51. CHRYSLER PHILIPPINES CORPORATION vs.

CA
G.R. No. L-55684 December 19, 1984

FACTS:
On October 2, 1970, Sambok, Bacolod ordered from Chrysler Philippines Corporation various automotive products
worth P30,909.61, payable in 45 days. On November 25, 1970, Chrysler Philippines Corporation delivered said products to
its forwarding agent, Allied Brokerage Corporation for shipment. Allied Brokerage loaded the goods on board the M/S Doña
Florentina, a vessel owned and operated by Negros Navigation Company, for delivery to Sambok, Bacolod. Upon collection,
Sambok, Bacolod refused to pay claiming that it had not received the merchandise. Chrysler Philippines Corporation
demanded the return of the merchandise or their value from Allied Brokerage and Negros Navigation, but both denied any
liability. A complaint for damages was filed against Allied Brokerage Corporation, Negros Navigation Company and Sambok,
Bacolod.
The Court of First Instance of Rizal dismissed the complaint against Allied Brokerage and Negros Navigation for lack
of cause of action but finding Sambok, Bacolod liable for refusing to take delivery of the shipment for no justifiable reason
from Negros Navigation despite having received the Bill of Lading constituted wrongful neglect or refusal to accept and pay
for the subject shipment. On appeal, the Appellate Court set aside the appealed judgment and dismissed the complaint
finding that there was misdelivery as the goods should have been delivered to Sambok, Iloilo.

ISSUE:
1. Whether or not Sambok, Bacolod should be liable for refusing to accept and pay for the subject shipment.
2. Whether or not Sambok, Bacolod should be liable for the loss of the cargo.

HELD:
1. No. The evidence is clear that Negros Navigation could not produce the merchandise nor ascertain its whereabouts
at the time Sambok, Bacolod, was ready to take delivery. Where the seller delivers to the buyer a quantity of goods less
than he contracted to sell, the buyer may reject them.

2. No. From the evidentiary record, Negros Navigation was the party negligent in failing to deliver the complete
shipment either to Sambok, Bacolod, or to Sambok, Iloilo, but as the Trial Court found, Chrysler Philippines Corporation
failed to comply with the conditions precedent to the filing of a judicial action. Thus, in the last analysis, it is Chrysler
Philippines Corporation that must shoulder the resulting loss. The general rule that before, delivery, the risk of loss is home
by the seller who is still the owner, under the principle of "res petit domino", is applicable on the case at bar.
In sum, the judgment of respondent Appellate Court, will have to be sustained not on the basis of misdelivery but on non-
delivery since the merchandise was never placed in the control and possession of Sambok, Bacolod, the vendee.
The Supreme Court affirmed the decision of the Court of Appeals.
52. ARTEMIO KATIGBAK vs. COURT OF APPEALS, DANIEL EVANGELISTA and V. K. LUNDBERG
G.R. No. L-16480 January 31, 1962

FACTS:
Artemio Katigbak upon reading an advertisement for the sale of a Double Drum Cargo Tractor Winch by V.K.
Lundberg, owner and operator of the International Tractor and Equipment Co, Ltd., went to see Lundberg and inspected the
equipment. The price quoted was P12,000.00. Desiring a reduction of the price, Katigbak was referred to Daniel Evangelista,
the owner. After the meeting, it was agreed that Katigbak was to purchase the winch for P12,000.00, payable at P5,000.00
upon delivery and the balance of P7,000.00 within 60 days. The condition of the sale was that the winch would be delivered
in good condition. Katigbak was apprised that the winch needed some repairs, which could be done in the shop of
Lundberg. It was then stipulated that the amount necessary for the repairs will be advanced by Katigbak but deductible
from the initial payment of P5,000.00. The repairs were undertaken and the total of P2,029.85 for spare parts was
advanced by Katigbak for the purpose. For one reason or another, the sale was not consummated and Katigbak sued
Evangelista, Lundberg and the latter's company, for the refund of such amount.
The lower court ruled in favor of Katigbak ordering Evangelista and Lundberg to refund P2,029.85 for the repair
costs advanced by Katigbak. This decision was reversed by the Court of Appeals as Katigbak committed a breach of contract
and should be held liable. Katigbak brought the matter to this Court on appeal by certiorari.

