Nool Vs CA

10/6/2020 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 of Article 1409 of the Civil
Code: “Those which contemplate an impossible service.” Article
central.com.ph/sfsreader/session/00000174fccf4474cd938cf6003600fb002c009e/t/?o=False 1/16
______________
* THIRD DIVISION.
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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
151
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

1
for review on certiorari assailing
2
the January 20, 1993 Decision of
Respondent 3Court of Appeals4 in CA-G.R. CV No. 36473,5 affirming
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
6
6
defendants failed to pay, and the same day the said arrangement was made;
7
another covenant was entered into by the parties, whereby defendants
agreed to return to plaintiffs the lands in question, at anytime the latter have another covenant was
the necessary amount; that plaintiffs asked the defendants to return the same entered into by the
parties, whereby
but despite the intervention of the Barangay Captain of their place, defendants agreed to
defendants refused to return the said parcels of land to plaintiffs; thereby return to plaintiffs
the lands in question,
impelling them (plaintiffs) to come to court for relief. at anytime the latter
In their Answer, defendants-appellees theorized that they acquired the have the necessary
amount.
lands in question from the Development Bank of the Philippines, through
negotiated sale, and were misled by plaintiffs when defendant Anacleto Plaintiffs demanded the
return, however despite
Nool signed the private writing, agreeing to return subject lands when the intervention of the
plaintiffs have the money to redeem the same; defendant Anacleto having Barangay captain,
defendant refusd to
been made to believe, then, that his sister, Conchita, still had the right to return. Thereby the
redeem the said properties. plaintiffs filed a case
for relief.
The pivot of inquiry here, as aptly observed below, is the nature and
significance of the private document, marked Exhibit ‘D’ for plaintiffs, defendants theorized
that they acquired the
which document has not been denied by the defendants, as defendants even lands in question from
averred in their Answer that they gave an advance payment of P30,000.00 the Development Bank of
the Philippines,
therefor, and acknowledged that they had a balance of P14,000.00 to through negotiated
complete their payment. On this crucial issue, the lower court adjudged the sale,
said private writing (Exhibit ‘D’) as an option to sell not binding upon and misled by plaintiffs
considered the same validly withdrawn by defendants for want of when anecleto signed
the private writing
consideration; and decided the case in the manner abovementioned. agrreeing to the
There is no quibble over the fact that the two (2) parcels of land in subject lands.
dispute were mortgaged to the Development Bank of the Philippines, to For the non-payment of
secure a loan obtained by plaintiffs from DBP (Ilagan Branch), Ilagan, said loan, the mortgage
was foreclosed and in
Isabela. For the non-payment of said loan, the mortgage was foreclosed and the process, ownership
in the process, ownership of the mortgaged lands was consolidated in DBP of the mortgaged lands
was consolidated in
(Exhibits 3 and 4 for defendants). After DBP became the absolute owner of DBP.
the two parcels of land, defendants negotiated with DBP and succeeded in
After DBP became the
absolute owner of the
two parcels of land,
_______________
defendants negotiated
with DBP and succeeded.
6 Exhibit C, executed in the parties’ native dialect, Ilocano, dated November 30, 1984,
Record of the Regional Trial Court, p. 95. By virtue of sale by
the DBP, the title
7 Exhibit D, executed in the parties’ native dialect, Ilocano, dated November 30, 1984, under the DBP were
Record of the Regional Trial Court, p. 97. cancelled and issued to
the defendsnts.
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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
8
Title (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 right of
9
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, 1983 by the
10
Registry of Deeds for the Province of Isabela. About two years
thereafter, on April 1, 1985, DBP entered into a Deed of Conditional
11
Sale involving the same parcels of land with Private Respondent
Anacleto Nool as vendee. Subsequently, the latter was issued new
12
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
15
back or 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.
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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
16
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.”
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 Exhibit17
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.”
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 DBP. Thus, such contract may be
20
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 consequence acquire no more
21
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 private respondents had acquired
22
22
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 NOOL

23
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)
161
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
24
cannot bind 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 to repurchase on (1) Sec. 119
25
of the Public Land Act and (2) an implied trust relation as “brother
26
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 lands within the family
27
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 to barter away what
29
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 be binding on or enforceable
30
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
31
rent when 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 the latter without just or legal ground,
32
shall return the same.” Thus, if a void contract has already “been
33
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’
34
demand 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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10/6/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 276

VOL. 276, JULY 24, 1997 149

CONCHITA NOOL and GAUDENCIO ALMOJERA, petitioner, vs.

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

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 to buy or

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

VOL. 276, JULY 24, 1997 151

Nool vs. Court of Appeals

PETITION for review on certiorari of a decision of the Court of

The facts are stated in the opinion of the Court.

152 SUPREME COURT REPORTS ANNOTATED

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

A contract of repurchase arising out of a contract of sale where the

Statement of the Case

This postulate is explained by this Court as it resolves this petition

“WHEREFORE, judgment is hereby rendered dismissing the complaint for

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

1 Rollo, pp. 20-25.

VOL. 276, JULY 24, 1997 153

Nool vs. Court of Appeals

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

The Antecedent Facts

The facts, which appear undisputed by the parties, are narrated by

154 SUPREME COURT REPORTS ANNOTATED

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

VOL. 276, JULY 24, 1997 155

It should be stressed that Manuel S. Mallorca, authorized ofﬁcer of

“WHEREFORE, ﬁnding no reversible error inﬁrming it, the appealed

Petitioners impute to Respondent Court the following alleged

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 no binding

The Court’s Ruling

The petition is bereft of merit.

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 parcels of

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

158 SUPREME COURT REPORTS ANNOTATED

19 Article 1402, Civil Code.

VOL. 276, JULY 24, 1997 159

Nov. 30, 1984

160 SUPREME COURT REPORTS ANNOTATED

Sgd EMILIO PARON

Sgd CONCHITA NOOL

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

23 Records, p. 98. The original document in Ilocano reads as follows:

Nov. 30, 1984

VOL. 276, JULY 24, 1997 161

to repurchase” ancillary and incidental to the contract of sale; rather,

24 206 SCRA 52, 60-61, February 7, 1992.

162 SUPREME COURT REPORTS ANNOTATED

Right to Repurchase Based on

25 Memorandum, p. 12; rollo, p. 56.

VOL. 276, JULY 24, 1997 163

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