Intro to Sales Cases

8/9/2019 Intro to Sales Cases

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G.R. No. 139173 February 28, 2007

SPOUSES ONNIE SERRANO AND AMPARO HERRERA, Petitionersvs.GODOFREDO AGUIA!,Respondent.

D E C I S I O N

Before us is a petition for review on certiorari under Rule 45 of the !!" Rules of Civil Procedure# as a$ended# assailin%the Decisionof the Court of &ppeals dated 'anuar( )!# !!! and its Resolution dated 'ul( 4# !!! in C&*+.R. C, No.4--)4.

Spouses Onnie and &$paro errera# petitioners# are the re%istered owners of a lot located in /as Pi0as# 1etro 1anilacovered 2( 3ransfer Certificate of 3itle No. 3*!!5.

So$eti$e in 1arch !!# +odofredo Ca%uiat# respondent# offered to 2u( the lot. Pe"#"#o$er% a&ree' "o %e(( #"a"P1,)00.00 *er %+uare e"er. Respondent then %ave petitioners P#. as partial pa($ent. In turn# petitioners%ave respondent the correspondin% receipt statin% that respondent pro$ised to pa( the 2alance of the purchase price onor 2efore 1arch )# !!# thus6

/as Pi0as# 1etro 1anila

1arch !# !!

RECEIP3 7OR P&R3I&/ P&81EN3 O7 /O3 NO. ) CO,ERED B8 3C3 NO. 3*!!5# /&S PI9&S# 1E3RO 1&NI/&

RECEI,ED 7RO1 1R. +ODO7REDO C&+:I&3 3E &1O:N3 O7 ONE :NDRED 3O:S&ND PESOS;P#.< &S PAR!IA- PAMEN!O7 O:R /O3 SI3:&3ED IN /&S PI9&S# 1.1. CO,ERED B8 3C3 NO. 3*!!5&ND =I3 &N &RE& O7 4! S>:&RE 1E3ERS.

1R. C&+:I&3 PRO1ISED 3O P&8 3E B&/&NCE O7 3E P:RC&SE PRICE ON OR BE7ORE 1&RC )# !!#&ND 3&3 =E =I// E?EC:3E &ND SI+N 3E 7IN&/ DEED O7 S&/E ON 3IS D&3E.

SI+NED 3IS !th D&8 O7 1&RC# !! &3 /&S PI9&S# 1.1.

;S+D< &1P&RO ERRER& ;S+D< ONNIE SERR&NO@)

On 1arch )-# !!# respondent# throu%h his counsel &tt(. Ponciano Espiritu# wrote petitioners infor$in% the$ of hisreadiness to pa( the 2alance of the contract price and reAuestin% the$ to prepare the final deed of sale.

On &pril 4# !!# petitioners# throu%h &tt(. Ru2en ,. /ope# sent a letter4to respondent statin% that petitioner &$paroerrera is leavin% for a2road on or 2efore &pril 5# !! and that the( are cancelin% the transaction. Petitioners alsoinfor$ed respondent that he can recover the earnest $one( of P#. an(ti$e.
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&%ain# on &pril # !!#5petitioners wrote respondent statin% that the( delivered to his counsel Philippine National Ban1ana%ers Chec No. "!5" dated &pril # !! in the a$ount of P#. pa(a2le to hi$.

In view of the cancellation of the contract 2( petitioners# respondent filed with the Re%ional 3rial Court# Branch # 1aatiCit( a co$plaint a%ainst the$ for specific perfor$ance and da$a%es# doceted as Civil Case No. !*".

On 'une )"# !!4# after hearin%# the trial court rendered its Decision"findin% there was a perfected contract of sale2etween the parties and orderin% petitioners to eFecute a final deed of sale in favor of respondent. 3he trial court held6

F F F

In the evaluation of the evidence presented 2( the parties as to the issue as to who was read( to co$pl( with hiso2li%ation on the ver2al a%ree$ent to sell on 1arch )# !!# shows that plaintiffs position deserves $ore wei%ht andcredi2ilit(. 7irst# the P#. that plaintiff paid whether as downpa($ent or earnest $one( showed that there wasalread( a perfected contract. &rt. 4-) of the Civil Code of the Philippines# reads as follows# to wit6

G&rt. 4-). =henever earnest $one( is %iven in a contract of sale# it shall 2e considered as part of the price and as proofof the perfection of the contract.

