Nool VS Ca

8/13/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 276
VOL. 276, JULY 24, 1997 149

Nool vs. Court of Appeals
*
G.R. No. 116635. July 24, 1997.
CONCHITA NOOL and GAUDENCIO ALMOJERA,

petitioner, vs. COURT OF APPEALS, ANACLETO NOOL
and EMILIA NEBRE, respondents.
Contracts; Sales; Void Contracts; Article 1370 of the Civil

Code is applicable only to valid and enforceable contracts.—We
cannot sustain petitioners’ view. Article 1370 of the Civil Code is
applicable only to valid and enforceable contracts. The Regional
Trial Court and the Court of Appeals ruled that the principal
contract of sale contained in Exhibit C and the auxiliary contract
of repurchase in Exhibit D are both void. This conclusion of the
two lower courts appears to find support in Dignos vs. Court of
Appeals, where the Court held: “Be that as it may, it is evident
that when petitioners sold said land to the Cabigas spouses, they
were no longer owners of the same and the sale is null and void.”
Same; Same; Same; A void contract cannot give rise to a valid

one.—In the present case, it is clear that the sellers no longer had
any title to the parcels of land at the time of sale. Since Exhibit D,
the alleged contract of repurchase, was dependent on the validity
of Exhibit C, it is itself void. A void contract cannot give rise to a
valid one. Verily, Article 1422 of the Civil Code provides that “(a)
contract which is the direct result of a previous illegal contract, is
also void and inexistent.”
Same; Same; Same; Where the sellers can no longer deliver the
object of the sale to the buyers, as the buyers themselves have
already acquired title and delivery thereof from the rightful owner,
such contract may be deemed to be inoperative and may thus fall,
by analogy, under item No. 5 of Article 1409 of the Civil Code
—“Those which contemplate an impossible service.”—In the
present case however, it is likewise clear that the sellers can no
longer deliver the object of the sale to the buyers, as the buyers
themselves have already acquired title and delivery thereof from
the rightful owner, the DBP. Thus, such contract may be deemed
to be inoperative and may thus fall, by analogy, under item No. 5
www.central.com.ph/sfsreader/session/0000016c88929f87e95a33c7003600fb002c009e/t/?o=False 1/18
of Article 1409 of the Civil Code: “Those which contemplate an

impossible service.” Article
______________
* THIRD DIVISION.
150
150 SUPREME COURT REPORTS ANNOTATED
1459 of the Civil Code provides that “the vendor must have a
right to transfer the ownership thereof [object of the sale] at the
time it is delivered.” Here, delivery of ownership is no longer
possible. It has become impossible.
Same; Same; Same; Pacto de Retro; The right to repurchase

presupposes a valid contract of sale between the same parties.—
One “repurchases” only what one has previously sold. In other
words, the right to repurchase presupposes a valid contract of sale
between the same parties. Undisputedly, private respondents
acquired title to the property from DBP, and not from petitioners.
Same; Same; Same; Options; An accepted unilateral promise

to buy or sell a determinate thing for a price certain is binding
upon the promissor if the promise is supported by a consideration
distinct from the price.—Assuming arguendo that Exhibit D is
separate and distinct from Exhibit C and is not affected by the
nullity of the latter, still petitioners do not thereby acquire a right
to repurchase the property. In that scenario, Exhibit D ceases to
be a “right to repurchase” ancillary and incidental to the contract
of sale; rather, it becomes an accepted unilateral promise to sell.
Article 1479 of the Civil Code, however, provides that “an
accepted unilateral promise to buy or sell a determinate thing for
a price certain is binding upon the promissor if the promise is
supported by a consideration distinct from the price.” In the
present case, the alleged written contract of repurchase contained
in Exhibit D is bereft of any consideration distinct from the price.
Accordingly, as an independent contract, it cannot bind private
respondents. The ruling in Diamante vs. CA supports this.
Same; Same; Same; Estoppel; One is not estopped in

impugning the validity of void contracts; It is a well-settled
doctrine that “as between parties to a contract, validity cannot be

given to it by estoppel if it is prohibited by law or it is against
public policy.”—Petitioners argue that “when Anacleto Nool took
the possession of the two hectares, more or less, and let the other
two hectares to be occupied and cultivated by plaintiffs-
appellants, Anacleto Nool cannot later on disclaim the terms or
contions (sic) agreed upon and his actuation is within the ambit of
estoppel x x x.” We disagree. The private respondents cannot be
estopped from raising the defense of nullity of contract, specially
in this case where they acted in good faith, believing that indeed
petitioners could sell the two parcels of land in
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VOL. 276, JULY 24, 1997 151
question. Article 1410 of the Civil Code mandates that “(t)he

