
tendered his payment to Henry Ysaac. Instead, he allegedly made
his offer after he had the land resurveyed but defendant was then
in Manila. There is no evidence as to what date this offer was
made. . .
. . . [T]he court does not see any serious demand made for
performance of the contract on the part of [Juan Cabrera] in 1992
when he allegedly promised to pay the balance of the purchase
price. Neither could he demand for the sale of the adjoining lots
because the occupants thereof did not manifest their consent
thereto. At the most, he could have demanded the sale of the lot
which he was occupying. If his payment was refused in 1995, he
cannot demand for damages because the rescission of the contract
was relayed to him in writing in Exhibit 4.35

The Regional Trial Court dismissed Juan Cabreras
complaint and Henry Ysaacs counterclaim.36 Juan Cabrera
appealed the Regional Trial Courts decision.37
The Court of Appeals agreed with the Regional Trial
Court that there was a perfected contract of sale between
Juan Cabrera and Henry Ysaac.38 According to the Court of
Ap

_______________

35 Id.
36 Id., at p. 42.
 37 Id., at p. 43.
38 Id., at p. 60.

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622 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac

peals, even if the subject of the sale is part of Henry
Ysaacs undivided property, a coowner may sell a definite
portion of the property.39
The Court of Appeals also ruled that the contract of sale
between Juan Cabrera and Henry Ysaac was not validly
rescinded.40 For the rescission to be valid under Article
1592 of the Civil Code, it should have been done through a
judicial or notarial act and not merely through a letter.41
However, due to the sale of the entire property of the
Ysaac family in favor of the local government of Naga City,
the Court of Appeals ruled that the verbal contract between
Juan Cabrera and Henry Ysaac cannot be subject to the
remedy of specific performance.42 The local government of
Naga City was an innocent purchaser for value, and
following the rules on double sales, it had a preferential
right since the sale it entered into was in a public
instrument, while the one with Juan Cabrera was only
made orally.43 The only recourse the Court of Appeals could
do is to order Henry Ysaac to return the initial payment of
the purchase price of P10,600.00 (P1,500.00 and P6,100.00
as evidenced by the receipts issued by Henry Ysaac to Juan
Cabrera, and P3,000.00 for the surveying expenses) as
payment of actual damages. The Court of Appeals likewise
awarded attorneys fees and litigation costs. To wit:

WHEREFORE, premises considered, the assailed decision of

the lower court is hereby SET ASIDE and a new one is entered as
follows:
1. Declaring that there is no valid rescission of the contract of
sale of the subject lot between plaintiffappellant [Juan P.
Cabrera] and defendantappellee

_______________

39 Id., at pp. 6061.

40 Id., at p. 61.
41 Id.
42 Id., at pp. 6162.
 43 Id., at p. 62.

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Cabrera vs. Ysaac

[Henry Ysaac]; however, specific performance is not an available

relief to plaintiff because of the supervening sale of the property
to the City of Naga, an innocent purchaser and for value;
2. Ordering [Henry Ysaac] to pay [Juan P. Cabrera] actual
damages in the amount of P10,600.00, with
legal interest of 12% per annum from September 20, 1995 until
paid; and
3. Ordering [Henry Ysaac] to pay [Juan P. Cabrera], the
amount of thirty thousand pesos (P30,000.00) by way of attorneys
fees and litigation expenses.

Henry Ysaac filed his motion for reconsideration dated
July 14, 2003 of the decision of the Court of Appeals.44 On
the other hand, Juan Cabrera immediately filed a petition
for review on certiorari with this court.45 In the resolution
dated October 15, 2003, this court denied the petition for
being premature since respondents motion for
reconsideration of the questioned decision of the Court of
Appeals is still pending resolution.46
In the resolution dated January 3, 2005, the Court of
Appeals denied Henry Ysaacs motion for reconsideration.
On February 24, 2005, Juan Cabrera filed another petition
with this court, questioning the propriety of the Court of
Appeals decision and resolution.
This court initially noted that the petition was filed out
of time. The stamp on the petition states that it was
received by this court on March 24, 2005,47 while the
reglementary period to file the petition expired on
February 28, 2005. Thus, the petition was dismissed in this
courts resolution dated April 27, 2005.48 Petitioner filed a
motion for reconsideration.49 How

_______________

44 Id., at pp. 6575.

45 The petition was docketed as G.R. No. 159094.
46 Rollo, p. 76.
 47 Id., at p. 10.
48 Id., at p. 84.
49 Id., at pp. 8590.

