SUBJECT MATTER One of the elements of sale is the subject matter.

Actually, you can say that the subject matter is the essence of the sale. Why? When you go back to the definition of the sale we're talking about, transfer of ownership of property or agreement to transfer for a price paid or a promise to be paid is the essence of a sale. If you remember we had discussed the case before in the basic principles yung case ng POLYTECHNIC UNIVERSITY, The SC Held that the definition of a contract of sale is a catch all provision which effectively brings within its grasp a whole gamut of transfers whereby the ownership of a thing is ceded for a consideration. Now when we talekd about consent, we said that it has to be voluntary and intelligently given. How about when it comes to subject matter? Take note that for a valid subject matter in the contract of sale, it must be: 1.) Existing, future or subject to a resolutory condition When we say that it must be existing, future or subject to a resolutory condition, it must be within the commerce of men. It must not be impossible whether by nature or law or absolute or relative subject impossibility. Take note impossibility is different from mere difficulty, in other words, law school is difficult but is not impossible (JOKE) 2.) It must be licit Licit, of course we are talking about legal, must not be contrary to law, morals and public policy or order. 3.) It must be determinate or determinable Determinate as to its kind or determinable without need of any document. Essentially if any of these three is not present in the Subject matter of the contract of sale, then there is no contract of sale to speak of, In other words kung walang contract of sale, you cannot seek specific performance. You cannot seek damages for breach of contract because there is no contract. But you can recover for unjust enrichment in case nakabayad ka na tapos it is subsequently determined that the subject matter is not valid.

made determinate without the necessity of a new or further agreement between the parties. Let's fully discuss first Number 1: Existing Future or Contingent. We're talking about a subject matter which is possible, a possible thing. Art. 1462. The goods which form the subject of a contract of sale may be either existing goods, owned or possessed by the seller, or goods to be manufactured, raised, or acquired by the seller after the perfection of the contract of sale, in this Title called "future goods."

Sale must be existing. The goods must be existing and owned or possessed by the seller, yet to be manufactured, raised or acquired by the seller can be a valid subject matter in a contract of sale. So, kahit inexistent pa yan siya ngayon, it is possible that the subject matter can still be considered as valid for a conrtact of sale to be perfected. Now, we have to take note of this existence of this subject matter. Wherein you have the concept of Emptio Rei Speritei and Emptio Spei. What's the distinction between these two concepts? Emptio Rei Speritei: It involves a thing which have potential existence. Emptio Spei: It is merely a sale of a hope or expectancy. Sibal Vs Valdez What is involved in this case is an Emptio Rei Speritei. What is the subject matter here? Why is there an issue as to the validity of the subject matter? In other words, the sugar cane is only a possible existence, we're talking about the possibility of existence. Was there a valid sale? Yes, there was. How about in relation to the sale, what was the ruling of the SC having pending crops as a subject matter. The SC said that a vaild sale can be had on a subject matter which is not existing but is certain to exist. So you have here an emptio rei speritei subject matter pending crops of potential existence. Again a valid sale may be made on a thing which though may not be actually in existence is reasonably certain to come into existence as the natural increment or usual incident of something already in existence, and then belonging to the vendor, and then title will vest in the buyer the moment the thing comes into existence. If you read the case, there are a lot of example like the sale on a wine that the vineyard is expected to produce or the grain that the field may grow at a given time. Even the milk, the wool a sheep may produce Whatever may be taken as the next catch of the fisherman, fruits to grow, the animals and the like. What is important is that it must be specified and identified and again as we mentioned before, this subject must be owned at the time of delivery or consummation stage. So, pending crops which have potential existence may be the valid subject matter of sale and may be dealt with separately with the land in which they grow. Now, why was it important for this case to determine the status of the growing crops? I presumed that you discussed this one under your property law. It is important to determine whether the growing crops is personal or real property