action or defense for the declaration of the inexistence of a
contract does not prescribe.” It is a well-settled doctrine that “as
between parties to a contract, validity cannot be given to it by
estoppel if it is prohibited by law or it is against public policy (19
Am. Jur. 802). It is not within the competence of any citizen to
barter away what public policy by law seeks to preserve.” Thus, it
is immaterial that private respondents initially acted to
implement the contract of sale, believing in good faith that the
same was valid. We stress that a contract void at inception cannot
be validated by ratification or prescription and certainly cannot be
binding on or enforceable against private respondents.
Same; Same; Same; If a void contract has already been

performed, the restoration of what has been given is in order, and,
corollarily, interest thereon will run only from the time of the
aggrieved party’s demand for the return of this amount.—We are
not persuaded. Based on the previous discussion, the balance of
P14,000.00 under the void contract of sale may not be enforced.
Petitioners are the ones who have an obligation to return what
they unduly and improperly received by reason of the invalid
contract of sale. Since they cannot legally give title to what they
“sold,” they cannot keep the money paid for the object of the sale.
It is basic that “(e)very person who through an act of performance
by another, or any other means, acquires or comes into possession
of something at the expense of the latter without just or legal
ground, shall return the same.” Thus, if a void contract has
already “been performed, the restoration of what has been given
is in order.” Corollarily and as aptly ordered by respondent
appellate court, interest thereon will run only from the time of
private respondents’ demand for the return of this amount in
their counterclaim. In the same vein, petitioners’ possession and
cultivation of the two hectares are anchored on private
respondents’ tolerance. Clearly, the latter’s tolerance ceased upon
their counterclaim and demand on the former to vacate. Hence,
their right to possess and cultivate the land ipso facto ceased.
PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.

Godofredo P. Melegrito for petitioners.
152

Dionisio E. Bala, Jr. and Cesar C. Purugganan for

private respondents.
PANGANIBAN, J.:
A contract of repurchase arising out of a contract of sale

where the seller did not have any title to the property
“sold” is not valid. Since nothing was sold, then there is
also nothing to repurchase.
Statement of the Case
This postulate is explained by this Court as it resolves this

petition for review
1
on certiorari assailing the 2January 20,
1993 Decision of Respondent Court of Appeals
3
in CA-G.R.4
CV No. 36473, affirming 5 the decision of the trial court
which disposed as follows:
“WHEREFORE, judgment is hereby rendered dismissing the

complaint for no cause of action, and hereby:
1. Declaring the private writing, Exhibit ‘C,’ to be an option

to sell, not binding and considered validly withdrawn by
the defendants for want of consideration;
2. Ordering the plaintiffs to return to the defendants the
sum of P30,000.00 plus interest thereon at the legal rate,
from the time of filing of defendants’ counterclaim until
the same is fully paid;
3. Ordering the plaintiffs to deliver peaceful possession of

the two hectares mentioned in paragraph 7 of the
complaint and in paragraph 31 of defendants’ answer
(counterclaim);
______________
1 Rollo, pp. 20-25.

2 Second Division, composed of J. Fidel P. Purisima, ponente and
Chairman, and JJ. Asaali S. Isnani and Corona Ibay Somera, concurring.
3 In Civil Case No. Br. 23-242.
4 Regional Trial Court of Roxas, Isabela, Second Judicial Region,
Branch 23, presided by Judge Teodulo E. Mirasol.
5 Decision of the Regional Trial Court, p. 5; Record of the Regional Trial
Court, p. 180.
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VOL. 276, JULY 24, 1997 153