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624 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac

ever, the same was denied with finality in this courts
resolution dated August 17, 2005.50
In a letter addressed to the Chief Justice, petitioner
argued that it would be unfair to him if a clerical error
would deprive his petition from being judged on the merits.
Petitioner emphasized that the registry receipts show that
he filed the petition on February 24, 2005, not March 24,
2005, as noted by this court in his pleading.51 This court
treated the letter as a second motion for reconsideration. In
the resolution dated March 31, 2006, this court found merit
in petitioners letter.52 The petition was reinstated, and
respondent was ordered to file his comment.53 Respondent
filed his comment on September 18, 2006.54 This court
required petitioner to file a reply,55 which petitioner
complied with on January 15, 2007.56
The issues raised by petitioner and respondent are
summarized as follows:
1. Whether this court could take cognizance of issues not
raised by petitioner but by respondent in his comment to
the petition for review;
2. Whether there was a valid contract of sale between
petitioner and respondent;
3. Whether the contract of sale still subsisted;
a. Whether the contract was terminated through
rescission;
b. Whether the contract was no longer enforceable due to
the supervening sale of the property to the local
government of Naga City;

_______________

50 Id., at p. 92.
51 Id., at pp. 8283.
52 Id., at pp. 101103.
53 Id., at p. 103.
54 Id., at pp. 106124.
55 Id., at p. 126.
 56 Id., at pp. 135137.

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4. Whether petitioner is entitled to the execution of a
deed of sale in his favor; and
5. Whether petitioner is entitled to actual damages,
attorneys fees, and costs of litigation.
The petition should be denied.

I

This court can resolve issues raised by both parties

Petitioner stated that the errors in this case are: (1) the
[Court of Appeals] erred in holding that the relief of specific
performance is not available to [petitioner] supposedly
because of the supervening sale of [the] property to the City
Government of Naga;57 and (2) consequently, the [Court
of Appeals] erred in not ordering the execution of the
necessary deed of sale in favor of [petitioner].58 Petitioner
argues that this court should limit its adjudication to these
two errors.59
On the other hand, respondent raised issues on the
validity of the contract of sale in favor of petitioner, and the
propriety of the award of actual damages with interest,
attorneys fees, and litigation expenses.60
For petitioner, if respondent wanted to raise issues
regarding the Court of Appeals decision, respondent should
have interposed a separate appeal.61
Petitioners position is erroneous. This court can resolve
issues and assignments of error argued by petitioner and
respondent.

_______________

57 Id., at p. 18.
58 Id.
59 Id., at pp. 136137.
60 Id., at pp. 111122.
61 Id., at p. 136.

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626 SUPREME COURT REPORTS ANNOTATED
Cabrera vs. Ysaac

This court is clothed with ample authority to review
matters, even if they are not assigned as errors in their
appeal, if it finds that their consideration is necessary to
arrive at a just decision of the case.62 We can consider
errors not raised by the parties, more so if these errors
were raised by respondent.
Respondent raised different issues compared with those
raised by petitioner. However, the assignment of error of
respondent was still responsive to the main argument of
petitioner. Petitioners argument works on the premise that
there was a valid contract. By attacking the validity of the
contract, respondent was merely responding to the premise
of petitioners main argument. The issue is relevant to the
final disposition of this case; hence, it should be considered
by this court in arriving at a decision.

II

There was no valid contract of sale between
petitioner and respondent

Petitioner agrees with the decision of the Court of
Appeals that there was a perfected contract of sale between
him and respondent.63
Respondent, however, argues that there was no contract
between him and petitioner because under Article 1475 of
the Civil Code, there has to be a meeting of the minds as to
the price and the object of the contract.64 Respondent
argues that

_______________

62 Globe Telecom, Inc. v. FlorendoFlores, 438 Phil. 756, 764; 390

SCRA 201, 209 (2002) [Per J. Bellosillo, Second Division], citing Barons
Marketing Corp. v. Court of Appeals, 349 Phil. 966; 286 SCRA 96 (1998)
[Per J. Puno, Second Division]. (Emphasis supplied)
63 Rollo, p. 18.
64 Id., at p. 112.