Articles covering Elements of the Subject Matter. Art. 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. Art. 1460. A thing is determinate when it is particularly designated or physical segregated from all other of the same class. The requisite that the term is determinate is satisfied if at the time the contract is entered into, the thing is capable of being

because if it is personal, then it is generally not subject to redemption. Real property lang ang subject to redemption. Now, How about in the case of: Pichel vs Alonzo What is the subject matter here? So, Was it a valid subject matter for a valid contract of sale? In this case the SC said that it was valid. Now, this was also discussed in this case, the subject matter with a potential existence can give rise to a valid contract of sale. However, there is also an issue as to it being a valid subject matter in the context that was the sale considered as a legal sale? Why was it important to determine whether there was a valid deed of sale? What was the issue really why was it mentioned? SO, again you have here an emptio rei speritei subject matter. The fruits of the coconut trees. It is considered as a determinate thing having a potential existence which may be the object of a contract of sale. Also take note that this sale was in relation to RA 477 which prohibits the alienation and disposition of the natural or industrial land. What the law expressly disallows is the encumbrance or alienation of the land itself or any of the permanent improvements thereon. Yung coconut trees, these are fruits meant to be gathered from the trees and therefore they can be disposed by the owner of the land and is not in violation of RA 477. Emptio rei speritei covers a contract which includes future things and subject to a suspensive condition that the subject matter that will coem into existence. What happens when the subject matter does not come into existence. Remmeber we are taking up a thing with a potential existence, the contract will be extinguished as soon as the time expires or it has become indebatable that the event will not take place. How is it different with emptio spei? it was also mentioned in 1461, the efficacy of a sale of a mere hope or expectancy is subject to the condition that the thing will come into existence. Ang emptio rei speritei is a subject matter with potential existence. Ang emptio spei on the other hand is the sale of a vain hope or expectancy. That type of sale is void. What would be an example? For example, yung lotto, everyday 9pm ang draw. Now what if you purchased a lotto ticket now. Uy tama ang number pero kahapon pa pala yun na draw. What happened there? That is a sale of a vain hope or expectancy. Ngayon mo binili, wala ka talagang pag-asa, vain ang hope mo. What do you have there? a void sale. It is different from the sale of a lotto which is valid. Bili ka ngayon, mamayang 9pm ang draw. valid yan siya na sale. So, you have to distinguish yung sale of a thing having potential existence and yung sale of a vain hope or expectancy. Which is void. So, sale of an expected thing which is emptio rei sperite subject to the condition that the thing will exist if it does not there is no contract. There is uncertainty with regard to the quality and quantity of a thing and the object is a future thing. Sale of a mere hope or expectancy, the sale is the hope itself. You purchase a lottery ticket today for the draw later 9pm. There is a sale even if the thing does not come into existence. In other words pag natalo ka, hindi ka man pwede magbalik dun sa tindera para bawiin mo. Kung potential existence kung hindi nag come into existence yung fruits or crops, what will happen? walang contract, subject siya sa condition. Object dun is future thing.

Bili ka ng ticket naguon para sa 9pm na draw ngayon o bukas ang object doon ay yung hope mo which is expectancy which is a present thing. But then if the subject matter is a vain hope or expectancy then it is considered as void. Now, we also mentioned the sale of future goods as discussed in 1462.After the perfection of the contract of sale, we have a sale of a future good, manufactured or raised, may still be a valid subject matter of a contract of sale. It may be subject to a condition which may or may not happen.

How about sale of things in litigation. You have 1491: Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another: (1) The guardian, the property of the person or persons who may be under his guardianship; (2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given; (3) Executors and administrators, the property of the estate under administration; (4) Public officers and employees, the property of the State or of any subdivision thereof, or of any government-owned or controlled corporation, or institution, the administration of which has been intrusted to them; this provision shall apply to judges and government experts who, in any manner whatsoever, take part in the sale; (5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession. (6) Any others specially disqualified by law. Those not covered, you can go back to your oblicon 1381 par 4 rescissible contracts (4) Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority; Article 1385 (2) Neither shall rescission take place when the things which are the object of the contract are legally in the possession of third persons who did not act in bad faith. In other words innocent purchasers for value. Now can there be a valid conrtact of sale wherein the thing is subject to a resolutory condition? YES Under 1465. Art. 1465. Things subject to a resolutory condition may be the object of the contract of sale.