4. Ordering the plaintiffs to pay reasonable rents on said two

hectares at P5,000.00 per annum or at P2,500.00 per cropping
from the time of judicial demand mentioned in paragraph 2 of the
dispositive portion of this decision, until the said two hectares
shall have been delivered to the defendants; and
5. To pay the costs.
SO ORDERED.”
The Antecedent Facts
The facts, which appear undisputed by the parties, are

narrated by the Court of Appeals as follows:
“Two (2) parcels of land are in dispute and litigated upon here.
The first has an area of 1 hectare. It was formerly owned by
Victorino Nool and covered by Transfer Certificate of Title No. T-
74950. With an area of 3.0880 hectares, the other parcel was
previously owned by Francisco Nool under Transfer Certificate of
Title No. T-100945. Both parcels are situated in San Manuel,
Isabela. The plaintiff spouses, Conchita Nool and Gaudencio
Almojera, now the appellants, seek recovery of the
aforementioned parcels of land from the defendants, Anacleto
Nool, a younger brother of Conchita, and Emilia Nebre, now the
appellees.
In their complaint, plaintiff-appellants alleged inter alia that
they are the owners of subject parcels of land, and they bought
the same from Conchita’s other brothers, Victorino Nool and

Francisco Nool; that as plaintiffs were in dire need of money, they
obtained a loan from the Ilagan Branch of the Development Bank
of the Philippines, in Ilagan, Isabela, secured by a real estate
mortgage on said parcels of land, which were still registered in
the names of Victorino Nool and Francisco Nool, at the time, and
for the failure of plaintiffs to pay the said loan, including interest
and surcharges, totaling P56,000.00, the mortgage was foreclosed;
that within the period of redemption, plaintiffs contacted
defendant Anacleto Nool for the latter to redeem the foreclosed
properties from DBP, which the latter did; and as a result, the
titles of the two (2) parcels of land in question were transferred to
Anacleto Nool; that as part of their arrangement or
understanding, Anacleto Nool agreed to buy from plaintiff
Conchita Nool the two (2) parcels of land under controversy, for a
total price of P100,000.00, P30,000.00 of which price was paid
154

to Conchita, and upon payment of the balance of P14,000.00,

plaintiffs were to regain possession of the two (2) hectares of land,
which amounts defendants
6
failed to pay, and the
7
same day the
said arrangement was made; another covenant was entered into
by the parties, whereby defendants agreed to return to plaintiffs
the lands in question, at anytime the latter have the necessary
amount; that plaintiffs asked the defendants to return the same
but despite the intervention of the Barangay Captain of their
place, defendants refused to return the said parcels of land to
plaintiffs; thereby impelling them (plaintiffs) to come to court for
relief.
In their Answer, defendants-appellees theorized that they
acquired the lands in question from the Development Bank of the
Philippines, through negotiated sale, and were misled by
plaintiffs when defendant Anacleto Nool signed the private
writing, agreeing to return subject lands when plaintiffs have the
money to redeem the same; defendant Anacleto having been made
to believe, then, that his sister, Conchita, still had the right to
redeem the said properties.
The pivot of inquiry here, as aptly observed below, is the
nature and significance of the private document, marked Exhibit
‘D’ for plaintiffs, which document has not been denied by the
defendants, as defendants even averred in their Answer that they
gave an advance payment of P30,000.00 therefor, and
acknowledged that they had a balance of P14,000.00 to complete
their payment. On this crucial issue, the lower court adjudged the
said private writing (Exhibit ‘D’) as an option to sell not binding

upon and considered the same validly withdrawn by defendants
for want of consideration; and decided the case in the manner
abovementioned.
There is no quibble over the fact that the two (2) parcels of land
in dispute were mortgaged to the Development Bank of the
Philippines, to secure a loan obtained by plaintiffs from DBP
(Ilagan Branch), Ilagan, Isabela. For the non-payment of said
loan, the mortgage was foreclosed and in the process, ownership
of the mortgaged lands was consolidated in DBP (Exhibits 3 and 4
for defendants). After DBP became the absolute owner of the two
parcels of land, defendants negotiated with DBP and succeeded in
_______________
6 Exhibit C, executed in the parties’ native dialect, Ilocano, dated November 30,
1984, Record of the Regional Trial Court, p. 95.
7 Exhibit D, executed in the parties’ native dialect, Ilocano, dated November 30,
1984, Record of the Regional Trial Court, p. 97.
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VOL. 276, JULY 24, 1997 155

buying the same. By virtue of such sale by DBP in favor of

defendants, the titles of DBP were cancelled and the
corresponding Transfer Certificates of Title
8
(Annexes ‘C’ and ‘D’ to
the Complaint) issued to the defendants.”
It should be stressed that Manuel S. Mallorca, authorized