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 Cabrera vs. Ysaac

there was no meeting of the minds as to the final price65
and size66 of the property subject of the sale.
In addition, while respondent admits that he was willing
to sell the property being leased from him by the Borbe
family and the Espiritu family, petitioner presented no
evidence to show that these families agreed to the sale in
favor of petitioner. During trial, Corazon Borbe Combe of
the Borbe family testified that her family never agreed to
allow the sale of the property in favor of petitioner.67
Respondent likewise alleged that Mamerta Espiritu of the
Espiritu family eventually bought the property occupied by
her family, which is contrary to the claim that petitioner
obtained the consent of Mamerta Espiritu to have the land
sold in his favor.68
Petitioner replied that respondent sold 113 square
meters of the 321squaremeter property to the Espiritu
family on January 17, 1996.69 Petitioner argued that
Mamerta Espiritu was not a buyer in good faith because in
1990, she voluntarily agreed to surrender the lot for sale in
favor of petitioner because she did not have the money to
pay for the lot. Hence, the sale in favor of Mamerta
Espiritu should not supersede the sale in favor of
petitioner.70
The Regional Trial Court ruled that there was a valid
contract of sale, although it found that there was no
evidence to support petitioners claim that he was able to
secure the consent of the Espiritu family and the Borbe
family to the sale of the land.71 There was a valid contract
of sale subject to a suspensive condition, but the suspensive
condition was not complied with.

_______________

65 Id., at pp. 112113.

66 Id., at p. 114.
67 Id., at pp. 3940.
68 Id., at pp. 113114.
69 Id., at pp. 2021.
70 Id.
71 Id., at pp. 4041.

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628 SUPREME COURT REPORTS ANNOTATED

 Cabrera vs. Ysaac

For the Court of Appeals, there was a valid contract of
sale.72 The Court of Appeals ruling was based on the idea
that a coowner could sell a definite portion of the land
owned in common, and not because the suspensive
conditions of the contract were complied with. In ruling
this way, the Court of Appeals relied on Pamplona v.
Morato,73 which stated that:

. . .[A] coowner may validly sell his undivided share of the

property owned in common. (If the part sold happens to be his
allotted share after partition, the transaction is entirely valid.)
Now then if there has been no express partition as yet, but the co
owner who sells points out to his buyers the boundaries of the
part he was selling, and the other coowners make no objection,
there is in effect already a partial partition, and the sale of the
definite portion can no longer be assailed.74

We find that there was no contract of sale. It was null ab
initio.
As defined by the Civil Code, [a] contract is a meeting of
minds between two persons whereby one binds himself,
with respect to the other, to give something or to render
some service.75 For there to be a valid contract, there must
be consent of the contracting parties, an object certain
which is the subject matter of the contract, and cause of the
obligation which is established.76
Sale is a special contract. The seller obligates himself to
deliver a determinate thing and to transfer its ownership to
the buyer. In turn, the buyer pays for a price certain in
money or

_______________

72 Id., at p. 60.
73 185 Phil. 556; 96 SCRA 775 (1980) [Per J. Guerrero, First Division].
74 The Court of Appeals decision did not cite directly from the
Pamplona case. Instead, it lifted the digest in E. Paras, Civil Code of the
Philippines Annotated, Vol. II, p. 351, 15th ed. (2002).
75 Civil Code, Art. 1305.
76 Civil Code, Art. 1318.

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 Cabrera vs. Ysaac

its equivalent.77 A contract of sale is perfected at the
moment there is a meeting of minds upon the thing which
is the object of the contract and upon the price.78 The
seller and buyer must agree as to the certain thing that
will be subject of the sale as well as the price in which the
thing will be sold. The thing to be sold is the object of the
contract, while the price is the cause or consideration.
The object of a valid sales contract must be owned by the
seller. If the seller is not the owner, the seller must be
authorized by the owner to sell the object.79
Specific rules attach when the seller coowns the object
of the contract. Sale of a portion of the property is
considered an alteration of the thing owned in common.
Under the Civil Code, such disposition requires the
unanimous consent of the other coowners.80 However, the
rules also allow a coowner to alienate his or her part in the
coownership.81
These two rules are reconciled through jurisprudence.
If the alienation precedes the partition, the coowner
cannot sell a definite portion of the land without consent
from his or her coowners. He or she could only sell the
undivided interest of the coowned property.82 As
summarized in Lopez v. Ilustre,83 [i]f he is the owner of an
undivided half of a tract of land, he has a right to sell and
convey an undivided half, but