Second# plaintiff was the first to react to show his ea%erness to push throu%h with the sale 2( sendin% defendants theletter dated 1arch )5# !!. ;EFh. GD< and reiterated the sa$e intent to pursue the sale in a letter dated &pril # !!.3hird# plaintiff had the 2alance of the purchase price read( for pa($ent ;EFh. GC


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+enerall(# the findin%s of fact of the lower courts are entitled to %reat wei%ht and should not 2e distur2ed eFcept for co%entreasons.4 Indeed# the( should not 2e chan%ed on appeal #$ "/e ab%e$e o a (ear %/o#$& "/a" "/e "r#a( our"oer(oo4e', '#%re&ar'e', or #%#$"er*re"e' %oe a"% o e#&/" a$' %#&$##a$e, /#/ # o$%#'ere' ou('

/ae a("ere' "/e re%u(" o "/e a%e.1awphi1.net)In the present case# we find that 2oth the trial court and the Court of&ppeals interpreted so$e si%nificant facts resultin% in an erroneous resolution of the issue involved.

In holdin% that there is a perfected o$"ra" o %a(e# 2oth courts $ainl( relied on the earnest $one( %iven 2( respondentto petitioners. 3he( invoed &rticle 4-) of the Civil Code which provides that @=henever earnest $one( is %iven in acontract of sale# it shall 2e considered as part of the price and as proof of the perfection of the contract.@

=e are not convinced.

In San Miguel Properties Philippines, Inc. v. Spouses Huang,we held that the sta%es of a contract of sale are6;< negotiation# coverin% the period fro$ the ti$e the prospective contractin% parties indicate interest in the contract to theti$e the contract is perfected ;):&RE 1E3ERS.

1R. C&+:I&3 PRO1ISED 3O P&8 3E B&/&NCE O7 3E P:RC&SE PRICE ON OR BE7ORE 1&RC )# !!#&ND 3&3 =E =I// E?EC:3E &ND SI+N 3E 7IN&/ DEED O7 S&/E ON 3IS D&3E.

there can 2e no other interpretation than that the( a%reed to a conditional contract of sale# consu$$ation of which issu2Hect onl( to the full pa($ent of the purchase price.

& contract to sell is ain to a conditional sale where the efficac( or o2li%ator( force of the vendorKs o2li%ation to transfertitle is su2ordinated to the happenin% of a future and uncertain event# so that if the suspensive condition does not taeplace# the parties would stand as if the conditional o2li%ation had never eFisted. !/e %u%*e$%#e o$'#"#o$ #%oo$(y u(( *aye$" o "/e *ur/a%e *r#e.5

3he differences 2etween a contract to sell and a contract of sale are well*settled in Hurisprudence. &s earl( as !5#in Sing Yee v. Santos#we held that6
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F F F LaM distinction $ust 2e $ade 2etween a contract of sale in which title passes to the 2u(er upon deliver( of the thin%sold and a contract to sell F F F where 2( a%ree$ent the ownership is reserved in the seller and is not to pass until the fullpa($ent# of the purchase price is $ade. In the first case# non*pa($ent of the price is a ne%ative resolutor( condition inthe second case# full pa($ent is a positive suspensive condition. Bein% contraries# their effect in law cannot 2e identical.In the first case# the vendor has lost and cannot recover the ownership of the land sold until and unless the contract ofsale is itself resolved and set aside. In the second case# however# the title re$ains in the vendor if the vendee does notco$pl( with the condition precedent of $ain% pa($ent at the ti$e specified in the contract.

In other words# in a contract to sell# ownership is retained 2( the seller and is not to pass to the 2u(er until full pa($ent ofthe price."

In this case# the @Receipt for Partial Pa($ent@ shows that the true a%ree$ent 2etween the parties is a o$"ra" "o %e((.

First# ownership over the propert( was retained 2( petitioners and was not to pass to respondent until full pa($entof the purchase price. 3hus# petitioners need not push throu%h with the sale should respondent fail to re$it the2alance of the purchase price 2efore the deadline on 1arch )# !!. In effect# petitioners have the ri%ht torescind unilaterall( the contract the $o$ent respondent fails to pa( within the fiFed period. -

Second# the a%ree$ent 2etween the parties was not e$2odied in a deed of sale. 3he a2sence of a for$al deed ofconve(ance is a stron% indication that the parties did not intend i$$ediate transfer of ownership# 2ut onl( atransfer after full pa($ent of the purchase price.!

Third# petitioners retained possession of the certificate of title of the lot. 3his is an additional indication that thea%ree$ent did not transfer to respondent# either 2( actual or constructive deliver(# ownership of the propert(.)

It is true that &rticle 4-) of the Civil Code provides that @=henever earnest $one( is %iven in a contract of sale# it shall2e considered as part of the price and proof of the perfection of the contract.@ owever# this article speas of ear$e%"o$ey%iven in a contract of sale. In this case# the ear$e%" o$ey a% e$ #$ a o$"ra" "o %e((. 3he earnest $one(for$s part of the consideration onl( if the sale is consu$$ated upon full pa($ent of the purchase price. )Now# since theearnest $one( was %iven in a contract to sell# &rticle 4-)# which speas of a contract of sale# does not appl(.