officer of DBP, certified that the one-year redemption
period was from March 16, 1982 up to March 15, 1983 and
that the mortgagor’s 9
right of redemption was not exercised
within this period. Hence, DBP became the absolute owner
of said parcels of land for which it was issued new
certificates of title, both entered on May 23, 101983 by the
Registry of Deeds for the Province of Isabela. About two
years thereafter, on 11April 1, 1985, DBP entered into a Deed
of Conditional Sale involving the same parcels of land
with Private Respondent Anacleto Nool as vendee.
Subsequently, the latter
12
was issued new certificates of title
on February 8, 1988. 13
The Court of Appeals ruled:
“WHEREFORE, finding no reversible error infirming it, the

appealed Judgment is hereby AFFIRMED in toto. No
pronouncement as to costs.”
The Issues
Petitioners impute to Respondent Court the following

alleged “errors”:
“1. The Honorable Court of Appeals, Second Division has

misapplied the legal import or meaning of Exhibit ‘C’ in a way
______________
8 Decision of the Court of Appeals, pp. 2-3; rollo, pp. 21-22.

9 Affidavit of Non-Redemption, p. 1; Record of the Regional Trial Court, p. 27.
10 DBP Transfer Certificates of Title, Record of the RegionalTrial Court, pp. 28-29.
11 Record of the Regional Trial Court, pp. 30-32.
12 Anacleto Nool’s Transfer Certificates of Title, Record of the Regional Trial
Court, pp. 33-34.
13 Ibid., p. 5; rollo, p. 24.
156

contrary to law and existing jurisprudence in stating that it has

no binding effect between the parties and considered validly
withdrawn by defendants-appellees for want of consideration.
2. The Honorable Court of Appeals, Second Division has
miserably failed to give legal significance to the actual possession
and cultivation and appropriating exclusively the palay harvest of
the two (2) hectares land pending the payment of the remaining
balance of fourteen thousand pesos (P14,000.00) by defendants-
appellees as indicated in Exhibit ‘C.’
3. The Honorable Court of Appeals has seriously erred in
affirming the decision of the lower court by awarding the payment
of rents per annum and the return of P30,000.00 and not allowing
the plaintiffs-appellants to re-acquire the four (4) hectares, more
or less upon payment of one hundred 14
thousand pesos
(P100,000.00) as shown in Exhibit ‘D.’ ”
The Court’s Ruling
The petition is bereft of merit.
First Issue: Are Exhibits “C” and “D” Valid and

Enforceable?
The petitioner-spouses plead for the enforcement of their

agreement with private respondents as contained in
Exhibits “C” and “D,” and seek damages for the latter’s
alleged breach thereof. In Exhibit C, which was a private
handwritten document labeled by the parties as Resibo ti
Katulagan or Receipt of Agreement, the petitioners appear
to have “sold” to private respondents the parcels of land in
controversy covered by TCT No. T-74950 and TCT No. T-
100945. On the other hand, Exhibit D, which was also a
private handwritten document in Ilocano and labeled as
Kasuratan, private respondents agreed that Conchita Nool
“can acquire back or 15
repurchase later on said land when
she has the money.”
______________
14 Petition, pp. 7-8; rollo, pp. 8-9.

15 Exhibit D-1, English translation of the document marked as Exhibit
D; records, p. 98.
157
VOL. 276, JULY 24, 1997 157

In seeking to enforce her alleged right to repurchase the

parcels of land, Conchita (joined by her co-petitioner-
husband) invokes Article 1370 of the Civil Code which
mandates that “(i)f 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.” Hence, petitioners contend that the Court of
Appeals erred in affirming the trial court’s finding and
conclusion that said Exhibits C and D were “not merely
voidable but utterly void and inexistent.”
We cannot sustain petitioners’ view. Article 1370 of the
Civil Code is applicable only to valid and enforceable
contracts. The Regional Trial Court and the Court of
Appeals ruled that the principal contract of sale contained
in Exhibit C and the auxiliary contract of repurchase in
Exhibit D are both void. This conclusion of the two lower
courts appears
16
to find support in Dignos vs. Court of
Appeals, where the Court held:
“Be that as it may, it is evident that when petitioners sold said

land to the Cabigas spouses, they were no longer owners of the
same and the sale is null and void.”
In the present case, it is clear that the sellers no longer had

any title to the parcels of land at the time of sale. Since
Exhibit D, the alleged contract of repurchase, was
dependent on the validity of Exhibit C, it 17is itself void. A
void contract cannot give rise to a valid one. Verily, Article
1422 of the Civil Code provides that “(a) contract which is
the direct result of a previous illegal contract, is also void
and inexistent.”
We should however add that Dignos did not cite its basis
for ruling that a “sale is null and void” where the sellers
“were no longer the owners” of the property. Such a
situation (where the sellers were no longer owners) does
not appear to be one of the void contracts enumerated in
Article 1409 of the Civil
______________
16 158 SCRA 375, 383, February 29, 1988.