_______________

77 Civil Code, Art. 1318.

78 Civil Code, Art. 1475.
79 Francisco v. Chemical Bulk Carriers, Inc., G.R. No. 193577,
September 7, 2011, 657 SCRA 355, 365 [Per J. Carpio, Second Division].
80 Civil Code, Art. 491.
81 Civil Code, Art. 493.
82 Oliveras v. Lopez, 250 Phil. 430, 435436; 168 SCRA 431, 437 (1988)
[Per CJ. Fernan, Third Division].
83 5 Phil. 567 (1906) [Per J. Willard, En Banc].

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630 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac


he has no right to divide the lot into two parts, and
convey the whole of one part by metes and bounds.84
The undivided interest of a coowner is also referred to
as the ideal or abstract quota or proportionate share.
On the other hand, the definite portion of the land refers to
specific metes and bounds of a coowned property.
To illustrate, if a tenhectare property is owned equally
by ten coowners, the undivided interest of a coowner is
one hectare. The definite portion of that interest is usually
determined during judicial or extrajudicial partition. After
partition, a definite portion of the property held in common
is allocated to a specific coowner. The coownership is
dissolved and, in effect, each of the former coowners is free
to exercise autonomously the rights attached to his or her
ownership over the definite portion of the land. It is crucial
that the coowners agree to which portion of the land goes
to whom.
Hence, prior to partition, a sale of a definite portion of
common property requires the consent of all coowners
because it operates to partition the land with respect to the
coowner selling his or her share. The coowner or seller is
already marking which portion should redound to his or
her autonomous ownership upon future partition.
The object of the sales contract between petitioner and
respondent was a definite portion of a coowned parcel of
land. At the time of the alleged sale between petitioner and
respondent, the entire property was still held in common.
This is evidenced by the original certificate of title, which
was under the names of Matilde Ysaac, Priscilla Ysaac,
Walter Ysaac, respondent Henry Ysaac, Elizabeth Ysaac,
Norma Ysaac, Luis Ysaac, Jr., George Ysaac, Franklin
Ysaac, Marison Ysaac, Helen Ysaac, Erlinda Ysaac, and
Maridel Ysaac.85

_______________

84 Id., at pp. 568569.

85 Rollo, p. 80 (front and back).

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 The rules allow respondent to sell his undivided interest
in the coownership. However, this was not the object of the
sale between him and petitioner. The object of the sale was
a definite portion. Even if it was respondent who was
benefiting from the fruits of the lease contract to petitioner,
respondent has no right to sell or alienate a concrete,
specific or determinate part of the thing owned in common,
because his right over the thing is represented by quota or
ideal portion without any physical adjudication.86
There was no showing that respondent was authorized
by his coowners to sell the portion of land occupied by
Juan Cabrera, the Espiritu family, or the Borbe family.
Without the consent of his coowners, respondent could not
sell a definite portion of the coowned property.
Respondent had no right to define a 95squaremeter
parcel of land, a 439squaremeter parcel of land, or a 321
squaremeter parcel of land for purposes of selling to
petitioner. The determination of those metes and bounds
are not binding to the coownership and, hence, cannot be
subject to sale, unless consented to by all the coowners.
In finding that there was a valid contract of sale
between petitioner and respondent, the Court of Appeals
erred in the application of Pamplona v. Moreto.87 The
ruling in Pamplona should be read and applied only in
situations similar to the context of that case.
Pamplona involved the Spouses Moreto who owned
three (3) parcels of land with a total area of 2,346 square
meters. The spouses had six (6) children. After the wife had
died, the husband sold one of the parcels to the Pamplona
family, even if the conjugal partnership had not yet been
liquidated. The

_______________

86 Sanchez v. Court of Appeals, 452 Phil. 665, 677; 404 SCRA 540, 548
(2003) [Per J. Bellosillo, En Banc], citing A. Tolentino, Commentaries and
Jurisprudence on the Civil Code of the Philippines, Vol. II, p. 201 (1994).
87 Supra note 73.