&s previousl( discussed# the suspensive condition ;pa($ent of the 2alance 2( respondent< did not tae place. Clearl(#respondent cannot co$pel petitioners to transfer ownership of the propert( to hi$.

5HEREFORE,we GRAN! the instant Petition for Review. 3he challen%ed Decision of the Court of &ppeals isRE6ERSEDand respondents co$plaint is DISMISSED.

SO ORDERED.
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U-IE NAUS,MIHE--E NAUSa$' E!!!O-ERO, Petitioners#

* versus*

OA:UIN PASON a$' U-IA PASON, Respondents.

G.R. No. 1;1318Pre%e$"6

CORON .# !hairperson,

CICO*N&&RIO# ,E/&SCO# 'R.#

N&C:R andPER&/3 .Prou(&a"e'6

Nove$2er )5# )!

3his is a petition for review on certiorariLM of the DecisionL)Mof the Court of &ppeals in C&*+.R. C, No.44!4 dated Nove$2er )-# ). 3he Court of &ppeals affir$ed with $odification the Decision of the Re%ional 3rial

Court of /a 3rinidad# Ben%uet# Branch # orderin% petitioner Bett( 3olero to eFecute a deed of a2solute sale in favor ofrespondents# spouses 'oaAuin and 'ulia Pacson# over the lots covered 2( 3ransfer Certificate of 3itle ;3C3< Nos. 3*-5and 3*-5 upon pa($ent to her 2( respondents of the su$ of P5"#544.L-M4 representin% the 2alance due for the fullpa($ent of the propert( su2Hect of this case and orderin% petitioner Bett( 3olero to surrender to respondents herowners duplicate cop( of 3C3 Nos. 3*-5 and 3*-5.

3he facts# as stated 2( the trial court# LMare as follows63he spouses Bate and 'ulie Na2us were the owners of parcels of land with a total area of #5 sAuare $eters

situated in Pico# /a 3rinidad# Ben%uet# dul( re%istered in their na$es under 3C3 No. 3*!!" of the Re%ister of Deeds ofthe Provinceof Ben%uet. 3he propert( was $ort%a%ed 2( the Spouses Na2us to the Philippine National Ban ;PNB


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+ettin% suspicious# Catalina Pacson went to the Re%ister of Deeds of the Province of Ben%uet and ased for acop( of the title of the land. She found that it was still in the na$e of 'ulie and 1ichelle Na2us.

&fter a wee# Catalina Pacson heard a ru$or that the lot was alread( sold to petitioner Bett( 3olero. CatalinaPacson and &tt(. Rillera went to the Re%ister of Deeds of the Province of Ben%uet# and found that 'ulie Na2us and her$inor dau%hter# 1ichelle Na2us# represented 2( the for$ers $other as appointed %uardian 2( a court order datedOcto2er )!# !-)# had eFecuted a Deed of &2solute Sale in favor of Bett( 3olero on 1arch 5# !-4# coverin% the whole lotco$prisin% #5 sAuare $eters.L5M 3he propert( was descri2ed in the deed of sale as co$prisin% four lots6 ;< /ot &*)* with an area of -) sAuare $eters ;)< /ot &*)*B# - sAuare $eters ;< /ot &*)*C# ) sAuare $eters and ;4< /ot&*)*D# 45 sAuare $eters. /ots &*)*& and &*)*B# with a co$2ined area of # sAuare $eters# correspond to the lotpreviousl( sold to 'oaAuin and 'ulia Pacson in the Deed of Conditional Sale.

Catalina Pacson and &tt(. Rillera also found that the Certificate of 3itle over the propert( in the na$e of 'ulie and

1ichelle Na2us was cancelled on 1arch # !-4# and four titles to the fours lots were issued in the na$e of Bett( 3olero#na$el(6 3C3 No. 3*-5LMfor /ot &*)*& 3C3 No. -5L"Mfor /ot &*)*B 3C3 No. 3*-5)L-Mfor /ot &*)*C and 3*-5L!Mfor /ot &*)*D.

On 1arch ))# !-4# the %ate to the repair shop of the Pacsons was padloced. & si%n was displa(ed on the

propert( statin% No 3respassin%.L)M

On 1arch )# !-4# Catalina Pacson filed an affidavit*co$plaint re%ardin% the padlocin% incident of their repairshop with the police station at /a 3rinidad# Ben%uet.

