FACTS:

Juan P. Cabrera filed a petition for review on certiorari assailing the decision of the Court of Appeals. The case arose from a dispute over a 5,517-square-meter parcel of land located in Sabang, Naga City, which was co-owned by the heirs of Luis and Matilde Ysaac. One of the co-owners, Henry Ysaac, leased portions of the property to various lessees, including Juan Cabrera. Cabrera leased a 95-square-meter portion of the land.

On May 6, 1990, Henry Ysaac offered to sell the 95-square-meter piece of land to Juan Cabrera, who expressed his concern that the land was too small without parking space for his vehicle. To address this concern, Henry Ysaac expanded his offer to include two adjoining lands that were leased to the Borbe family and the Espiritu family, with a combined area of 439 square meters.

Cabrera accepted the new offer, and they settled on the price of P250.00 per square meter. Cabrera stated that he could only pay in full after his retirement on June 15, 1992. Henry Ysaac agreed but demanded an initial payment of P1,500.00, which Cabrera paid.

On June 15, 1992, when Cabrera tried to pay the balance of the purchase price, Henry Ysaac was not available. In September 1993, Ysaac approached Cabrera requesting a reduction in the area of the land due to the planned barangay walkway and an occupying family that was difficult to eject. Cabrera agreed, and a resurvey of the land was conducted. However, Henry Ysaac's wife refused to receive the payment due to lack of authority from her husband.

On September 21, 1994, Henry Ysaac's counsel wrote a letter informing Cabrera's counsel that the contract of sale was being rescinded due to Cabrera's failure to pay the balance of the purchase price and stating that Cabrera's initial payment would be applied as payment for overdue rent.

Cabrera then filed a civil case for specific performance, praying for the execution of a formal deed of sale and transfer of the title in his name. A notice of lis pendens was also annotated on the title. During the trial, Corazon Borbe Combe testified that her family never agreed to sell the land they were leasing from Henry Ysaac to Cabrera. The property was eventually sold by the heirs to the local government of Naga City for an urban poor project.

ISSUES:

1. • Whether there was a valid contract of sale between the petitioner and the respondent

2. Whether the sale between the petitioner and respondent was valid considering that the property was still held in common at the time of the sale.

3. Whether the respondent had the authority to sell a definite portion of the co-owned property without the consent of the co-owners.

4. Whether there was a valid contract of sale between the petitioner and respondent.

5. Whether the contract of sale was cancelled and rescinded.

6. Whether the sale made by the local government of Naga City to the heirs of Luis and Matilde Ysaac is valid.

7. Whether the contract of sale can still be enforced.

8. Whether the contract between petitioner and respondent was a contract of sale or a contract to sell.

9. Whether the rule on double sales under Article 1544 of the Civil Code applies.

10. Whether petitioner is entitled to compensatory damages.

11. Whether petitioner is entitled to attorney's fees and costs of litigation.

RULING:

1. • The court ruled that there was no valid contract of sale between the petitioner and respondent. The contract was null ab initio because there was no meeting of minds as to the price and size of the property subject of the sale. The seller must be the owner of the object of the contract, and if the seller is a co-owner, a sale of a portion of the property requires the unanimous consent of the other co-owners. In this case, there was no evidence to show that the other co-owners consented to the sale. Thus, the contract was deemed invalid.

2. The sale between the petitioner and respondent was not valid because at the time of the sale, the property was still held in common. The sale of a definite portion of common property requires the consent of all co-owners because it operates to partition the land with respect to the co-owner selling his or her share. The co-owner cannot sell a concrete, specific or determinate part of the property without the consent of the other co-owners.

3. The respondent did not have the authority to sell a definite portion of the co-owned property without the consent of the co-owners. Without the consent of the co-owners, the sale of a definite portion of the property is not binding to the co-ownership.

4. There was no valid contract of sale between the petitioner and respondent.

5. The contract of sale was cancelled and rescinded by virtue of the letter dated September 21, 1994.

6. The sale made by the local government of Naga City to the heirs of Luis and Matilde Ysaac is considered valid.

7. The contract of sale can no longer be enforced.

8. The contract between petitioner and respondent was a contract to sell, not a contract of sale. Hence, the strict requisites in Article 1592 do not apply, and the courts cannot enforce the right of petitioner to buy respondent's property.

9. The rule on double sales under Article 1544 of the Civil Code does not apply since there was only one valid sale between the local government of Naga City and respondent and his co-owners.

10. Petitioner is entitled to the return of the amount of money he paid as consideration for ownership of the land because the ownership could not be transferred to him, thus avoiding unjust enrichment on the part of respondent. However, petitioner's claim for rent in arrears is a separate cause of action.

11. Petitioner is not entitled to attorney's fees and costs of litigation because he did not have a clear right over the property and the award was not properly justified.

PRINCIPLES:

• For a valid contract of sale, there must be consent of the parties, an object certain, and cause of the obligation.

• Sale is a special contract where the seller obligates himself to deliver a determinate thing and transfer its ownership to the buyer, in exchange for a price certain.

• If the seller is a co-owner, the sale of a portion of the property requires the unanimous consent of the other co-owners.

• The undivided interest of a co-owner can be sold, but a definite portion of the land cannot be sold without consent from the co-owners.

• Prior to partition, a sale of a definite portion of common property requires the consent of all co-owners because it operates to partition the land with respect to the co-owner selling his or her share.

• A co-owner has no right to sell or alienate a concrete, specific, or determinate part of the co-owned property without the consent of the co-owners.

• The sale of a definite portion of a co-owned property is subject to the suspensive condition of the partition of the property and the consent of the other co-owners.

• A non-existent contract cannot be a source of obligations and cannot be enforced by the courts.

• The absence of a contract of sale means there is no source of obligations for the parties involved.

• Rescission is impossible in the absence of a contract to rescind.

• The power to rescind obligations is implied in reciprocal ones.

• Article 1592 of the Civil Code applies to the rescission of a contract of sale of an immovable property.

• A contract to sell an immovable property is different from a contract of sale, and the rescission rules of Article 1592 do not apply.

• Non-payment can operate to cancel a contract to sell.

• The law does not prescribe a specific form to rescind a contract to sell immovable property.

• The distinction between a contract of sale and a contract to sell (Article 1592).

• The rule on double sales under Article 1544 of the Civil Code.

• The principle of unjust enrichment.

• The rule on compensation under Article 1279 of the Civil Code.

• The award of attorney's fees and costs of litigation is proper if there is a clear right and the litigation is to protect such right.