What would be an example is redemption. When we get to discuss redemption, pero karamihan sa cred trans when you have the concept of legal or conventional redemption. What will happen if there is a purchase and there is a right to redeem the property within 1 year from the date of purchase. The sale is already perfected and that is valid. But the original owner is given 1 year to redeem to repurchase the property. What you have there is a resolutory condition dependent upon the original owner to purchase it. valid pa rin yung sale and subject to a resolutory condition.

Another instance wherein a sale is subject to a resolutory condition is the concept of reserva tronchi in your succession. The subject matter may be existing, future or again based on a contingency. Again what we are talking about is future thing, a possible thing. Do not just view it merely to the physical existence. Check if science and technology will allow the subject matter to come into existence. Do not say I will sell it to you the fountain of youth ,forever 21 ka pero ginagawa ko pa ngayon, hindi pa tapos. Yan impossible yan hindi yan of potential existence. When we talk about future thing or potential existence again it is one which science and technology will allow to exist. We have a thing subject to a resolutory condition, it is a valid subject matter. 2.) Sale must be licit Now we go to the 2nd requisite or element for a valid subject matter wherein it must be licit. It is something within the commerce of man, it must be sold or the object of a contract.

So what are the instance wherein there can be no valid subject matter because the subject matter is outside the commerce of man. All kinds of interests, things, interest of the nation or things which is restricted by law or stipulation which parties cannot modify. You cannot sale your service for perpetual service being involuntary servitude being unconsti. your personal right cannot be a valid subject matter of a contract of sale. Ayaw mo na sa asawa mo, ibenta mo na nag right na pagiging asawa. Pwede ba yun? hndi? Right to vote, status, capacity, honorary titles, political rights or public qualifications, public offices. Property that pertain to the public dominion belonging to the state.

Others that are not transmissible by stipulation of parties and by reason of provision of law. Contracts of agencies and partnership, these are the contracts based on trust and confidence. Your right as a partner cannot just be sold or cannot be subject matter in a contract of sale.

Licit, it must not be contrary to law, moral, good customs, public order or policy. Things prohibited by law such as narcotics, dangerous drugs, wild birds, mammals, plants. example yung tuko. Poisonous plants or fruits, explosive firearms or ammunitions as prohibited by law.

1347 tells us that No contract may be entered into upon future inheritance except in cases expressly authorized by law. Why is that? The succession must have been opened at the time of the contract. What opens succession The death. this is an exception of future things. Impossible things or services cannot be the object of a contract. Art. 1348. Impossible things or services cannot be the object of contracts. Martinez vs Court of Appeals Is the sale valid? But wasnt the river portion included in the title that was issued? if there is a title, then there must have been a valid sale. We have here a river. In property, river is outside the commerce of man and therefore not subject to private appropriation. Take note in this case there as an issuance of certificate of title under the Torrens system covering the river but it doesnt make the possessor a true owner of all the property described therein. If a person obtains a title under the Torrens system, rivers cannot be registered under the system. By virtue of the certificate alone, he does not become the owner of the river being included. When you talk about Land titles, you do not become the owner kasi sa yo na yung title, it is merely an evidence of ownership. May subsequent sale ba, valid sale, donation or prescription that happened which entitled you for that Torrens ceritifcate. But Torrens title per se does not transfer ownership to you. therefore even if the river is included there, it is a property of public domain and is not capable of private appropriation. It cannot be even acquired by prescription. The sale cannot be availed of against the law.

Art. 1347. All things which are not outside the commerce of men, including future things, may be the object of a contract. All rights which are not intransmissible may also be the object of contracts. No contract may be entered into upon future inheritance except in cases expressly authorized by law.

All services which are not contrary to law, morals, good customs, public order or public policy may likewise be the object of a contract.

Alright, which may be the objects of contracts? All things not outside the commerce of man, in other words, it may still include future things even if they do not yet belong to the obligor at the time of the perfection of the contract. It may be conditional and it may be aleatory.

Aleatory contract: Lottery ticket na mamayang 9pm ang draw. This concept of aleatory is an exception sa commutative character of the contract of sale. Magkano ba ang lotto ticket? About 20 pesos magkano mapanalunan mo? Millions. Yung aleatory concept is valid.