On 1arch )-# )-# respondents 'oaAuin and 'ulia Pacson filed with the Re%ional 3rial Court of /a 3rinidad#Ben%uet ;trial court< a Co$plaintL)Mfor &nnul$ent of Deeds# with da$a%es and pra(er for the issuance of a writ ofpreli$inar( inHunction.L))M3he( sou%ht the annul$ent of ;< the EFtra*Hudicial Settle$ent of Estate# insofar as their ri%ht tothe #*sAuare*$eter lot su2Hect of the Deed of Conditional Sale L)M was affected ;)< 3C3 No. 3*""- issued in thena$es of 'ulie and 1ichelle Na2us and ;< the Deed of &2solute Sale L)4Min favor of Bett( 3olero and the transfercertificates of title issued pursuant thereto. 3he( also pra(ed for the award of actual# $oral and eFe$plar( da$a%es# aswell as attorne(s fees.

In their &nswer#L)5M'ulie and 1ichelle Na2us alle%ed that respondent 'oaAuin Pacson did not proceed with theconditional sale of the su2Hect propert( when he learned that there was a pendin% case over the whole propert(. 'oaAuinproposed that he would rather lease the propert( with a $onthl( rental of P)#. and appl( the su$ of P#. asrentals# since the a$ount was alread( paid to the 2an and could no lon%er 2e withdrawn. ence# he did not affiF hissi%nature to the second pa%e of a cop( of the Deed of Conditional Sale.L)M'ulie Na2us alle%ed that in 1arch !!4# due to

her own econo$ic needs and those of her $inor dau%hter# she sold the propert( to Bett( 3olero# with authorit( fro$ thecourt.Durin% the hearin% on the $erits# 'ulie Na2us testified that she sold the propert( to Bett( 3olero 2ecause she was

in need of $one(. She stated that she was free to sell the propert( 2ecause the Deed of Conditional Sale eFecuted infavor of the Spouses Pacson was converted into a contract of lease. She clai$ed that at the ti$e when the Deed ofConditional Sale was 2ein% eFplained to the$ 2( the notar( pu2lic# 'oaAuin Pacson alle%edl( did not lie the portion ofthe contract statin% that there was a pendin% case in court involvin% the su2Hect propert(. ConseAuentl(# 'oaAuin Pacsondid not continue to si%n the docu$ent hence# the second pa%e of the docu$ent was unsi%ned. L)"M 3hereafter# it wasalle%edl( their understandin% that the Pacsons would occup( the propert( as lessees and whatever a$ount paid 2( the$would 2e considered rentals.

Bett( 3olero put up the defense that she was a purchaser in %ood faith and for value. She testified that it was'ulie Na2us who went to her house and offered to sell the propert( consistin% of two lots with a co$2ined area of #sAuare $eters. She consulted &tt(. &urelio de Peralta 2efore she a%reed to 2u( the propert(. She and 'ulie Na2us2rou%ht to &tt(. De Peralta the pertinent papers such as 3C3 No. 3*""- in the na$es of 'ulie and 1ichelle Na2us# the%uardianship papers of 1ichelle Na2us and the 2lueprint cop( of the surve( plan showin% the two lots. &fter eFa$inin%the docu$ents and findin% that the title was clean# &tt(. De Peralta %ave her the %o*si%nal to 2u( the propert(.

3olero testified that upon pa($ent of the a%reed price of P)#.# the Deed of &2solute Sale was eFecuted

and re%istered# resultin% in the cancellation of the title of 'ulie and 1ichelle Na2us and the issuance in her na$e of 3C3Nos. 3*-5 and 3*-5L)-M correspondin% to the two lots. 3hereafter# she ased her co$$on*law hus2and# BenI%nacio# to padloc the %ate to the propert( and han% the No 3respassin% si%n.

3olero also testified that as the new owner# she was surprised and shoced to receive the Co$plaint filed 2( the

Spouses Pacson. She ad$itted that she new ver( well the Spouses Pacson# 2ecause the( used to 2u( ve%eta2les
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re%ularl( fro$ her. She had 2een residin% alon% the hi%hwa( at Qilo$eter 4# /a 3rinidad# Ben%uet since !". She newthe land in Auestion# 2ecause it was onl( 5 $eters awa( across the hi%hwa(. She also new that the Spouses Pacsonhad a shop on the propert( for the weldin% and 2od(*2uildin% of vehicles. She was not aware of the Deed of ConditionalSale eFecuted in favor of the Pacsons# and she saw the docu$ent for the first ti$e when 'oaAuin Pacson showed it toher after she had alread( 2ou%ht the propert( and the title had 2een transferred in her na$e. &t the ti$e she was 2u(in%the propert(# 'ulie Na2us infor$ed her that the Pacsons were $erel( rentin% the propert(. She did not 2other to verif( ifthat was true# 2ecause the Pacsons were no lon%er in the propert( for two (ears 2efore she 2ou%ht it.