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632 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac

parcel sold measured 781 square meters, which was less
than the ideal share of the husband in the estate. This
court allowed the sale to prosper because of the tolerance
from the husbands coheirs. This court ruled:

The title may be pro indiviso or inchoate but the moment the
coowner as vendor pointed out its location and even indicated the
boundaries over which the fences were to be erected without
objection, protest or complaint by the other coowners, on the
contrary they acquiesced and tolerated such alienation, occupation
and possession, We rule that a factual partition or termination of
the coownership, although partial, was created, and barred not
only the vendor, Flaviano Moreto, but also his heirs, the private
respondents herein from asserting as against the vendees
petitioners any right or title in derogation of the deed of sale
executed by said vendor Flaviano Moreto.88 (Emphasis supplied)

In Pamplona, the coheirs of Flaviano Moreto only
questioned the sale to the Pamplona family nine (9) years
after the sale. By then, the Pamplona family had exercised
several acts of ownership over the land. That is why this
court considered it acquiescence or tolerance on the part of
the coheirs when they allowed the Pamplonas to take
possession and build upon the land sold, and only
questioned these acts several years later.
The ruling in Pamplona does not apply to petitioner.
There was no evidence adduced during the trial that
respondents coowners acquiesced or tolerated the sale to
petitioner. The coowners tolerated petitioners possession
of a portion of their land because petitioner was a lessee
over a 95squaremeter portion of the property, not the
buyer of the 321squaremeter portion.

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88 Id., at p. 564; pp. 784785.

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There was also no evidence of consent to sell from the co
owners. When petitioner approached respondent in 1995 to
enforce the contract of sale, respondent referred him to
Franklin Ysaac, the administrator over the entire property.
Respondents act suggests the absence of consent from the
coowners. Petitioner did not show that he sought Franklin
Ysaacs consent as administrator and the consent of the
other coowners. Without the consent of the coowners, no
partial partition operated in favor of the sale to petitioner.
At best, the agreement between petitioner and
respondent is a contract to sell, not a contract of sale. A
contract to sell is a promise to sell an object, subject to
suspensive conditions.89 Without the fulfillment of these
suspensive conditions, the sale does not operate to
determine the obligation of the seller to deliver the object.
A coowner could enter into a contract to sell a definite
portion of the property. However, such contract is still
subject to the suspensive condition of the partition of the
property, and that the other coowners agree that the part
subject of the contract to sell vests in favor of the co
owners buyer. Hence, the coowners consent is an
important factor for the sale to ripen.

A nonexistent contract cannot be a source of
obligations, and it cannot be enforced by the courts

Since petitioner believes that there was a perfected
contract of sale between him and respondent, he argues
that a deed of sale should be formally executed. Petitioner
agrees with the Court of Appeals finding that there was no
valid rescission of the contract in accordance with Article
1592 of

_______________

89 Roque v. Lapuz, 185 Phil. 525, 540; 96 SCRA 741, 757 (1980) [Per J.
Guerrero, First Division].

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634 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac

the Civil Code.90 However, petitioner disagrees with the
Court of Appeals when it ruled that the contract was no
longer enforceable due to the supervening sale with the
local government of Naga City. Petitioner argues that the
sale in favor of the local government of Naga City was not
made in good faith. Before the sale was finalized between
the local government and the heirs of Luis and Matilde
Ysaac, petitioner had a notice of lis pendens annotated to
OCT No. 506.91 It was presumed that the local government
OCT No. 506.91 It was presumed that the local government
had due notice of petitioners adverse claim, thus, it cannot
be considered an innocent purchaser.
For respondent, due to the inexistence of a valid contract
of sale, petitioner cannot demand specific performance from
respondent.92 Respondent disagrees with the Court of
Appeals when it stated that Article 1592 of the rescission of
contract of sale applies. There is no need to apply Article
1592 because there was no contract to begin with.93 The
contract between respondent and petitioner was
terminated by virtue of the letter dated September 21,
1994.94
We rule in favor of respondent.
The absence of a contract of sale means that there is no
source of obligations for respondent, as seller, or petitioner,
as buyer. Rescission is impossible because there is no
contract to rescind. The rule in Article 1592 that requires a
judicial or notarial act to formalize rescission of a contract
of sale of an immovable property does not apply. This court
does not need to rule whether a letter is a valid method of
rescinding a sales contract over an immovable property
because the question is moot and academic.