Heirs of Arturo Reyes Vs Beltran What was provided in the Contract to sell? Is it essential that the seller be the owner of the property for the sale to be perfected? Was there a valid sale? What type was contract was entered into? Now in this case, there was this document contract to sell wherein it provides that the seller there that "I am one of the co-heirs of the deceased and that I am to inherit a substantial portion of the lot" He was not yet the owner of the property and was merely expecting to inherit the same as his share. Take note here, namatay na yung kanyang mother, but wala pang division of property that this specific property will go to him that he will be the one to inherit it. Therefore there is a condition upon payment that Miguel would actually inherit and become the owner of the said property. Now take note however when we're talking about ownership it is not a requirement at the time of perfection of the contract of sale, it is required at the time of delivey. Here the vendor must have ownership of the property at the time he delivered pero dito miguel was not the owner of the property, he was just expecting to inherit it. Walang delivery, walang transfer of ownership.

girlfriend or the spouse, the foreigner cannot question na pera nya ang gnamit doon. Take note 1416 cannot be applied when the agreement is not illegal per se. The prohibition is designed for the protection of the plaintiff. We are talking about public policy, you cannot recover what has already been delivered. 22 is also not applicable, an action for every person who for an act or performance of another at the expense of another shall return to him is not applicable to him since the action is prohibited by the constitution and is under the pari delicto. if you are a foreigner you take the risk of getting into this kind of contract. Especially in this case, alam nya na hindi pwede bakit pa siya mag insist na kunin for reimbursement. he cannot say that Im just getting the equivalent value of the property which was obtained thereto, Im not acquiring the property per se yun ang nakalagay sa constitution but you cannot be contrary to the constitution. That is the case for foreigners, they cannot acquire land of public domain and also disqualified for private lands. Exception is yung condo units. 3.) Determinate or at least determinable Art. 1460. A thing is determinate when it is particularly designated or physical segregated from all other of the same class. The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the thing is capable of being made determinate without the necessity of a new or further agreement between the parties. it provides us two test for the thing to be considered as determinate: 1.) Capacity to segregate test: wherein the subject matter can be physically segregated or separated from all others of the same class. 2.) No further agreement test: At the time that the contract is entered into, the thing is capable of being determined without the necessity of a new or furthrer agreement between the parties. For a determinate thing, we have discussed this in Oblicon, you have specific and generic. Does it mean that determinate thing, you cannot sell generic object? pwede pa rin. What we are talking about is that it must be determinate or at least determinable. kasi yung generic at least determinable subject matter. Art. 1463. The sole owner of a thing may sell an undivided interest therein. So, here you are talking about co-ownership. Two persons owning a parcel of land. 1/2 portion thereof, which half, undetermined kasi undivided. But the co owners can sell his undivided interest to another person. Pwede yun. Art. 1464. In the case of fungible goods, there may be a sale of an undivided share of a specific mass, though the seller purports to sell and the buyer to buy a definite number, weight or measure of the goods in the mass, and though the number, weight or measure of the goods in the mass is undetermined. By such a sale the buyer becomes owner in common of such a share of the mass as the number, weight or measure bought bears to the number, weight or measure of the mass. If the mass contains less than the number, weight or measure bought, the buyer becomes the owner of the

Tanedo vs CA (Take note of this) In other words, you cannot ratify a void contract. Future inheritance cannot be a valid subject matter in a contract of sale. The affidavit of conformity subsequently executed is useless and suffers the same infirmity because it cannot ratify a void sale. Take note of this case as we go on because this deals with double sale. we get to discuss this in article 1544. The rule, one who registers the sale has a preferred right over the one who did not even if the latter is i n actual possession of the property .

Frenzel vs Catito Can he demand reimbursement for the value of the property on the basis of unjust enrichment? Principle of unjust enrichment cannot be applied to this case. Now there was a discussion here regarding contracts that are illegal per se as provided in Article 1416. Art. 1416. When the agreement is not illegal per se but is merely prohibited, and the prohibition by the law is designated for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered.