ISSUE:
Whether or not action of rescission is needed in an executory contract to authorize the seller to resell the goods
when the buyer fails to pay the price and take delivery.

HELD:
No. We quote from the Hanlon case:
.... In the present case the contract between Hanlon and the mining company was executory as to both parties, and the
obligation of the company to deliver the shares could not arise until Hanlon should pay or tender payment of the money.
The situation is similar to that which arises every day in business transactions in which the purchaser of goods upon an
executory contract fails to take delivery and pay the purchase price. The vendor in such case is entitled to resell the goods.
If he is obliged to sell for less than the contract price, he holds the buyer for the difference; if he sells for as much as or
more than the contract price, the breach of contract by the original buyer is damnum absque injuria. But it has never been
held that there is any need of an action of rescission to authorize the vendor, who is still in possession, to dispose of the
property where the buyer fails to pay the price and take delivery... (40 Phil. 815).
The facts of the case under consideration are identical to those of the Hanlon case. The herein petitioner failed to take
delivery of the winch, subject matter of the contract and such failure or breach was, according to the Court of Appeals,
attributable to him, a fact which We are bound to accept under existing jurisprudence. The right to resell the equipment,
therefore, cannot be disputed. It was also found by the Court of Appeals that in the subsequent sale of the winch to a third
party, the vendor thereof lost P2,000.00, the sale having been only for P10,000.00, instead of P12,000.00 as agreed upon,
said difference to be borne by the supposed vendee who failed to take delivery and/or to pay the price.
53. JULIAN BORROMEO vs. JOSE FRANCO Y FRANCO ET AL.
G.R. No. 1698. September 26, 1905

FACTS:
The Francos agreed to sell to Borromeo y Galan their property in Cebu and such agreement was executed in a
contract. In addition, Borromeo was given six months from the date of the execution of their contract to arrange and
complete the documents relating to the said property.
Borromeo filed a complaint in the Court of First Instance compelling the Francos to sell to him the property in question
under the terms of the contract. He had already taken steps to complete the documents and papers relating to the property
but he was unable to complete it. The Francos asked that the complaint be dismissed for Borromeo had failed to comply
with the condition of completing the documents and papers related to the property.

ISSUE:
Whether or not Borromeo can demand fulfilment from the Francos.

HELD:
Yes. The contract in question is a bilateral one containing mutual obligations and the fulfillment of which may be
demanded. The failure of Borromeo to complete the documents and papers related to the property is not an essential part
of the contract and cannot be an obstacle for the fulfilment thereof.
The obligation which the purchaser, Borromeo, imposed upon himself, to perfect the papers to the property within a period
of six months, is not correlative with the obligation to sell the property. These obligations do not arise from the same cause.
They create no reciprocal rights between the contracting parties, so that a failure to comply with the stipulation contained
in clause (c) on the part of the plaintiff purchaser within the period of six months provided for in the said contract, as he the
plaintiff, himself admits, does not give the defendants the right to cancel the obligation which they imposed upon
themselves to sell the two houses in question in accordance with the provisions of article 1124 of the Civil Code, since no
real juridical bilaterality or reciprocity existed between the two obligations, because the obligation to perfect the title
papers to the houses in question is not correlative with the obligation to fulfill the promise to sell such property. One
obligation is entirely independent of the other. The latter obligation is not subordinate to nor does it depend upon the
fulfillment of the obligation to perfect the title deeds to the property.