_______________

90 Rollo, p. 18.
91 Id.
92 Id., at p. 115.
93 Id., at p. 116.
94 Id., at pp. 116117.

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Even if we assume that respondent had full ownership
of the property and that he agreed to sell a portion of the
property to petitioner, the letter was enough to cancel the
contract to sell.
Generally, [t]he power to rescind obligations is implied
in reciprocal ones, in case one of the obligors should not
comply with what is incumbent on him.95
For the sale of immovable property, the following
provision governs its rescission:
 Article 1592. In the sale of immovable property, even though
it may have been stipulated that upon failure to pay 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 notarial act. After the
demand, the court may not grant him a new term.

This provision contemplates (1) a contract of sale of an
immovable property and (2) a stipulation in the contract
that failure to pay the price at the time agreed upon will
cause the rescission of the contract. The vendee or the
buyer can still pay even after the time agreed upon, if the
agreement between the parties has these requisites. This
right of the vendee to pay ceases when the vendor or the
seller demands the rescission of the contract judicially or
extrajudicially. In case of an extrajudicial demand to
rescind the contract, it should be notarized.
Hence, this provision does not apply if it is not a contract
of sale of an immovable property and merely a contract to
sell an immovable property. A contract to sell is where the
ownership or title is retained by the seller and is not to
pass until the full payment of the price, such payment
being a positive suspensive condition and failure of which
is not a breach,

_______________

95 Civil Code, Art. 1191.

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636 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac

casual or serious, but simply an event that prevented
the obligation of the vendor to convey title from acquiring
binding force.96
In a similar case entitled Manuel v. Rodriguez,97
Eusebio Manuel offered to buy the land owned by Payatas
Subdivision, Inc. The SecretaryTreasurer of Payatas
Subdivision, Eulogio Rodriguez, Sr., agreed to sell the land
to Eusebio Manuel after negotiations. Similar to this case,
the agreement was only made orally and not in writing. An
initial payment was made, and a final payment was to be
made nine (9) to ten (10) months later. Manuel never paid
for the latter installment; hence, Eulogio Rodriguez
cancelled their agreement and sold the land to someone
else.
In Manuel, this court categorically stated that Article
1592 does not apply to a contract to sell or promise to sell,
where title remains with the vendor until fulfillment to a
positive suspensive condition, such as full payment of the
price.98 This court upheld that the contract to sell was
validly cancelled through the nonpayment of Eusebio
Manuel. The same conclusion applies in this case.
The law does not prescribe a form to rescind a contract
to sell immovable property. In Manuel, the nonpayment
operated to cancel the contract. If mere nonpayment is
enough to cancel a contract to sell, the letter given to
petitioners lawyer is also an acceptable form of rescinding
the contract. The law does not require notarization for a
letter to rescind a contract to sell immovable property.
Notarization is only required if a contract of sale is being
rescinded.
Petitioner argued that he was willing to comply with the
suspensive condition on the contract to sell because he was
ready to pay the balance of the purchase price on June 15,

_______________

96 Supra note 89.

97 109 Phil. 1 (1960) [Per J. J.B.L. Reyes, En Banc].
98 Id., at p. 9.

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1992.99 However, his argument is unmeritorious. As
ruled by the Regional Trial Court, petitioner should have
resorted to the various modes of consignment when
respondents wife refused to accept the payment on
respondents behalf.100
Therefore, even if we assumed that the contract between
petitioner and respondents were perfected, the strict
requisites in Article 1592 did not apply because the only
perfected contract was a contract to sell, not a contract of
sale. The courts cannot enforce the right of petitioner to
buy respondents property. We cannot order the execution
of a deed of sale between petitioner and respondent.
The question of double sale also becomes moot and
academic. There was no valid sale between petitioner and
respondent, while there was a valid sale between the local
government of Naga City and respondent and his co
owners. Since there is only one valid sale, the rule on
double sales under Article 1544 of the Civil Code does not
apply.101

Compensatory damages, attorneys fees, and costs of

litigation

Respondent argued that petitioner is not entitled to the
compensatory damages that the Court of Appeals awarded.
According to respondent, petitioner continues to occupy the
95squaremeter property that he has been leasing since
1986

_______________

99 Rollo, p. 18.
100 Id., at p. 41.
101 Article 1544. If the same thing should have been sold to different
vendees. . . .
Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry of
Property.
Should there be no inscription, the ownership shall pertain to the
person who in good faith was first in the possession; and, in the absence
thereof, to the person who presents the oldest title, provided there is good
faith.

