HEIRS OF AMPARO DEL ROSARIO v. AURORA SANTOS G.R. No. L-46892 September 30, 1981 GUERRERO, J.: Facts: Amparo Del Rosario entered into a contract with Attorney Andres Santos and his wife Aurora Santos whereby the latter sold to the former a 20,000 sq. m. of land which is to be segregated from Lot 1. Said lot forms part of the several lots belonging to a certain Teofilo Custodio, of which lots, Attorney Santos, by agreement with the latter, as his attorney’s fees, owns ½ interest thereof. Parties agreed that spouses Andres shall thereafter execute a Deed of Confirmation of Sale in favor of Del Rosario as soon as the title has been released and the subdivision plan of said Lot 1 has been approved by the Land Registration Commissioner. Due to the failure of spouses Andres to execute the deed after the fulfillment of the condition, Del Rosario claims malicious breach of a Deed of Sale. Defendant thereafter filed a motion to dismiss setting up the defenses of lack of jurisdiction of the court over the subject of the action and lack of cause of action as well as the defense of prescription. They further alleged that the deed of sale was only an accommodation graciously extended, out of close friendship between the defendants and the plaintiff, hence, tantamount to waiver, abandonment or otherwise extinguishment of the demand set forth in the complaint. Finally, defendants alleged that the claim on which the action or suit is founded is unenforceable under the statute of frauds and that the cause or object of the contract did not exist at the time of the transaction. The lower court resolved to deny the motion to dismiss. After actions by respective parties, the lower court ordered the defendants to execute and convey to plaintiff the 20,000 sq. m. of land to be taken either from Lot 4 or from Lot 5-A of Custodio’s lots, which defendants own ½ interest thereof. Aggrieved by the aforesaid decision, the defendants filed an appeal with the Court of Appeals which certified the records of the case to the Supreme Court for final determination. Issue: Whether the sale is valid as to the cause or object of the contract. Held: The judgment appealed from is hereby affirmed in toto, with costs against the appellants. Supreme Court held that the execution of the deed of sale is valid notwithstanding the lack of any title to the lot by appellants at the time of execution f the deed of sale in favor of appellee as there can be a sale of an expected thing in accordance with Article 1461 of the New Civil Code: Art. 1461. Things having a potential existence may be the object of the contract of sale. The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the thing will come into existence. The sale of a vain hope or expectancy is void. The case at bar is not a case of a vain hope or expectancy which is void under the law. The expectant right came into existence or materialized for the appellants actually derived titles from Lot I which subsequently became the object of subdivision. JOSE M. JAVIER and ESTRELLA F. JAVIER vs. COURT OF APPEALS and LEONARDO TIRO GR No. 48194 March 15, 1990 Regalado, J.: FACTS: Leonardo Tiro executed a Deed of assignment concerning his shares of stock in Timberwealth Corporation on Feb. 15, 1966 in favor of spouses Jose and Estrella Javier and for the amount of P 120,000. Spouses paid P 20,000 as
initial payment and the balance to be paid in instalments as agreed. The parties entered into another deed on Feb. 28, 1966 for the addt’l forest concession, subject of a pending application, adjoining the area covered in the first deed. As agreed, the payment therefor of P 30,000 shall be paid as soon as the application is approved. On Nov. 18, 1966, the Dir. of Forestry directed a consolidation for the renewal of the concession. By virtue of the deed, spouses Javier consolidated with the other adjoining concessionaires.On July 16, 1968, Tiro filed a complaint for failure of the spouses to pay the remaining balance.Spouses filed their answer arguing therein the nullity of the deeds and the return of the payments made by them. It appeared in record that the Timberwealth Corporation was a non-existent organization.The trial court dismissed the complaint hence, Tiro appealed to CA. CA reversed the judgment. Petition to review filed with SC. ISSUE: W/N THE TWO DEEDS ARE NULL AND VOID, THE FORMER FOR TOTAL ABSENCE OF CONSIDERATION AND THE LATTER FOR NON-FULFILLMENT OF CONDITIONS. Held: As found by the Court of Appeals, the true cause or consideration of said deed was the transfer of the forest concession of private respondent to petitioners for P120,000.00. The aforesaid contemporaneous and subsequent acts of petitioners and private respondent reveal that the cause stated in the questioned deed of assignment is false. It is settled that the previous and simultaneous and subsequent acts of the parties are properly cognizable indica of their true intention. The deed of assignment of February 15, 1966 is a relatively simulated contract which states a false cause or consideration, or one where the parties conceal their true agreement. A contract with a false consideration is not null and void per se. Under Article 1346 of the Civil Code, a relatively simulated contract, when it does not prejudice a third person and is not intended for any purpose contrary to law, morals, good customs, public order or public policy binds the parties to their real agreement. As to the 2nd agreement or assignment, the spouses are not liable under such, as the suspensive condition, which is the approval of the additional license, did not take place. Thus, it did not give rise to any obligation. The said agreement is a bilateral contract which gave rise to reciprocal obligations, that is, the obligation of private respondent to transfer his rights in the forest concession over the additional area and, on the other hand, the obligation of petitioners to pay P30,000.00. The demandability of the obligation of one party depends upon the fulfillment of the obligation of the other. In this case, the failure of private respondent to comply with his obligation negates his right to demand performance from petitioners. Delivery and payment in a contract of sale, are so interrelated and intertwined with each other that without delivery of the goods there is no corresponding obligation to pay. The two complement each other. Moreover, under the second paragraph of Article 1461 of the Civil Code, the efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the thing will come into existence. In this case, since private respondent never acquired any right over the additional area for failure to secure the approval of the Bureau of Forestry, the agreement executed therefore, which had for its object the transfer of said right to petitioners, never became effective or enforceable.