17 Ibid., p. 732.
158

18 19
Code. Moreover, the Civil Code itself recognizes a sale
where the goods are to be “acquired x x x by the seller after
the perfection of the contract of sale,” clearly implying that
a sale is possible even if the seller was not the owner at the
time of sale, provided he acquires title to the property later
on.
In the present case however, it is likewise clear that the
sellers can no longer deliver the object of the sale to the
buyers, as the buyers themselves have already acquired
title and delivery thereof from the rightful owner, the 20DBP.
Thus, such contract may be deemed to be inoperative and
may thus fall, by analogy, under item No. 5 of Article 1409
of the Civil Code: “Those which contemplate an impossible
service.” Article 1459 of the Civil Code provides that “the
vendor must have a right to transfer the ownership thereof
[object of the sale] at the time it is delivered.” Here,
delivery of ownership is no longer possible. It has become
impossible.
Furthermore, Article 1505 of the Civil Code provides
that “where goods are sold by a person who is not the
owner thereof, and who does not sell them under authority
or with
______________
18 Article 1409 of the Civil Code provides.
ART. 1409. The following contracts are inexistent and void from the beginning:
(1) Those whose cause, object or purpose is contrary to law, morals, good
customs, public order or public policy;
(2) Those which are absolutely simulated or fictitious;
(3) Those whose case or object did not exist at the time of the transaction;
(4) Those whose object is outside the commerce of men;
(5) Those which contemplate an impossible service;
(6) Those where the intention of the parties relative to the principal object of
the contract cannot be ascertained;
(7) Those expressly prohibited or declared void by law.
These contracts cannot be ratified. Neither can the right to set up the defense of
illegality be waived.”
19 Article 1402, Civil Code.

20 Cf. Vitug, Compendium of Civil Law and Jurisprudence (1993), p.
547.
159
VOL. 276, JULY 24, 1997 159

consent of the owner, the buyer acquires no better title to

the goods than the seller had, unless the owner of the goods
is by his conduct precluded from denying the seller’s
authority to sell.” Here, there is no allegation at all that
petitioners were authorized by DBP to sell the property to
the private respondents. Jurisprudence, on the other hand,
teaches us that “a person can sell only what he owns or is
authorized to sell; the buyer can as a consequence21 acquire
no more than what the seller can legally transfer.” No one
can give what he does not have—nemo dat quod non habet.
On the other hand, Exhibit D presupposes that petitioners
could repurchase the property that they “sold” to private
respondents. As petitioners “sold” nothing, it follows that
they can also “repurchase” nothing. Nothing sold, nothing
to repurchase. In this light, the contract of repurchase is
also inoperative—and by the same analogy, void.
Contract of Repurchase
Dependent on Validity of Sale
As borne out by the evidence on record, the private
respondents bought the two parcels of land directly from
DBP on April 1, 1985 after discovering that petitioners did

not own said property, the subject of Exhibits C and D
executed on November 30, 1984. Petitioners, however,
claim that they can exercise their alleged right to
“repurchase” the property, after
22
private respondents had
acquired the same from DBP. We cannot accede to this,
for it clearly contravenes the intention of the parties and
the nature of their agreement. Exhibit D reads:
“W R I T I N G
Nov. 30, 1984

That I, Anacleto Nool have bought from my sister
Conchita Nool a land an area of four hectares (4 has.)
in the value of One Hundred Thousand (100,000.00)
Pesos. It is our agreement as
______________
21 Segura vs. Segura, 165 SCRA 368, 374, September 19, 1988.
22 Petitioners’ Memorandum, pp. 14-15; rollo, pp. 58-59.
160

brother and sister that she can acquire back or

repurchase later on said land when she has the money.
[Italics supplied]
As proof of this agreement we sign as brother and
sister this written document this day of Nov. 30, 1984,
at District 4, San Manuel, Isabela.
Sgd ANACLETO NOOL
Anacleto Nool
Sgd EMILIO PARON

