Nool v.

Court of Appeals
G.R. No. 116635
July 24, 1997

Doctrine: 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.

Nature of the case: Petition for review on certiorari assailing the January 20, 1993 Decision of Respondent Court of Appeals
in CA-G.R. CV No. 36473, affirming the decision of the trial court.

Petitioners: Spouses Conchita Nool and Gaudencio Almojera

FACTS:
2 parcels of land situated in San Manuel, Isabela are in dispute and litigated upon here. The first was formerly owned by
Victorino Nool and the other by Francisco Nool. The plaintiff spouses, Conchita Nool and Gaudencio Almojera, seek recovery of
the aforementioned parcels of land from the defendants, Anacleto Nool and Emilia Nebre.
Plaintiff Allegations: they are the owners of subject parcels of land
o they bought the 2 lands from Conchitas other brothers, Victorino and Francisco Nool
o as plaintiffs were in dire need of money, they obtained a loan from Development Bank of the Philippines (DBP) 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 that time
o for the failure of plaintiffs to pay the said loan, including interest and surcharges totaling P56,000.00, the mortgage was
foreclosed
o within the period of redemption, plaintiffs contacted Anacleto to redeem the foreclosed properties from DBP, which the
latter did; as a result, the titles of the 2 lands were transferred to Anacleto
o as part of their arrangement/understanding, Anacleto agreed to buy from Conchita the lands for a price of P100,000, and
upon payment of the balance of P14,000, plaintiffs were to regain possession of the two (2) hectares of land
o on the 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 plaintiffs have the necessary amount
o the defendants failed to pay and so the plaintiffs asked them 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
to come to court for relief
Defendants theory: they acquired the lands from DBP through negotiated sale, and were misled by plaintiffs when 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.
Authorized officer of DBP: Manuel S. Mallorca certified that the one-year redemption period of the mortgagors Conchita
Nool and husband was not exercised. Hence, DBP became the absolute owner of said parcels of land for which it was issued
new certificates of title. About two years thereafter, DBP entered into a Deed of Conditional Sale involving the same parcels of
land with Anacleto Nool. Subsequently, the latter was issued new certificates of title.
The lower court adjudged 2nd Agreement as an option to sell not binding upon and considered the same validly withdrawn by
defendants for want of consideration.
Court of Appeals affirmed the rule of the lower court.

ISSUES:
1. WON the 2 documents (Deed of Sale & Deed of Repurchase) are valid & enforceable. NO. MAIN!
2. WON Anacleto Nool is estopped in impugning the validity of the contracts. NO.
3. WON the trial court erred in ordering the petitioners to (a) return the sum of P30,000 to respondents when allegedly it was
them who owed the plaintiffs a balance of P14,000.00 and (b)pay rent when they were allowed to cultivate the said two
hectares. NO.

HELD:
1. The principal contract of sale contained in Exhibit C and the auxilliary contract of repurchase in Exhibit D are both void.
2. Respondents cannot be estopped from raising the defense of nullity of contract.
3. The ruling of the trial court is correct.

RATIONALE:

#1 MAIN!
FACTUAL CONSIDERATIONS: Exhibit C was a private handwritten document labeled by the parties as Resibo ti Katulagan or
Receipt of Agreement, wherein the petitioners appear to have sold to respondents the parcels of land. On the other hand,
Exhibit D was also a private handwritten document in Ilocano and labeled as Kasuratan, wherein respondents agreed that
Conchita Nool can acquire back or repurchase later on said land when she has the money.
 Conchita and his 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 stipulation shall control. HOWEVER,
Article 1370 of the Civil Code is applicable only to valid and enforceable contracts.
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.
o 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 Code. Moreover, the Civil Code itself recognizes a sale where the
goods are to be acquired 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. [eto yung line na nasa syllabus]
o 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 (the 1st contract: Exhibit C, sale 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.
On the other hand, Exhibit D presupposes that petitioners could repurchase the property that they sold to private
respondents.
o 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 as above,
void.
o Moreover, 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.

#2
Petitioners argue that when Anacleto Nool took the possession of the two hectares, and let the other two hectares to be
occupied and cultivated by plaintiffs, Anacleto cannot later on disclaim the terms or contions agreed upon and his actuation is
within the ambit of estoppel.
This argument is incorrect. 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 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. A contract void at inception cannot be validated
by ratification or prescription and certainly cannot be binding on or enforceable against private respondents.

#3
The balance of P14,000 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.
In the same vein, petitioners possession and cultivation of the two hectares are anchored on private respondents tolerance.
Clearly, the latters tolerance ceased upon their counterclaim and demand on the former to vacate. Hence, their right to
possess and cultivate the land ipso facto ceased.

DECISION: WHEREFORE, the petition is DENIED and the assailed Decision of the Court of Appeals affirming that of the trial court
is hereby AFFIRMED.