In a Decision dated Septe$2er # !!# the trial court ruled in favor of respondents. 3he dispositive portion of

the Decision reads6=ERE7ORE# pre$ises considered# Hud%$ent is here2( rendered in favor of the plaintiffs#

orderin% defendant Bett( 3olero to eFecute a deed of a2solute sale in favor of the Spouses 'oaAuin and'ulia Pacson over the lots covered 2( 3ransfer Certificates of 3itle Nos. 3*-5 and 3*-5 uponpa($ent to her 2( the plaintiffs of the su$ of P5"#544.L-M4 representin% the 2alance due for the fullpa($ent of the propert( su2Hect of this case. In addition to the eFecution of a deed of a2solute sale#defendant Bett( 3olero shall surrender to the plaintiffs her owners duplicate cop( of 3ransfer Certificatesof 3itle Nos. 3*-5 and 3*-5.

Defendants 'ulie Na2us# 1ichelle Na2us# and Bett( 3olero shall also pa( the plaintiffs da$a%esas follows6 P5#. for $oral da$a%es P)#. for eFe$plar( da$a%es and P#. forattorne(s fees and eFpenses for liti%ation.L)!M

3wo issues deter$ined 2( the trial court were6 ;< =as the Deed of Conditional Sale 2etween the Spouses

Pacson and the Na2uses converted into a contract of lease and ;)< =as Bett( 3olero a 2u(er in %ood faith

3he trial court held that the Deed of Conditional Sale was not converted into a contract of lease 2ecause the

ori%inal cop( of the contractLMshowed that all the pa%es were si%ned 2( all the parties to the contract. B( thepresu$ption of re%ularit(# all other car2on copies $ust have 2een dul( si%ned. 3he failure of 'oaAuin Pacson to si%n thesecond pa%e of one of the car2on copies of the contract was 2( sheer inadvertence. 3he o$ission was of noconseAuence since the si%natures of the parties in all the other copies of the contract were co$plete. 1oreover# all thereceipts of pa($ent eFpressl( stated that the( were $ade in pa($ent of the lot. Not a sin%le receipt showed pa($ent forrental.

7urther# the trial court held that Bett( 3olero was not a purchaser in %ood faith as she had actual nowled%e of the

Conditional Sale of the propert( to the Pacsons.

3he trial court stated that the Deed of Conditional Sale contained reciprocal o2li%ations 2etween the parties# thus6

3&3# as soon as the full consideration of this sale has 2een paid 2( the ,ENDEE# thecorrespondin% transfer docu$ents shall 2e eFecuted 2( the ,ENDOR to the ,ENDEE for the portion sold

F F F F3&3# finall(# the P&R3IES here2( a%ree that this Instru$ent shall 2e 2indin% upon their

respective heirs# successors or assi%ns.LM

In other words# the trial court stated# when the vendees ;the Spouses Pacson< were alread( read( to pa( their

2alance# it was the correspondin% o2li%ation of the vendors ;Na2uses< to eFecute the transfer docu$ents.3he trial court held that LuMnder &rticle ! of the Civil Code# an inHured part( in a reciprocal o2li%ation# such as

the Deed of Conditional Sale in the case at 2ar# $a( choose 2etween the fulfill$ent LorM the rescission of the o2li%ation#with the pa($ent of da$a%es in either case. It stated that in filin% the case# the Spouses Pacson opted for fulfill$ent ofthe o2li%ation# that is# the eFecution of the Deed of &2solute Sale in their favor upon pa($ent of the purchase price.

Respondents appealed the decision of the trial court to the Court of &ppeals.In the Decision dated Nove$2er )-# )# the Court of &ppeals affir$ed the trial courts decision# 2ut deleted the

award of attorne(s fees. 3he dispositive portion of the Decision reads6

=ERE7ORE# findin% no reversi2le error in the Septe$2er # !! Decision of the Re%ional3rial Court of /a 3rinidad# Ben%uet# Branch # in Civil Case No. -4*C,*"!# the instant appeal is here2(
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DIS1ISSED for lac of $erit# and the assailed Decision is here2( &77IR1ED and :PE/D with the$odification that the award of attorne(s fees is deleted.L)M

Petitioners filed this petition raisin% the followin% issues6

I3E LCO:R3 O7 &PPE&/SM ERRED IN CONSIDERIN+ 3E CON3R&C3 EN3ERED IN3O

BE3=EEN 3E SPO:SES B&3E N&B:S &ND ':/IE N&B:S &ND SPO:SES 'O&>:IN P&CSON&ND ':/I& P&CSON 3O BE & CON3R&C3 O7 S&/E.

II

3E CO:R3" #$%ERRED IN 7INDIN+ 3&3 3ERE &RE ON/8 3=O ISS:ES IN 3EC&SE ON &PPE&/ &ND 3E8 &RE6 =E3ER 3E DEED O7CONDI3ION&/ S&/E =&S CON,ER3ED IN3O & CON3R&C3 O7 /E&SE &ND 3&3 L=E3ERMPE3I3IONER BE338 3O/ERO =&S & B:8ER IN +OOD 7&I3.