Witness
Sgd CONCHITA NOOL23

Conchita Nool”
One “repurchases” only what one has previously sold. In

other words, the right to repurchase presupposes a valid
contract of sale between the same parties. Undisputedly,
private respondents acquired title to the property from
DBP, and not from petitioners.
Assuming arguendo that Exhibit D is separate and
distinct from Exhibit C and is not affected by the nullity of
the latter, still petitioners do not thereby acquire a right to

repurchase the property. In that scenario, Exhibit D ceases
to be a “right
______________
23 Records, p. 98. The original document in Ilocano reads as follows:
“Kasuratan
Nov. 30, 1984

Siak ni Anacleto Nool adda ginatang ko keni kabsat ko nga ni
Conchita Nool nga daga nga uppat nga hectarya (4 has.) nga aggatad
iti One Hundred Thousand (100,000.00) pesos. Ket nagtulagan mi nga
agkabsat nga mabalin nanto nga pasublien wenno repurchase nanto
to nasao nga daga no maadaan iti kuwarta.
Kas pammaneknek iti daytoy nga katulagan agpirma kami nga
agkabsat iti daytoy nga kasuratan ita nga aldaw Nov. 30, 1984 ditoy
Dist. No. 4 San Manuel, Isabela.
(Sgd.) Emilio Padron (Sgd.) Anacleto Nool
Testigo (Sgd.) Anacleto Nool
(Sgd.) Conchita Nool”
(Records, p. 97)
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VOL. 276, JULY 24, 1997 161

to repurchase” ancillary and incidental to the contract of

sale; rather, it becomes an accepted unilateral promise to
sell. Article 1479 of the Civil Code, however, provides that
“an accepted unilateral promise to buy or sell a
determinate thing for a price certain is binding upon the
promissor if the promise is supported by a consideration
distinct from the price.” In the present case, the alleged
written contract of repurchase contained in Exhibit D is
bereft of any consideration distinct from the price.
Accordingly, as an independent contract, it cannot bind 24
private respondents. The ruling in Diamante vs. CA
supports this. In that case, the Court through Mr. Justice
Hilario G. Davide, Jr. explained:
“Article 1601 of the Civil Code provides:
“Conventional redemption shall take place when the vendor

reserves the right to repurchase the thing sold, with the
obligation to comply with the provisions of article 1616 and other
stipulations which may have been agreed upon.” In Villarica, et
al. vs. Court of Appeals, et al., decided on 29 November 1968, or
barely seven (7) days before the respondent Court promulgated its
decisions in this case, this Court, interpreting the above Article,
held:
“The right of repurchase is not a right granted the vendor by
the vendee in a subsequent instrument, but is a right reserved by
the vendor in the same instrument of sale as one of the
stipulations of the contract. Once the instrument of absolute sale
is executed, the vendor can no longer reserve the right to
repurchase, and any right thereafter granted the vendor by the
vendee in a separate instrument cannot be a right of repurchase
but some other right like the option to buy in the instant case. x x
x.”
In the earlier case of Ramos, et al. vs. Icasiano, et al., decided
in 1927, this Court had already ruled that “an agreement to
repurchase becomes a promise to sell when made after the sale,
because when the sale is made without such an agreement, the
purchaser acquires the thing sold absolutely, and if he afterwards
grants the vendor the right to repurchase, it is a new contract
entered into by the purchaser, as absolute owner already of the
object. In that case the vendor has not reserved to himself the
right to repurchase.”
______________
24 206 SCRA 52, 60-61, February 7, 1992.
162

In Vda. De Cruzo, et al. vs. Carriaga, et al. this Court found

another occasion to apply the foregoing principle.
Hence, the Option to Repurchase executed by private respondent
in the present case, was merely a promise to sell, which must be
governed by Article 1479 of the Civil Code which reads as follows:
“Art. 1479.—A promise to buy and sell a determinate thing for
a price certain is reciprocally demandable.
‘An accepted unilateral promise to buy or to sell a determinate
thing for a price certain is binding upon the promissor if the
promise is supported by a consideration distinct from the price.’ ”
Right to Repurchase Based on

Homestead or Trust Non-Existent
Petitioners also base their alleged right
25
to repurchase on
(1) Sec. 119 of the Public Land Act 26 and (2) an implied
trust relation as “brother and sister.” The Court notes
that Victorino Nool and Francisco Nool mortgaged the land

to DBP. The brothers, together with Conchita Nool and
Anacleto Nool, were all siblings and heirs qualified to
repurchase the two parcels of land under Sec. 119 of the
Public Land Act which provides that “(e)very conveyance of
land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by
the applicant, his widow or legal heirs, within a period of
five years from the date of conveyance.” Assuming the
applicability of this statutory provision to the case at bar, it
is indisputable that Private Respondent Anacleto Nool
already repurchased from DBP the contested properties.
Hence, there was no more right of repurchase that his
sister Conchita or brothers Victorino and Francisco could
exercise. The properties were already owned by an heir of
the homestead grantee and the rationale of the provision to
keep homestead 27
lands within the family of the grantee was
thus fulfilled.
______________
25 Memorandum, p. 12; rollo, p. 56.

