SECOND DIVISION

[G.R. No. 42898. January 30, 1936.]

COSME BIAGTAN , plaintiff-appellee, vs . CONCEPCION VIUDA DE

OLLER, CARMEN OLLER DE SIPIN, TELESFORO SIPIN ET AL. ,
defendants-appellants.

Pedro C. Quinto for appellants.

Alejo Mabanag and Tomas B. Tadeo for appellee.

SYLLABUS

1. BARTER; EFFECTIVENESS OF THIS CONTRACT; FREE DISPOSAL OF THE

PROPERTIES PROMISED. — Barter is a contract conveying ownership for the
consummation of which the mutual delivery by the contracting parties if the things
which they promised in barter is necessary. When R. O. entered into it, he was not the
owner of all the lands promised by him and, if he were, he would not have the free
disposal thereof. He owned only two of them which are those actually in the
possession of the appellee and described in Exhibits 9 and 10.
2. ID.; ID.; ID. — The contract as to R. O. could not be effective for lack of one
of the requisites essential for its validity: the undertaking or promise to give entirely five
parcels of land in the barrio of San Jose, which promise could not be fulfilled and in fact
was not fulfilled by him. Under such circumstances, the appellee cannot be compelled
to fulfill his promise.
3. ID.; ID.; ID.; PERTINENT PROVISIONS OF THE CIVIL CODE. — The
provisions of articles 1539 and 1541, in connection with those of articles 1503 and
1124 of the Civil Code, support the appellee in his demand for the return to him of the
lot in question with all the improvements thereon.

DECISION

DIAZ , J : p

The subject matter of this suit is the ownership and possession of the land or lot
described in paragraph II of the amended complaint and more particularly described in
transfer certi cate of title No. 3429, with the improvements thereon consisting of a
house and a camarin of strong materials, situated in the center of the town of the
municipality of San Jacinto of the Province of Pangasinan.