III

3&3 3E 3RI&/ CO:R3 ERRED IN O/DIN+ 3&3 LRESPONDEN3SM B&/&NCE 3O 3ESPO:SES N&B:S :NDER 3E CONDI3ION&/ S&/E IS ON/8 P5"#544.L-M4.

I,

3&3 &SS:1IN+ =I3O:3 &D1I33IN+ 3&3 PE3I3IONER BE338 3O/ERO =&S &=&REO7 3E E?IS3ENCE O7 3E DEED O7 CONDI3ION&/S&/E# 3E 3RI&/ CO:R3# &S =E// &S 3E

LCO:R3 O7 &PPE&/SM# ERRED IN ORDERIN+ PE3I3IONER BE338 3O/ERO 3O E?EC:3E & DEEDO7 &BSO/:3E S&/E IN 7&,OR O7 3E LRESPONDEN3SM &ND 3O S:RRENDER 3E O=NERKSD:P/IC&3E COP8 O7 3C3 NOS. 3*-5 &ND 3*-5# =IC =&S NO3 PR&8ED 7OR IN 3EPR&8ER IN 3E CO1P/&IN3.

,

3&3 3E LCO:R3 O7 &PPE&/SM ERRED IN 7INDIN+ BE338 3O/ERO L&SM & B:8ER L=OM7&I/ED 3O 3&QE S3EPS IN IN>:IRIN+ 7RO1 3E LRESPONDEN3SM 3E S3&3:S O7 3EPROPER38 IN >:ES3ION BE7ORE ER P:RC&SE# CON3R&R8 3O 7&C3S ES3&B/ISED B8E,IDENCE.

,I

3E LCO:R3 O7 &PPE&/SM ERRED IN CONSIDERIN+ PE3I3IONER BE338 3O/ERO &

B:8ER IN B&D 7&I3# I+NORIN+ 3E &PP/IC&3ION O7 3E DOC3RINE IN 3E R:/IN+ O7 3ES:PRE1E CO:R3 IN 3E C&SE O7 &%'%(F% "(F%)S%, *T "(. +S. !%$&T %F "PP*"(S# +.R.NO. "45.LM

3he $ain issues to 2e resolved are6< =hether or not the Deed of Conditional Sale was converted into a contract of lease)< =hether the Deed of Conditional Sale was a contract to sell or a contract of sale.

&s re%ards the first issue# the Deed of Conditional Sale entered into 2( the Spouses Pacson and the SpousesNa2us was not converted into a contract of lease. 3he 4 receipts issued to the Spouses Pacson contained either thephrase as partial pa($ent of lot located in Q$. 4 or cash vale or cash vale ;partial pa($ent of lot located in Q$.4


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of P5"#544.-4# the o2li%ation of the vendors to eFecute the Deed of &2solute Sale in favor of respondents did noarise. 3hus# the su2seAuent Deed of &2solute Sale eFecuted in favor of Bett( 3olero# coverin% the sa$e parcel of landwas valid# even if 3olero was aware of the previous deed of conditional sale.

1oreover# petitioners contend that respondents violated the stipulated condition in the contract that the $onthl(

install$ent to 2e paid was P)#.# as respondents %ave $ea%er a$ounts as low as P..

Petitioners also assert that respondents alle%ation that 'ulie Na2us failure to 2rin% the pertinent docu$entsnecessar( for the eFecution of the final deed of a2solute sale# which was the reason for their not havin% paid the 2alanceof the purchase price# was untena2le# and a la$e and shallow eFcuse for violation of the Deed of ConditionaSale. Respondents could have $ade a valid tender of pa($ent of their re$ainin% 2alance# as it had 2een due for a lon%ti$e# and upon refusal to accept pa($ent# the( could have consi%ned their pa($ent to the court as provided 2( law. 3hisrespondents failed to do.

3he Court holds that the contract entered into 2( the Spouses Na2us and respondents was a contract to sell# not

a contract of sale.& contract of sale is defined in &rticle 45- of the Civil Code# thus6

&rt. 45-. B( the contract of sale# one of the contractin% parties o2li%ates hi$self to transfer theownership of and to deliver a deter$inate thin%# and the other to pa( therefor a price certain in $one( orits eAuivalent.

