G.R. No. L-47986 and L-49018, July 16, 1984
AQUILINA P. MARIN and ANTONIO S. MARIN, SR., petitioners, vs. JUDGE MIDPANTAO L. ADIL, Branch 11, CFI, Iloilo; PROVINCIAL SHERIFF, CFI, South Cotabato; REGISTER OF DEEDS, General Santos City; MANUEL P. ARMADA and ARISTON P. ARMADA, now substituted by his heirs, respondents.

FACTS

In 1963, Aquilina P. Marin and the Armada brothers executed a Deed of Exchange with Quitclaim. Marin assigned her hereditary share in her deceased mother’s estate in Iloilo to the Armadas. In exchange, the Armadas assigned their rights to properties in Cotabato, including a parcel covered by TCT No. 7252. The deed contained a critical stipulation in its paragraph 6: it would be rescindible if it were eventually ascertained that either party had no right to the properties being exchanged. It further stated in paragraph 7 that the execution was not an acknowledgment of entitlement but was made “in anticipation of a declaration of said right.”
Subsequent events led to litigation. Marin later executed another deed assigning her Iloilo properties to her sister, Aurora Provido, thereby rendering her unable to fulfill her obligation to the Armadas. The Armadas filed an action for rescission in the Court of First Instance of Iloilo, which ruled in their favor, ordered mutual restitution, and awarded them damages. The trial court also granted execution pending appeal. Marin assailed these orders through certiorari and prohibition petitions consolidated in this case.

ISSUE

Whether the 1963 Deed of Exchange is a valid and enforceable contract.

RULING

The Supreme Court declared the Deed of Exchange void and inexistent. The legal logic centers on the contract’s object. Under Article 1378 of the Civil Code, contracts must have a certain determinate subject matter. The deed failed this requirement because the rights of the parties to the exchanged properties were not definitively ascertained at the time of execution. The stipulation that the exchange was made “in anticipation of a declaration” of their rights created an inherent uncertainty, rendering the object indeterminate.
Furthermore, the contract is void under Article 1409(6) of the Civil Code, which declares agreements contemplating an impossible service or where the object is outside the commerce of men as inexistent. Here, the object—the parties’ hereditary rights—was not certain or vested, making the promised exchange impossible to determine and deliver with certainty at the time of the agreement. The Court noted the irreconcilable provisions between taking possession of the properties and the anticipation of a future declaration of rights, highlighting the fundamental defect.
Consequently, an action to declare such a void contract inexistent does not prescribe. The Court set aside the trial court’s judgment and order of execution, canceled the annotation of the deed on the titles, and denied the awards for damages due to lack of evidentiary basis. The rescission was grounded not on a breach but on the contract’s inherent nullity from its inception.