What do you mean by illegal per se? So here the in pari delicto was applied. Remember one who loses his money or property by knowingly engaging in a contract or transaction which involves his own moral turpitude and transactions in violation of the consitution are considered as null and void ab initio. Again, this is common. You can see cases like this. You have a husband or wife who is a foreigner and then they cannot own the properties they will have it named to their Filipino partner, pag magbulag, what will happen, the property is in the name of the partner, the

whole mass and the seller is bound to make good the deficiency from goods of the same kind and quality, unless a contrary intent appears. For example, share of undivided share in mass. For example you have 1000 sacks of rice in warehouse. You intend to sell it, 250 sacks of rice in my warehouse right now. You have there an undivided share in mass. What will happen? asan doon sa shares of rice sa warehouse ang 250 sacks sa share. Hindi mo masabi kung sa taas o baba, What does the buyer have? 1/4 of the undivided. 25% of the 1000 sacks of mass na nandun sa warehouse may interest si buyer. Now what happens if it turns out na sacks of rice in the warehouse is 200 sacks but the subject matter is 250? The buyer will have the whole right to the 200 and the seller is obliged to make good the deficiency. From goods of the same kind of quality. That is what article 1464 tells us. Why do we have to discuss undivided share, interest or sale of a generic thing with regard to laws? Remember the principle genus never perishes. If the subject is the generic thing, then the obligation to deliver still exists. The obligation to deliver the subject matter can be complied when the subject matter has been made determinate. Before such time even the risk of loss over the subject matter does not arise because generic objects are never lost. If it is determinate, then you can compel delivery and specific performance. 1166: accessions and accessories. Since determinate na yung subject matter then you can also determine ano yung accession and accessories included in the contract of sale. If it is determinate, you can demand for damages, fraud, breaches for delay. If it is a determinate thing and is lost by any fault of the parties then the obligation to deliver is distinguished. But if it is generic, the obligation to deliver will continue to exist. Determinable subject matter: It is a generic object not yet physically segregated or particularly designated at the point of perfection. Nevertheless, it is a valid subject matter. Determinable when a perfection agreement included a formula can be used by the courts to establish the subject matter upon which the obligation can be enforced without needing to get back to any or anyone or both the parties of the object of their intention. Melliza vs City of Iloilo The test used here is the No further agreement test because it was determinable without entering a new agreement of the parties. The subject matter can be determined nevertheless. The description therein is sufficient to provide a basis for the determination of the subject matter because the area needed under the Arellano plan was then known. It could be determined how much is the land needed for the construction. The sale was nevertheless considered as valid having a determinable subject matter. Heirs of San Andres vs Rodriguez Why was there an issue on the subject matter of the contract? You mentioned earlier that there was a receipt that has been issued. So since there was a receipt, then there was a valid sale? Why was there an issue? There was a receipt of the sum of 500 php issued. Again there was no reference to a specific number. Ang nakalagay lang doon ay advanced payment for the residential lot adjoining his previously paid lot. So what do we have here? Since the lot

subsequently sold is said to adjoin the previously paid lot, it is capable of being determined without the need of any new contract. Therefore there was a determinable subject matter. With regard to the survey, it was not subject to the condition for the perfection of the sale. Since it can already be determined by the statement of the acknowledgement receipt what is the subject matter thereof. Yung metes and bounds lang naman ang kelangan idetermine for titling purposes for the certifcate of title. there was no necessity of a new and further agreement of the parties. There was already a meeting of the minds on the subject matter therefore there is a perfected contract of sale.