638

638 SUPREME COURT REPORTS ANNOTATED

Cabrera vs. Ysaac

because the parcel was not included in the sale to the
local government of Naga City.102 Since April 30, 1990,
petitioner has not been paying rent to respondent despite
his continued occupation of the property.103 Therefore,
there was no unjust enrichment on the part of respondent
when he applied petitioners initial payment over the sale
of the property as payment for rent.
 Respondent argued further that the award of attorneys
fees and litigation expenses in favor of petitioner was also
erroneous because prior to this litigation, respondent
already informed petitioner that his claim has no basis in
law and fact.104 Yet, petitioner persisted on filing this
case.105
We rule that petitioner is entitled to the return of the
amount of money because he paid it as consideration for
ownership of the land. Since the ownership of the land
could not be transferred to him, the money he paid for that
purpose must be returned to him. Otherwise, respondent
will be unjustly enriched.
Respondents claim for rent in arrears is a separate
cause of action from this case. For petitioners earnest
money payment to be considered payment for his rent
liabilities, the rules of compensation under Article 1279 of
the Civil Code must be followed.106

_______________

102 Rollo, p. 118.

103 Id.
104 Id., at pp. 120122.
105 Id., at p. 122.
106 Article 1279. In order that compensation may be proper, it is
necessary:
(1) That each one of the obligors be bound principally, and that he be
at the same time a principal creditor of the other;
(2) That both debts consist in a sum of money, or if the things due are
consumable, they be of the same kind, and also of the same quality if the
latter has been stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable; and

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It was not proven during trial if petitioners rental
liability to respondent is due, or if it is already liquidated
and demandable. Hence, this court is limited to uphold the
ruling of the Court of Appeals, but such payment could be
subject to the rule on compensation.
However, petitioner is not entitled to attorneys fees and
the costs of litigation. The Court of Appeals awarded
attorneys fees to petitioner just to protect his right
[because petitioner] reached this court to seek justice for
himself.107
Contrary to the Court of Appeals ruling, we find that
petitioner did not have a clear right over the property in
question. The Court of Appeals awarded attorneys fees and
litigation costs on the premise that the contract between
petitioner and respondent was perfected. Without a valid
contract that stipulates his rights, petitioner risked
litigation in order to determine if he has rights, and not to
protect rights that he currently has. Hence, the award of
attorneys fees and litigation costs was not properly
justified.
WHEREFORE, the petition is DENIED. The Court of
Appeals decision dated June 19, 2003 in C.A.G.R. CV No.
65869 is SET ASIDE. The contract between petitioner and
respondent is DECLARED invalid and, therefore, cannot
be subject to specific performance. Respondent is
ORDERED to return P10,600.00 to petitioner, with legal
interest of 12% per annum from September 20, 1995 until
June 30, 2013 and 6% per annum from July 1, 2013 until
fully paid. The award of attorneys fees and litigation
expenses is DELETED.
SO ORDERED.

_______________

(5) That over neither of them there be any retention or controversy,

commenced by third persons and communicated in due time to the debtor.
107 Rollo, p. 62.

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Cabrera vs. Ysaac

Carpio (Chairperson), Brion, Del Castillo and

Mendoza, JJ., concur.

Petition denied, judgment set aside.

Notes.Reciprocal obligations are to be performed

simultaneously such that the performance of one is
conditioned upon the simultaneous fulfillment of the other.
 (Heirs of Ramon C. Gaite vs. The Plaza, Inc., 640 SCRA 576
[2011])
The power to rescind the obligations of the injured party
is implied in reciprocal obligations. (Maglasang vs.
Northwestern University, Inc., 694 SCRA 128 [2013])
o0o

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