The lower court declared said lot and its improvements as the property of the
plaintiff and ordered the defendants to turn them over to him, and the plaintiff in turn, to
surrender to the defendants the ownership and possession of two parcels of land that
he received from Rafael Oller, predecessor in interest of the defendants, by virtue of a
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 contract of barter formerly entered into between the two and declared null and void by
the court. No pronouncement was made as to costs.
From this judgment of the lower court, the defendants appealed to this court,
attributing to it the seven alleged errors relied upon in their brief as follows:
"I. The trial court erred: (a) In computing Rafael Oller's one year period of
repurchase from the date of the public auction sale of the properties mortgaged to the
Philippine National Bank; (b ) in not computing the one year period or repurchase, at
least from the date when the order of con rmation of the public auction sale become
nal; ( c) in not computing the one year period of repurchase from the notation of the
order of con rmation, inasmuch as the case involves real estate registered under Act
No. 496.
"II. The lower court erred in not holding that the sale or the negotiations for
the sale of the lands to Biagtan by the bank took place during Oller's period of
repurchase. It likewise erred in not holding that the exclusive, or at least principal
consideration of the transfer of the lot, house and camarin by Biagtan to Oller was the
latter's cession or renunciation of his right of repurchase from the bank in favor of
Biagtan.
"III. The lower court erred in not declaring that Biagtan is already in
possession of the lands described in taxes Nos. 10915 and 10916 (Exhibits 12 and
11), in addition to those described in taxes Nos. 10911, 10913 and 10914 which he had
already received and are now in his possession.
"IV. The lower court clearly erred in holding that one of the parcels of land
which Oller promised to give to Biagtan contained an area of ve hectares situated of
the western side of the land bought by Biagtan from the bank.
"V. Granting, without admitting, that Biagtan is not yet in possession of the
lands described in Exhibits 11 and 12, the lower court erred in not ordering Biagtan to
accept the transfers in his name of the Torrens titles of said two parcels of land.
"VI. The lower court erred in not considering Oller at least as an agent or
broker when Biagtan bought the parcel of 45 hectares from the bank at an enormous
pro t, and in not considering said concept and other parcels of land belonging to Oller
as suf cient consideration for the transfer of the lot, house and camarin by Biagtan to
Oller.
"VII. The lower court erred in not absolving the defendants from the
complaint and in not entering judgment against the plaintiff-cross-defendant in
conformity with the prayer of he cross-complaint."
The pertinent facts of the case which have not been disputed by the parties may
be summarized as follows:
Rafael Oller, father of the defendant Carmen Oller who is the defendant Telesforo
Sipin's wife; husband, in life, of the other defendant Concepcion or Consuelo Pasana
Viuda de Oller with whom he had four children who are the defendants Rafael, jr.,
Juanita, Zuraida and Emiliano Oller; and grandfather of the other defendant Miguel Oller,
was originally the owner of the two parcels of land described in transfer certi cate of
title No. 3429 of the registry of deeds of Pangasinan (Exhibit I). He mortgaged them to
the Philippine National Bank for the sum of P10,000, on November 29, 1919 (Exhibit A),
and as he had failed to pay his obligation to the bank, the latter brought civil case No.
3942 (Exhibit C) to foreclose the mortgage in its favor. Inasmuch as Rafael Oller was
unable to pay his obligation within the period of three months granted him in the court's
decision and judgment which, by the way, was adverse to him, the order of the court in
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 said judgment was executed and the two parcels of land in question were sold at public
auction to the Philippine National Bank as the highest bidder. The sale took place on
July 28, 1924, and the price paid for said property was P8,210 (Exhibits E, F, F-1 and F-
2). The sale was not con rmed by the court until April 13, 1926, but it was expressly
provided in the order con rming it that said sale would be considered effective from
July 28, 1924, the date on which the public auction sale was made (Exhibit G).
Nine months later, or on January 3, 1927, the Philippine National Bank succeeded
in registering transfer certi cate of title No. 3166 in its name in the registry of deeds of
Pangasinan after cancellation of original certi cate of title No. 604 (Exhibit J), which
covered the very properties in question,; and on June 1st of said year, it sold said
properties to the plaintiff for the sum of P12,000 (Exhibit K). On the 28th of said month
and year transfer certificate of title No. 3429 (Exhibit I) was issued to the plaintiff.
The defendants alleged and attempted to prove that while Rafael Oller's right of
purchase was yet subsisting, he consented to the purchase of the two properties in
question from the Philippine National Bank by the plaintiff because the two had agreed
that the plaintiff should keep only one of the properties, that described as parcel No. 1
in transfer certi cate of title No. 3429 (Exhibit I), and that he would turn over the other,
or that described as parcel No. 2 in said certificate, to Rafael Oller.
They furthermore alleged and attempted to prove that when the plaintiff had
already obtained the complete transfer to him of the two parcels of land in question
through the execution of the necessary document in his favor by the Philippine National
Bank, he then not only refused to acknowledge his verbal contract with Rafael Oller but
imposed the condition that in order that he might transfer the second parcel to Oller it
was necessary for the latter to convey to him the other lands which Oller had in the
barrio of San Jose of the municipality of San Jacinto, Pangasinan; and that under such
circumstances, Rafael Oller was compelled to convey the lands described in Exhibits 8,
9, 10, 11 and 12 to the plaintiff.
The plaintiff, in turn, attempted to prove that the only contract entered into by him
and Rafael Oller was that whereby he bound himself to convey to Oller parcel No. 2 of
transfer certi cate of title No. 3429, provided Oller, in turn, conveyed to him his ve
parcels of land situated in the barrio of San Jose, described in said documents Exhibits
8, 9, 10, 11 and 12; and that he received two of said ve parcels of land — those
described in Exhibits 9 and 10 — from Rafael Oller, but to date the remaining three —
those described in Exhibits 8, 11 and 12 — have not yet been delivered to him either by
said Rafael Oller or his heirs.
It is true that neither Rafael Oller nor the plaintiff had executed any formal
document to prove the existence of the contract of barter entered into by them but it is
a fact that such contract existed. The parties have admitted it impliedly; and
furthermore it is so shown by the very documentary evidence presented by the
defendants and appellants, consisting in the letters written by the plaintiff to Rafael
Oller during the period of May 7th to August 12, 1929 (Exhibits 1 to 7). This
documentary evidence proves not only this but something more. It shows, in addition to
the testimony of the defendants and their witnesses, that while said plaintiff complied
with his obligation under the terms of their contract of barter, conveying parcel No. 2 of
transfer certi cate of title No. 3429 (Exhibit I) to Rafael Oller, the latter failed to do the
same, much less his heirs or the defendants. They have not yet delivered to him the
lands described in said documents Exhibits 8, 11 and 12. They could not deliver them
to him because they then were in the hands of third persons and now they are in the
possession of Miguel Oller in whose name transfer certi cate of title No. 5680 of the
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 registry of deeds of Pangasinan was issued on November 26, 1930 (Exhibit 31), some
months after Rafael Oller's death. Parcels Nos. 3 and 4 referred to in said transfer
certi cate of title are the same lands described in Exhibits 11 and 12. It does not
appear that the land described in Exhibit 8 has been delivered to the plaintiff by Rafael
Oller or his heirs, or that the plaintiff already has it in his possession, because the
testimony of some of the witnesses for the defendants, af rming that it had already
been actually delivered to him, did not state when it was delivered, what the nature of
the land is and where it is situated. It cannot be believed to be included in the land
described as parcel No. 1 in transfer certi cate of title No. 3429 because, taking into
consideration its boundaries, it appears to be impossible. In order to be considered as
included therein, it must necessarily abut on all sides on Rafael Oller's land, that is, the
one described in said certi cate as parcel No. 1, but it is at once noticeable that it
adjoins said land only at its southern side and partly at its eastern side.

