Causing vs. Bencer

A person may validly bind themselves to sell property they do not yet fully own, and if they later acquire full title, they are obligated to perform the contract. Rescission is not permitted when the party seeking it was the one in default.

The case involves a contract for the sale of land where the seller initially lacked full legal title because the property was co-owned with minors. The seller later acquired the minors' interests but then attempted to cancel the sale due to the land's increased value.

• Filed in the Court of First Instance of Iloilo.
• The lower court dismissed the action for recovery of land and damages but ordered the defendant to pay the unpaid balance of P600 with interest.
• The plaintiff appealed to the SC.

• Rufina Causing (plaintiff) co-owned a 70-hectare land with minor nieces/nephews.
• In 1909, she agreed to sell the entire parcel to Alfonso Bencer (defendant) for P1,200.
• Bencer paid P800 and took possession, with the balance due later. The parties understood Causing would obtain judicial approval for the minors' shares.
• The price was later increased to P1,400, with payment extended to May 1911.
• Neither party performed: Bencer did not pay the balance; Causing did not obtain judicial approval or later, a deed for the full title.
• As the minors reached majority, Causing successively purchased their shares, eventually becoming the sole owner before filing suit.
• The land's value increased. Causing sued to annul the contract, recover the land, and claim P3,850 in damages for use and occupation.

• The contract was merely provisional, as indicated by the receipt stating the P800 was an "advance payment in case the sale is effected."
• The defendant failed to pay the balance, entitling her to rescind.
• She was not in a position to convey full title initially, so the defendant's obligation to pay never arose.

• The contract was valid and binding. He had been in continuous possession as owner.
• The plaintiff's subsequent acquisition of the minors' shares showed her intent to comply.
• The plaintiff was the party in default for not being ready to convey a clear title.

• Procedural Issues: N/A
• Substantive Issues:
  • Whether the contract of sale was valid and enforceable despite the seller initially lacking full title.
  • Whether the seller could rescind the contract after acquiring full title.

• Procedural: N/A
• Substantive:
  • The SC ruled the contract was valid. A person can bind themselves to sell something they do not yet possess.
  • Rescission was not warranted. Under mutuality of contracts, neither party can unilaterally rescind. The plaintiff, not the defendant, was in default because she could not convey full title when required. Her later acquisition of full title made her obligated to perform.

• Mutuality of Contracts — A contract is binding on both parties; neither can unilaterally withdraw without the other's consent. The SC applied this to prevent the seller from rescinding after the buyer had already partially performed and taken possession.
• Obligation to Perform Upon Acquisition of Title — One who contracts to sell property they do not fully own is obligated to transfer it once they acquire full title. The SC held the plaintiff's purchase of the minors' shares was reasonably intended to fulfill her contract with the defendant.

• "There can be no question of the power of a person to bind himself to sell something which he does not yet possess; acquiring title to the thing sold."
• "In mutual obligations neither party shall be deemed to be in default if the other does not fulfill, or offer to fulfill his own obligation..." (citing Article 1100 of the Civil Code)

• N/A (The decision does not extensively cite prior case law, focusing on codal provisions and general principles.)

• Article 1100, Civil Code — Establishes the rule on default in mutual obligations: neither party is in default if the other does not fulfill or offer to fulfill their obligation.

• N/A (All justices concurred.)