Article 1451 of the Civil Code provides as follows:

"Whenever the promise to purchase and sell can not be fulfilled, the provisions relating to obligations and contracts of this
book shall be observed by the vendor and by the vendee, as the case may be.”
54. TAN LEONCO vs. GO INQUI
G.R. No. L-3383. September 13, 1907

Facts:
In 1897, Tan Leonco went to China and prior to his departure turned over to Tan Tonguan the management of the
plantations of abaca (hemp). Tonguan worked the abaca and obtained 800 pesos worth of fiber, which he delivered and
stored, by direction of Go Inqui, in a warehouse owned by the latter in Buhang and in exchange a draft or check was
executed in payment for the abaca. The draft was later handed to Leonco upon his return from China. However, Leonco was
not able to collect the amount stated in the draft as Inqui suspended the payment of the said draft. After deposit of the
hemp and before the same was removed from the warehouse by Inqui, the warehouse and its contents were destroyed by
the insurrectos.
Inqui alleged that he never received the hemp and therefore there was no consideration for the bill of exchange. Leonco,
on the other hand, claims that when the hemp was deposited in the warehouse it became the property of Inqui and that
the latter recognized this fact when he stated in the bill of exchange that it was given for “value received”.

Issue:
Whether or not Go Inqui and its company, J.C., bear the loss of the hemp.

Held:
Yes. It is not disputed that the warehouse in which the hemp was deposited was the warehouse of the defendant. The
hemp became the property of the defendant upon the delivery thereof in the warehouse of the defendant (arts. 1462 and
1463, Civil Code), and was property of the defendant at the time of its destruction by the insurrectos. There had been a
complete delivery of the said abaca to the defendant, and the loss occurring thereafter,. without any fault of the plaintiff,
was loss of the defendant. That the delivery of the hemp as above stated was duly made to the defendant and constituted a
valuable consideration for the said bill of exchange or check.

 
55. THE ASIATIC PETROLEUM COMPANY (LTD.) vs.THE INSULAR COLLECTOR OF INTERNAL REVENUE
G.R. No. L-12687 August 27, 1918

FACTS:
The Insular Collector of Internal Revenue, under threat of penalty, compelled the Asiatic Petroleum Company to pay the
internal revenue tax provided for under section 17 (paragraph 72a) of Act No. 2432 upon all such oils which the latter had
on hand on the first day of January, 1915, whether or not the same had been sold theretofore or not. The tax was paid
under protest.
The Asiatic Petroleum Company contends that the tax collected was illegal, for the reason that the law had expressly
relieved him from the necessity of paying the same on all such oils which he had "disposed of to consumers or persons
other than manufacturers or wholesale dealers, prior to January 1, 1915"; that inasmuch as he had made a valid and legal
sale of such oils before January 1, 1915 even though the same had not been actually delivered they had been "disposed of"
and he was therefore relieved from the necessity of paying the tax imposed by said Act. No contention is made that the oils
"disposed of" had been disposed of to "manufacturers or wholesale dealers."

ISSUE:
Whether or not a dealer is required to pay the internal revenue tax, provided for under section 17, (paragraph 72a)
of Act No. 2342, upon mineral oils, but not delivered, prior to the first day of January, 1915.

HELD:
No. Merchandise may be "disposed of" even though the price has not been paid nor the same delivered. A sale
may be perfected between vendor and vendee and may be binding on both of them, if they have agreed upon the thing,
the object of the contract and the price, even though the price had not been paid nor the merchandise delivered. (Art.
1450, Civil Code.)
The Legislature, by Act No. 2445, fully recognized that the phrase "disposed of" meant nothing more or less than a contract
whereby the vendor was bound to furnish an article, because in said Act (No. 2445) it provided that "whenever any person
has prior to the enactment of this law (2432) entered into a contract whereby he has bound himself to furnish to another
an article subject to the tax or increased rate of tax . . .," the purchaser, and not the vendor, was subject to pay such tax in
the absence of stipulations to the contrary.
 