The foregoing is a summary of the salient facts which we consider as clearly

established at the trial. It follows therefore that it is unnecessary to discuss
assignments of error I, II, III and IV relied upon by the applicants; because whether the
period within which Rafael Oller could repurchase his lands bought by the Philippine
National Bank at public auction, by virtue of a judicial order, had expired or not when
said bank resold the lands to the appellee, a question now altogether unimportant
because he did not exercise said right when he should have done so; and whether or not
there has been an understanding or a contract between him and the appellee that in
purchasing the lands in question the plaintiff bound himself to convey to Oller the land
described as parcel No. 2 in transfer certi cate of title No. 3429 (Exhibit I) which is no
other than the land in question; the existence of such understanding or contract is of no
avail to him because another thing was later stipulated between the two thus novating
the former; inasmuch as it is inferred from said Exhibits 1 to 7 and also from the
testimony of the appellee that the two agreed that for Rafael Oller again to become the
owner of the land in question, he should bind himself, as he did in fact, to give to the
plaintiff his ve parcels of land situated in the barrio of San Jose, in addition to the land
described as parcel No. 1 in said transfer certi cate of title No. 3429. It is a fact that
although Oller received the land promised him in exchange, he delivered only two of the
ve parcels which he, in turn, had promised. He did not deliver the three parcels to the
appellee while he was still alive, nor did his heirs do so after his death, because they did
not belong to him. They were in the hands of other persons and the transfer certi cate
of title covering them is in the name of Miguel Oller since November 26, 1930.
Barter, for such is the contract lastly entered into between Rafael Oller,
predecessor in interest of the appellants, and the appellee, is a contract conveying
ownership for the consummation of which the mutual delivery by the contracting
parties of the things which they promised in barter is necessary. When Rafael Oller
entered into it, he was not the owner of all the lands promised by him and, if he were, he
would not have not the free disposal thereof. He owned only two of them which are
those actually in the possession of the appellee and described in Exhibits 9 and 10.
Therefore, the contract as to him could not be effective for lack of one of the requisites
essential to its validity: the undertaking or promise to give entirely ve parcels of land in
the barrio of San Jose, which promise could not be ful lled and in fact was not ful lled
by him. Under such circumstances, the appellee cannot be compelled to ful ll his
promise. On the contrary, he can resolve his obligation created by his contract of barter
with Rafael Oller. The provisions of articles 1539 and 1541, in connection with those
articles 1503 and 1124 of the Civil Code, support the appellee in his demand for the
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 return to him of the lot in question with all the improvements thereon. Said articles read,
respectively as follows:
"ART. 1539. If one of the contracting parties should have received the thing
promised to him in barter, and should prove that it did not belong to the person who
gave it, he cannot be compelled to deliver the thing he offered in exchange, and shall be
discharged of his obligation upon returning the thing received by him."
"ART. 1541. Barter shall be governed by the provisions relating to sales as to
all matters not specially provided for in this title."
"ART. 1503. Should the vendee have reasonable grounds to fear the loss of
any real property sold and of its price he may immediately sue for a rescission of the
sale.
"Should such grounds not exist, the provisions of article 1124 shall be
applicable."
"ART. 1124. The right to resolve reciprocal obligations, in case one of the
obligors should fail to comply with that which is incumbent upon him is deemed to be
implied.
"The person prejudiced may choose between exacting the ful llment of the
obligation or its resolution with indemnity for damages and payment of interest in
either case. He may also demand the resolution of the obligation even after having
requested its fulfillment, should the latter be found impossible. . . .
"The court shall decree the resolution demanded, unless there should be grounds
which justify the allowance of a term for the performance of the obligation. . . ."
Inasmuch as Rafael Oller has failed to comply with the terms of his contract of
barter, and as the appellee has chosen to resolve his obligations created by the
contract in question, it is but just that he be granted the remedy correctly granted him
by the lower court. The fact that Miguel Oller, one of the appellants, has offered to
convey to him the two parcels of land described in said Exhibits 11 and 12, or as
parcels Nos. 3 and 4 in transfer certi cate of title No. 5680, because such step is out of
time and it is the appellee to whom the law grants the right to chose. On the other hand,
he has not, as already stated, been given the fth parcel, that is, the one described in
Exhibit 8.
Having arrived at this conclusion, it becomes unnecessary to discuss or pass
upon the other three last assignments of error relied upon by the appellants because it
clearly appears from the foregoing that they are not entitled to any indemnity
particularly if it is borne in mind that they have been occupying and taking advantage of
the lot, house and camarin in question.
Wherefore, the appealed judgment of the lower court being in accordance with
law and supported by the evidence, it is hereby af rmed, with the costs of both
instances to the appellants. So ordered.
Villa-Real, Abad Santos, Vickers and Recto, JJ., concur.

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