26 Ibid., p. 14; rollo, p. 58.
27 See Ferrer vs. Mangente, 50 SCRA 424, April 13, 1973.
163
VOL. 276, JULY 24, 1997 163

The claim of a trust relation is likewise without merit. The

records show that private respondents did not purchase the
contested properties from DBP in trust for petitioners. The
former, as previously mentioned, in fact bought the land
from DBP upon realization that the latter could not validly
sell the same. Obviously, petitioners bought it for
themselves. There is no evidence at all in the records that
they bought the land in trust for private respondents. The
fact that Anacleto Nool was the younger brother of
Conchita Nool and that they signed a contract of
repurchase, which as discussed earlier was void, does not
prove the existence of an implied trust in favor of
petitioners.
Second Issue: No Estoppel in Impugning

the Validity of Void Contracts
Petitioners argue that “when Anacleto Nool took the
possession of the two hectares, more or less, and let the
other two hectares to be occupied and cultivated by

plaintiffs-appellants, Anacleto Nool cannot later on
disclaim the terms or contions (sic) agreed upon and 28
his
actuation is within the ambit of estoppel x x x.” We
disagree. The private respondents cannot be estopped from
raising the defense of nullity of contract, specially in this
case where they acted in good faith, believing that indeed
petitioners could sell the two parcels of land in question.
Article 1410 of the Civil Code mandates that “(t)he action
or defense for the declaration of the inexistence of a
contract does not prescribe.” It is a well-settled doctrine
that “as between parties to a contract, validity cannot be
given to it by estoppel if it is prohibited by law or it is
against public policy (19 Am. Jur. 802). It is not within the
competence of any citizen to29barter away what public policy
by law seeks to preserve.” Thus, it is immaterial that
private respondents initially acted to implement the
contract of sale,
______________
28 Petition, pp. 12-13; rollo, pp. 13-14.

29 Prudential Bank vs. Panis, 153 SCRA 390, 398, August 31, 1987;
citing Arsenal vs. IAC, 143 SCRA 54, (1986) and Gonzalo Puyat & Sons,
Inc. vs. De los Amas and Alino, supra.
164

believing in good faith that the same was valid. We stress

that a contract void at inception cannot be validated by
ratification or prescription and certainly cannot
30
be binding
on or enforceable against private respondents.
Third Issue: Return of P30,000.00 with Interest

and Payment of Rent
Petitioners further argue that it would be a “miscarriage of
justice” to order them (1) to return the sum of P30,000.00 to
private respondents when allegedly it was Private
Respondent Anacleto Nool who owed the former a balance
of P14,000.00 and (2) to order petitioners to pay rent 31when
they “were allowed to cultivate the said two hectares.”
We are not persuaded. Based on the previous discussion,
the balance of P14,000.00 under the void contract of sale
may not be enforced. Petitioners are the ones who have an
obligation to return what they unduly and improperly
received by reason of the invalid contract of sale. Since they

cannot legally give title to what they “sold,” they cannot
keep the money paid for the object of the sale. It is basic
that “(e)very person who through an act of performance by
another, or any other means, acquires or comes into
possession of something at the expense of the32 latter
without just or legal ground, shall return the same.” Thus,
if a void contract has already “been performed, 33
the
restoration of what has been given is in order.” Corollarily
and as aptly ordered by respondent appellate court,
interest thereon will run only from the time of private
respondents’ demand
34
for the return of this amount in their
counterclaim. In the same vein, petitioners’ posses-
______________
30 Tolentino, Arturo A., Commentaries and Jurisprudence on the Civil