56. AUYONG HIAN (HONG WHUA HANG) vs. COURT OF TAX APPEALS
G.R. No. L-28782 November 27, 1981

FACTS:
600 hogsheads of Virginia type tobacco were stored at Customs Bonded Warehouse No. 81, operated by
Consolidated Terminals, Inc. Seizure proceedings was instituted against the tobacco as an illegal importation pursuant to
Republic Acts No. 698 and 1194. The goods were declared forfeited to the government and its sale was ordered for public
auction which the CTIP took advantage of. The Collector, through the Chairman of the Special Bidding Committee approved
the final sale subject to the condition that the balance of the purchase price in the amount of P500,000.00 should be paid
within five (5) days from receipt thereof and that the said tobacco will be released in favor of CTIP upon the posting of a
surety bond in the amount of P1,000,000.00 to guarantee CTIP's undertaking to export locally grown tobacco. Additional to
the foregoing, it is likewise incontrovertible that notwithstanding compliance by movant with all the requirements, movant
was unable to secure delivery of the tobacco purchased by it in view of the pendency of several court proceedings filed by
Auyong Hian wherein such delivery was judicially enjoined. When the last of those injunctions was lifted and before another
one could be obtained by Auyong HIan, movant demanded delivery of the tobacco but the Consolidated Terminals, Inc. (or
Luzon Stevedoring Co., Inc.) in whose warehouses the tobacco was stored refused to release the same without its being
paid the storage fees due as of then. Apprehensive that a new injunction might be secured by Auyong Hian which would
further delay its getting delivery of the tobacco, and because the Bureau of Customs could not immediately make the
corresponding payment, movant paid the Consolidated Terminals, Inc. the storage fees demanded in the amount of
P823,768.20, under an express understanding, according to movant, with the Bureau of Customs, thru then Collector of
Customs, Pedro Pacis, that the same would be refunded to it.

ISSUE:
Whether or not movant is entitled to refund to movant on advance payment made for the storage charges.

HELD:
Yes. Until after goods sold by the Bureau of Customs in an auction sale shag have been delivered either actually or
constructively to the winning bidder, ownership thereof remains with that office. Such is the unequivocal provision of
Article 1477 of the Civil Code which says, "The ownership of the thing sold shall be transferred to the vendee upon the
actual or constructive delivery thereof. " Accordingly, it is but logical and proper that, unless otherwise expressly stipulated,
all expenses incurred for the preservation and keeping or storage of the goods sold should be home by the Bureau until
their actual or constructive delivery to the buyer. Relatedly, Condition No. 8 of the Notice of Sale provides that "Storage
fees shall be imposed on article awarded but not claimed within ten (10) days from the date of approval of the sale." To Our
mind, this provision, indicates that responsibility for storage fees would pass to the buyer only upon the occurrence of the
contingency so stated and not earlier. Movant did claim the tobacco it had purchased within the ten-day period stipulated
the Bureau of Customs was the one not ready to comply.
But as between these parties, there can be no doubt that responsibility for any expenses or damages arising during the
pendency of the injunction should be the liability of the owner of the goods who is under obligation to warrant its title and
right to sell and deliver the same to the buyer free from any adverse claim.
93. BUCTON VS. GABAR
G.R. NO. L-36359, JANUARY 31, 1974