Atilano vs Atilano Was the subject matter here valid? Yes. How about the fact that the description of the sale was not in consonance with the property in their respective possessions? What do you determine regarding the subject matter? The intention of the parties. In this case, either bungol or bisaya ang nagtype, imbes A, E iya natype. ganon ang nangyari. nagkamali. However, the deed of sale was executed that way, wrong designation of the lot but that does not vitiate the sale because the parties saw the actual setting, metes and bounds of the land. They have been in possession of the subject property. The test is the meeting of the minds of the parties and not the covering deed of sale or any document in relation thereto, not that was erroneously described in the deed. Yu Tek vs Gonzales What do you mean by an executory contract as distinguished from a contract of sale. There was only a promise of sale. What was the finding here with regards the subject matter? So in this case, although the SC held that it was an execuotry agreement, it still discussed the subject matter. THe agreement is the obligation to deliver 600 piculs of sugar of the 1st and 2nd class. You have the quantity and quality. Here there was no clause in the written conrtact as to what is the source of that sugar in other words, the seller here was at liberty to pruchase it on the market or raise it himself. It may be true that defendant owned a plantation and expected to raise the sugar himself, but he did not limit his obligation to his own crop of sugar. Our conclusion is that the condition which the defendant seeks to add to the contract by parol evidence cannot be considered. The rights of the parties must be determined by the writing itself. Kunwari nagkaroon nang flood and hindi siya nakadeliver, would that extinguish his obligation, would that still make him liable to return the money? Yes, in this case unjust enrichment. But remember this is a generic thing at the very least it is only determinable, the loss cannot result to an extinguishment of his obligation to deliver. Also take note that since there was no perfected contract of sale, yung cause of action is only to recover the money that was already paid. if what was involved here was a perfected conrtact of sale, there can be a specific performance kasi generic yun eh so pwede siya magdemand delivery of sugar from a specific source.

How about the quantity of a subject matter? is it essential for the perfection thereof? NGA vs IAC What was there agreement as to quantity? isnt there an agreement of 2000+ cavans? why was there an issue? Here, again take note that it is determinable despite the lack of specific quantity. There was quantity agreed upon by the party. pero hindi ibig sabihin na kalilangan 2640 cavans ang deliver. It was a quota. When the latter accepted the offer by noting in the info sheet a contract of 2640 cavans, there was already a meeting of the minds.The fact that the exact number of cavans of palay that has to be delivered has not been determined does not affect the perfection of the contract. In fact, you can go back to 1349, the fact that the quantity is not determinate, shall not be an obstacle to the existence of the contract provided that it possible to determine the same without the need of a new contract between the parties. So essentially, in here, Soriano can deliver so much of his produce kasi yung agreement is harvested from his farmland as long as it does not exceed 2640 cavans of palay. How is this case different from the case of Schuback vs CA So sa Schuback, where the seller quoted the items for sale, item # , decscription and unit price and the buyer sent in reply a purchase order without the quantity being ordered there was already perfected contract of sale. That was december 24 even the required letter of credit was not yet opened by the buyer. In contrast sa NGA, dito it did not, contain the quantities per unit but the buyer merely bound itself to submit the quantities about a week after. Although we said earlier na no further agreement diba, take note in this case, given na lahat ang details except lang yung quantity and willing naman magbigay ng quantity amount yung buyer a week after, there was no objection on the part of the seller.

Why is it important to determine all of these elements for a valid subject matter? Because for example if the subject matter is not determinate or is not determinable, there can be no contract of sale.

The contract of sale is perfected upon issuance of the purchase order and not upon the confirmation of the quantities. But take note here, nothing at the time of sale indicated the quanitity of the object ordered could be determined outside or through a subsequent agreement by the parties. Again, sa NGA, we said that ok na yan kasi may maximum quantity and there was no further reference to another agreement. Dito while there was a succeeding agreement as to the quantities, yung quanitit lang naman ang kelangan idetermine and there was no objection on the part of the seller when the buyer obligated himself to determine the quantities thereafter. So december 24, kahit wala pa yung specific quantity, there is alreayd a perfected contract of sale. In fact, there can be contracts of sale which are preparatory in essence for example supply agreement. All goods that I will manufacture I will exclusively sell to you. I do not know how much I can manufacture in a month or in a week but there is a perfected contract of sale there despite the absence of quantity kasi sinabi ko na lahat ng maproduce ko or mamanufacture ko sayo ko ibenta. at the same time , on your part as the buyer that an agreement that the seller will supply all the requirements of the buyer for the said goods or his needs, then that is also a valid agreement. Supply contract siya noh or produce contract on the part of the seller.