Code of the Philippines, p. 633, Vol. IV, (1991).
31 Memorandum, p. 13; rollo, p. 57.
32 Article 22, Civil Code of the Philippines.
33 Tolentino, supra, p. 632; citing Perez Gonzales & Alguer; 1-I
Ennecerus, Kipp & Wolff 364-366; 3 Von Tuhr 311; 3 Fabres 231.
34 Answer with Counterclaim, p. 7; Record of the Regional Trial Court,
p. 22.
165
VOL. 276, JULY 24, 1997 165

sion and cultivation of the two hectares are anchored on

private respondents’ tolerance. Clearly, the latter’s
tolerance ceased upon their counterclaim and demand on
the former to vacate. Hence, their right to possess and
cultivate the land ipso facto ceased.
WHEREFORE, the petition is DENIED and the assailed
Decision of the Court of Appeals affirming that of the trial
court is hereby AFFIRMED.
SO ORDERED.
Narvasa (C.J., Chairman), Davide, Jr., Melo and

Francisco, JJ., concur.
Petition denied, judgment affirmed.
Notes.—When the terms of a contract clearly show that

it is one of sale with right of repurchase, it must be
interpreted according to its literal sense, and held to be
such a contract. (Ignacio vs. Court of Appeals, 246 SCRA

242 [1995])
The court will enforce the agreement or understanding
in consonance with the true intent of the parties at the
time of the execution of the contract even if the purported
Sale Con Pacto de Retro was registered in the name of the
transferee and a new certificate of title was issued in his
name. (Olea vs. Court of Appeals, 247 SCRA 274 [1995])
——o0o——
166
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8/13/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 276

VOL. 276, JULY 24, 1997 149

CONCHITA NOOL and GAUDENCIO ALMOJERA,

Contracts; Sales; Void Contracts; Article 1370 of the Civil

Same; Same; Same; A void contract cannot give rise to a valid

of Article 1409 of the Civil Code: “Those which contemplate an

150 SUPREME COURT REPORTS ANNOTATED

Nool vs. Court of Appeals

Same; Same; Same; Pacto de Retro; The right to repurchase

Same; Same; Same; Options; An accepted unilateral promise

Same; Same; Same; Estoppel; One is not estopped in

doctrine that “as between parties to a contract, validity cannot be

VOL. 276, JULY 24, 1997 151

Nool vs. Court of Appeals

question. Article 1410 of the Civil Code mandates that “(t)he

Same; Same; Same; If a void contract has already been

PETITION for review on certiorari of a decision of the

The facts are stated in the opinion of the Court.

152 SUPREME COURT REPORTS ANNOTATED

Dionisio E. Bala, Jr. and Cesar C. Purugganan for

A contract of repurchase arising out of a contract of sale

Statement of the Case

This postulate is explained by this Court as it resolves this

“WHEREFORE, judgment is hereby rendered dismissing the

1. Declaring the private writing, Exhibit ‘C,’ to be an option

3. Ordering the plaintiffs to deliver peaceful possession of

1 Rollo, pp. 20-25.

VOL. 276, JULY 24, 1997 153

4. Ordering the plaintiffs to pay reasonable rents on said two

The Antecedent Facts

The facts, which appear undisputed by the parties, are

the same from Conchita’s other brothers, Victorino Nool and

154 SUPREME COURT REPORTS ANNOTATED

to Conchita, and upon payment of the balance of P14,000.00,

said private writing (Exhibit ‘D’) as an option to sell not binding

VOL. 276, JULY 24, 1997 155

buying the same. By virtue of such sale by DBP in favor of

It should be stressed that Manuel S. Mallorca, authorized

“WHEREFORE, finding no reversible error infirming it, the

Petitioners impute to Respondent Court the following

“1. The Honorable Court of Appeals, Second Division has

8 Decision of the Court of Appeals, pp. 2-3; rollo, pp. 21-22.

156 SUPREME COURT REPORTS ANNOTATED

contrary to law and existing jurisprudence in stating that it has

The Court’s Ruling

The petition is bereft of merit.

First Issue: Are Exhibits “C” and “D” Valid and

The petitioner-spouses plead for the enforcement of their

14 Petition, pp. 7-8; rollo, pp. 8-9.

VOL. 276, JULY 24, 1997 157

In seeking to enforce her alleged right to repurchase the

“Be that as it may, it is evident that when petitioners sold said

In the present case, it is clear that the sellers no longer had

16 158 SCRA 375, 383, February 29, 1988.

158 SUPREME COURT REPORTS ANNOTATED

18 Article 1409 of the Civil Code provides.

19 Article 1402, Civil Code.

VOL. 276, JULY 24, 1997 159

consent of the owner, the buyer acquires no better title to