FACTS:
In 1946, Josefina bought a parcel of land fr. the Villarin spouses, payable in installments. Josefina, then entered
into a verbal agreement w/ Nicanora whereby the latter would pay 1/2 of the price (P3,000.00) & would then own 1/2 of
the land. Nicanora paid P1,000 in 1946 & P400 in 1948. Both were evidenced by receipts issued by Josefina. After payment
of the P1,000, Nicanora took possession of the portion of the land indicated to them by Josefina & built thereon a nipa
house. Subsequently, the nipa house was demolished & replaced by a house of strong materials, w/ 3 apartments for rental
purposes. In 1947, the Villarin spouses executed a deed of sale in favor of Josefina. Nicanora then sought to obtain a
separate title for their portion of the land but Josefina refused on the ground that the entire land was still mortgaged w/
the PNB as guarantee for a loan. Nicanora continued enjoying possession of their portion of the land, planting fruit trees &
receiving rentals fr. the buildings. In 1953, w/ Josefina’s consent, Nicanora had the land resurveyed & subdivided
preparatory to their obtaining separate titles thereto. A fence was thereafter erected to demarcate the division. Nicanora
continued to insist on obtaining a separate title but Josefina refused. Nicanora engaged the services of Atty. Bonifacio
Regalado, & then Atty. Aquilino Pimentel, Jr. to intercede, but to no avail. Hence, case in TC. TC rendered judgment for
Nicanora. On appeal, the CA reversed on the ground that since Nicanora’s right of action is allegedly based on the receipt
executed in 1946, the same has prescribed pursuant to Art. 1144 of the CC w/c must be brought w/in 10 years fr. the time
the right of action accrues. When the complaint was filed, 22 years & 26 days had elapsed. Hence this appeal.

ISSUE
Whether or not the action of Nicanora has prescribed.

HELD
The real & ultimate basis of Nicanora’s action is their ownership of 1/2 of the lot coupled w/ their possession
thereof, w/c entitles them to a conveyance of the property. In Sapto, et. al. vs. Fabiana, the Court, through J.B.L. Reyes,
explained that under the circumstances, no enforcement of the contract is needed, since the delivery of the possession of
the land sold had consummated the sale & transferred title to the purchaser, & that, actually, the action for conveyance is
one to quiet title, i.e., to remove the cloud upon Nicanora’s ownership by the refusal of the Josefina to recognize the sale
made. We held therein: “The prevailing rule is that refusal of the Josefina to recognize the sale made by their predecessors.
We held therein that "... it is an established rule of American jurisprudence (made applicable in this jurisdiction by Art. 480
of the New Civil Code) that actions to quiet title to property in the possession of the plaintiff are imprescriptible (44 Am. Jur.
p. 47; Cooper vs. Rhea, 20 L.R.A. 930; Inland Empire Land Co. vs. Grant County, 138 Wash. 439, 245 Pac. 14).
94. CARBONELL VS. COURT OF APPEALS, AND PONCIO
69 SCRA 99, JANUARY 1976

FACTS:
On January 27, 1955, respondent Jose Poncio executed a private memorandum of sale of his parcel of land with
improvements situated in San Juan, Rizal in favor of petitioner Rosario Carbonell who knew that the said property was
subject to a mortgage in favor of the Republic Savings Bank (RSB) for the sum of P1,500.00. Four days later, Poncio, in
another private memorandum, bound himself to sell the same property for one Emma Infante for the sum of P2,357.52,
with the latter still assuming the existing mortgage debt in favor of the RSB in the amount of P1,177.48. Thus, in February 2,
Poncio executed a formal registerable deed of sale in her (Infante's) favor. So, when the first buyer Carbonell saw the seller
Poncio a few days afterwards, bringing the formal deed of sale for the latter's signature and the balance of the agreed cash
payment, she was told that he could no longer proceed with formalizing the contract with her (Carbonell) because he had
already formalized a sales contract in favor of Infante. To protect her legal rights as the first buyer, Carbonell registered on
February 8, 1955 with the Register of Deeds her adverse claim as first buyer entitled to the property. Meanwhile, Infante,
the second buyer, was able to register the sale in her favor only on February 12, 1955, so that the transfer certificate of title
issued in her name carried the duly annotated adverse claim of Carbonell as the first buyer. The trial court declared the
claim of the second buyer Infante to be superior to that of the first buyer Carbonell, a decision which the Court of Appeals
reversed. Upon motion for reconsideration, however, Court of Appeals annulled and set aside its first decision and affirmed
the trial court’s decision.