& contract of sale $a( 2e a2solute or conditional.&amos v. HeruelaL5Mdifferentiates a contract of a2solute sale and a contract of conditional sale as follows6

&rticle 45- of the Civil Code provides that a contract of sale $a( 2e a2solute or conditional. &contract of sale is a2solute when title to the propert( passes to the vendee upon deliver( of the thin% sold.& deed of sale is a2solute when there is no stipulation in the contract that tit le to the propert( re$ains withthe seller until full pa($ent of the purchase price. 3he sale is also a2solute if there is no stipulation %ivin%the vendor the ri%ht to cancel unilaterall( the contract the $o$ent the vendee fails to pa( within a fiFedperiod. In a conditional sale# as in a contract to sell# ownership re$ains with the vendor and does notpass to the vendee until full pa($ent of the purchase price. 3he full pa($ent of the purchase pricepartaes of a suspensive condition# and non*fulfill$ent of the condition prevents the o2li%ation to sell fro$arisin%.LM

!oronel v. !ourt of "ppealsL"M

distin%uished a contract to sell fro$ a contract of sale# thus6Sale# 2( its ver( nature# is a consensual contract 2ecause it is perfected 2( $ere consent. 3he

essential ele$ents of a contract of sale are the followin%6a< Consent or $eetin% of the $inds# that is# consent to transfer ownership in eFchan%e

for the price2< Deter$inate su2Hect $atter andc< Price certain in $one( or its eAuivalent.:nder this definition# a Contract toSell $a( not 2e considered as a Contract ofSale 2ecause the

first essential ele$ent is lacin%. I$ a o$"ra" "o %e((, "/e *ro%*e"#e %e((er e


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&rt. 4"!. & pro$ise to 2u( and sell a deter$inate thin% for a price certain isreciprocall( de$anda2le.

&n accepted unilateral pro$ise to 2u( or to sell a deter$inate thin% for a pricecertain is 2indin% upon the pro$issor if the pro$ise is supported 2( a considerationdistinct fro$ the price.& contract to sell $a( thus 2e defined as a 2ilateral contract where2( the prospective seller# while

eFpressl( reservin% the ownership of the su2Hect propert( despite deliver( thereof to the prospective2u(er# 2inds hi$self to sell the said propert( eFclusivel( to the prospective 2u(er upon fulfill$ent of thecondition a%reed upon# that is# full pa($ent of the purchase price.

& contract to sell as defined hereina2ove# $a( not even 2e considered as a conditional contractof sale where the seller $a( liewise reserve title to the propert( su2Hect of the sale until the fulfill$ent ofa suspensive condition# 2ecause in a conditional contract of sale# the first ele$ent of consent is present#althou%h it is conditioned upon the happenin% of a contin%ent event which $a( or $a( not occur. If thesuspensive condition is not fulfilled# the perfection of the contract of sale is co$pletel( a2ated. owever#if the suspensive condition is fulfilled# the contract of sale is there2( perfected# such that if there hadalread( 2een previous deliver( of the propert( su2Hect of the sale to the 2u(er# ownership theretoauto$aticall( transfers to the 2u(er 2( operation of law without an( further act havin% to 2e perfor$ed 2(the seller.

I$ a o$"ra" "o %e((, u*o$ "/e u(#((e$" o "/e %u%*e$%#e o$'#"#o$ /#/ #% "/e u((*aye$" o "/e *ur/a%e *r#e, o$er%/#* #(( $o" au"oa"#a((y "ra$%er "o "/e buyer a("/ou&/ "/e*ro*er"y ay /ae bee$ *re#ou%(y 'e(#ere' "o /#. !/e *ro%*e"#e %e((er %"#(( /a% "o o$ey

"#"(e "o "/e *ro%*e"#e buyer by e$"er#$& #$"o a o$"ra" o ab%o(u"e %a(e .L-M

7urther#!hua v. !ourt of "ppealsL!Mcited this distinction 2etween a contract of sale and a contract to sell6

In a contract of sale# the title to the propert( passes to the vendee upon the deliver( of the thin%sold in a contract to sell# ownership is# 2( a%ree$ent# reserved in the vendor and is not to pass to thevendee until full pa($ent of the purchase price. Otherwise stated# in a contract of sale# the vendor losesownership over the propert( and cannot recover it until and unless the contract is resolved or rescindedwhereas# in a contract to sell# title is retained 2( the vendor until full pa($ent of the price. In the lattercontract# pa($ent of the price is a positive suspensive condition# failure of which is not a 2reach 2ut anevent that prevents the o2li%ation of the vendor to conve( title fro$ 2eco$in% effective. L4M

It is not the title of the contract# 2ut its eFpress ter$s or stipulations that deter$ine the ind of contract enteredinto 2( the parties. In this case# the contract entitled Deed of Conditional Sale is actuall( a contract to sell. 3hecontract stipulated that as soon as the full consideration of the sale has been paid- thevendee, thecorresponding transfer documents shall be executed by the vendorto the vendee for the portionsold.L4M =here the vendor pro$ises to eFecute a deed of a2solute sale upon the co$pletion 2( the vendee of thepa($ent of the price# the contract is onl( a contract to sell. L4)M 3he aforecited stipulation shows that the vendors reservedtitle to the su2Hect propert( until full pa($ent of the purchase price.