ISSUE:
Who has the superior right over the subject property?

COURT RULING:
The Supreme Court reversed the appellate court’s decision and declared the first buyer Carbonell to have the
superior right over the subject property, relying on Article 1544 of the Civil Code. Unlike the first and third paragraphs of
said Article 1544, which accord preference to the one who first takes possession in good faith of personal or real property,
the second paragraph directs that ownership of immovable property should be recognized in favor of one "who in good
faith first recorded" his right. Under the first and third paragraphs, good faith must characterize the prior possession, while
under the second paragraph, good faith must characterize the act of anterior registration.
When Carbonell bought the lot from Poncio on January 27, 1955, she was the only buyer thereof and the title of Poncio was
still in his name solely encumbered by bank mortgage duly annotated thereon. Carbonell was not aware - and she could not
have been aware - of any sale to Infante as there was no such sale to Infante then. Hence, Carbonell's prior purchase of the
land was made in good faith which did not cease after Poncio told her on January 31, 1955 of his second sale of the same lot
to Infante. Carbonell wanted to meet Infante but the latter refused so to protect her legal rights, Carbonell registered her
adverse claim on February 8, 1955. Under the circumstances, this recording of Carbonell’s adverse claim should be deemed
to have been done in good faith and should emphasize Infante's bad faith when the latter registered her deed of sale 4 days
later.
95. BOARD OF LIQUIDATORS V JOSE ROXAS
G.R. NO. 84419 DECEMBER 4, 1989

FACTS:
Petitioner Panay Development Co., Inc. (PDCI for short) is the owner of Lot No. 3247 under TCT No. 12651. Said lot
originally belonged to Maria Roxas Lisao who assigned the same to PDCI for and in consideration of her 2,680 shares valued
at P26,800.00 as her contribution to its capital stocks. On April 12, 1940, PDCI entered into a management contract with the
National Food Products Corporation (NFPC) whereby the latter agreed to finance the construction, maintenance,
management and operation of the fishponds of PDCI and NFPC gave loans and advances necessary therefor. As security for
the payment of said loan, PDCI executed a real estate mortgage on all its properties in favor of NFPC. Among the properties
given as collateral was lot No. 3247, formerly belonging to Maria Roxas Lisao and covered by TCT No. RO-4331 (17921) of
the Register of Deeds of Capiz, which contains an annotation stating that the same was transferred and assigned in favor of
PDCI and mortgaged to NFPC. Said original certificate of title was later cancelled by TCT No. 12651 in the name of PDCI. The
NFPC was later abolished under Executive Order No. 372, series of 1950, and petitioner Board of Liquidators (Board for
short) was created to liquidate and settle its affairs and dispose of its properties. Petitioner Board agreed to assist PDCI in
ejecting the squatters. Respondent Jose Roxas was found illegally occupying said lot so petitioner PDCI demanded that he
vacate the premises but refused to do so. Jose Roxas claims that petitioners have no cause of action as he acquired the
property by legal means alleging that Maria Roxas Lisao donated the said property to her brothers and sisters and latters
subsequently sold it verbally to Jose Roxas.

ISSUE:
Whether or not Roxas has the right to the disputed property.

HELD:
No. Petitioner PDCI is therefore the absolute owner of the property. And even if, as claimed by respondent Jose
Roxas, Maria Roxas Lisao had subsequently executed a quitclaim, deed and donation of said property in favor of her
brothers and sisters who in turn allegedly verbally sold the same to respondent, such subsequent disposition is of no legal
effect whatsoever inasmuch as Maria has no more right or title whatever over the property in question to convey to her
brothers and sisters including respondent Jose Roxas. And even if it may be true that respondent Jose Roxas had been in
actual possession of the property in question for more than ten (10) years, the registered title of the petitioner PDCI over
the property cannot be lost by prescription or laches as respondent claims. Furthermore, the alleged verbal sale executed
by the donees brothers and sisters of Maria Roxas Lisao in favor of respondent Jose Roxas is also null and void not only
because they had no title to convey but also because the sale of the land, which is verbal, and the presentation of which
was timely objected to, are not enforceable under the statute of frauds. 9 It is not a valid sale, and is inadmissible in
evidence.
96. CAMPILLO V PNB
28 SCRA 220
97. RODRIGUEZ V FRANCISCO
2 SCRA 648
98. MANOTOK REALTY, INC. V COURT OF APPEALS
GR No. L-45038, April 30, 1987TOPIC:

FACTS:
Felipe Madlangawa, respondent claims that he has been occupying a parcel of land in the Clara de Tambunting de
Legarda Subdivision since 1949 upon permission being obtained from Andres Ladores, then an overseer of the subdivision,
with the understanding that the respondent would eventually buy the lot.
On April 2, 1950, the owner of the lot, Clara Tambunting, died and her entire estate, including her paraphernal properties
covering the lot occupied by the respondent were placed under
custodia legis. On April 22, 1950, Vicente Legarda, husband of Tambunting received the deposit of respondent amounting
to P1,500 for the lot. Respondent had a remaining balance of P5,700 which he did not pay or was unable to pay because the
heirs of Tambunting could not settle their differences. On April 28, 1950, Don Vicente Legarda was appointed as a special
administrator of the estate and the respondent remained in possession of the lot in question. Petitioner Manotok Realty,
Inc. became the successful and vendee of the Tambunting de Legarda Subdivision pursuant to the deeds of sale executed in
its favor by the Philippine Trust Company, as administrator of the Testate Estate of Clara Tambunting de Legarda. The lot in
dispute was one of those covered by the sale. The Deed of Sale provided for terms and conditions. Petitioner caused the
publication of several notices in the Manila Times and the Taliba advising the occupants to vacate their respective premises,
otherwise, court action with damages would follow. This includes respondent among others who refused to vacate the lots.
Trial Court dismissed the petitioner's action. CA ruled that the only right remaining to the petitioner is to enforce the
collection of the balance because accordingly, it stepped into the shoes of its predecessor (Don Vicente Legarda).

ISSUE:
Whether Don Vicente Legarda could validly dispose of the paraphernal property?

DECISION:
NO. The record does not show that Don Vicente Legarda was the administrator of the paraphernal properties of
Dona Clara Tambunting during the lifetime of the latter. Thus, it cannot be said that the sale which was entered into by the
private respondent and Don Vicente Legarda had its inception before the death of Clara Tambunting and was entered into
by the Don Vicente on behalf of Clara Tambunting but was only consummated after her death. Don Vicente Legarda,
therefore, could not have validly disposed of the lot in dispute as a continuing administrator of the paraphernal properties
of DonaClara Tambunting. Art. 136 NCC.
The wife retains the ownership of the paraphernal property. Art. 137 NCC states that the wife shall have the administration
of the paraphernal property, unless she delivers the same to the husband by means of a public instrument empowering him
to administer it. In this case, the public instrument shall be recorded in theRegistry of Property. As for the movables, the
husband shall give adequate security. The Court concluded that
the sale between Don Vicente Legarda and the private respondent is void ab initio, the former being neither an owner nor
administrator of the subject property. Such being the case, the sale cannot be the subject of the ratification by the
Philippine Trust Company or the probate court. As was held in the case of Arsenal v. Intermediate Appellate Court (143
SCRA 40, 49):
Under the provisions of the Civil Code, a void contract is inexistent from the beginning. It cannot be ratified neither can the
right to set up the defense of its illegality be waived. (Art. 1409, Civil Code. No sale of any property of an estate of a
decedent is valid unless made under order of the probate court. ...
From the foregoing, it cannot be denied that the law recognizes the issuance of an order of sale as an indispensable
requisite in effecting a valid sale of the property of a decedent's estate.