If respondents paid the Spouses Na2us in accordance with the stipulations in the Deed of Conditional Sale# theconsideration would have 2een full( paid in 'une !-. 3hus# durin% the last wee of 'anuar( !-4# 'ulie Na2usapproached 'oaAuin Pacson to as for the full pa($ent of the lot. 'oaAuin Pacson a%reed to pa(# 2ut told her to returnafter four da(s as his dau%hter# Catalina Pacson# would have to %o over the nu$erous receipts to deter$ine the 2alanceto 2e paid.

=hen 'ulie Na2us returned after four da(s# 'oaAuin Pacson sent 'ulie Na2us and his dau%hter# Catalina# to &tt(.Elia2eth Rillera for the eFecution of the deed of sale. Since Bate Na2us had alread( died# and was survived 2( 'ulie andtheir $inor dau%hter# &tt(. Rillera reAuired 'ulie Na2us to return in four da(s with the necessar( docu$ents such as thedeed of eFtraHudicial settle$ent# the transfer certificate of title in the na$es of 'ulie Na2us and $inor 1ichelle Na2us# andthe %uardianship papers of 1ichelle. owever# 'ulie Na2us did not return.

&s vendees %iven possession of the su2Hect propert(# the ownership of which was still with the vendors# thePacsons should have protected their interest and inAuired fro$ 'ulie Na2us wh( she did not return and then followedthrou%h with full pa($ent of the purchase price and the eFecution of the deed of a2solute sale. 3he Spouses Pacson hadthe le%al re$ed( of consi%nin% their pa($ent to the court however# the( did not do so. & ru$or that the propert( had2een sold to Bett( 3olero pro$pted the$ to chec the veracit( of the sale with the Re%ister of Deeds ofthe Province of Ben%uet. 3he( found out that on 1arch 5# !-4# 'ulie Na2us sold the sa$e propert( to Bett(3olero throu%h a Deed of &2solute Sale# and new transfer certificates of title to the propert( were issued to 3olero.
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3hus# the Spouses Pacson filed this case for the annul$ent of the contract of a2solute sale eFecuted in favor ofBett( 3olero and the transfer certificates of title issued in her na$e.

:nfortunatel( for the Spouses Pacson# since the Deed of Conditional Sale eFecuted in their favor was $erel( acontract to sell# the o2li%ation of the seller to sell 2eco$es de$anda2le onl( upon the happenin% of the suspensivecondition.L4M 3he full pa($ent of the purchase price is the positive suspensive condition# "/e a#(ure o /#/ #% $o" abrea/ o o$"ra", bu" %#*(y a$ ee$" "/a" *ree$"e' "/e ob(#&a"#o$ o "/e e$'or "o o$ey "#"(e ro a+u#r#$&b#$'#$& ore.L44M3hus# for its non*fulfil$ent# there is no contract to spea of# the o2li%or havin% failed to perfor$ thesuspensive condition which enforces a Huridical relation. L45M =ith this circu$stance# there can 2e no rescission or fulfil$entof an o2li%ation that is still non*eFistent# the suspensive condition not havin% occurred as (et. L4ME$phasis should 2e$ade that the 2reach conte$plated in &rticle ! of the New Civil Code is the o2li%ors failure to co$pl( with ano2li%ation alread( eFtant# not a failure of a condition to render 2indin% that o2li%ation. L4"M

3he trial court# therefore# erred in appl(in% &rticle ! of the Civil Code L4-Min this case 2( orderin% fulfill$ent of

the o2li%ation# that is# the eFecution of the deed of a2solute sale in favor of the Spouses Pacson upon full pa($ent of thepurchase price# which decision was affir$ed 2( the Court of &ppeals. "-ala (ife Insurance, Inc. v. &a- urton'evelopment !orporationL4!Mheld6

Evidentl(# 2efore the re$ed( of specific perfor$ance $a( 2e availed of# there $ust 2e

a brea/of the contract.

:nder a contract to sell# the title of the thin% to 2e sold is retained 2( the seller until the purchaser$aes full pa($ent of the a%reed purchase price. Such pa($ent is a positive suspensive condition# thenon*fulfill$ent of which is $o"a brea/ o o$"ra" 2ut $erel( an event that prevents the seller fro$conve(in% title to the purchaser. 3he non*pa($ent of the purchase price renders the contract tosell ineffective and without force and effect. 3hus# a cause of action for specific perfor$ance does notarise.L5M

Since the contract to sell was without force and effect# 'ulie Na2us a(#'(yconve(ed the su2Hect propert( toanother 2u(er# petitioner Bett( 3olero# throu%h a contract of a2solute sale# and on the stren%th thereof# new transfercertificates of title over the su2Hect propert( were dul( issued to 3olero.L5M

3he Spouses Pacson# however# have the ri%ht to the rei$2urse$ent of their pa($ents to the Na2uses# and areentitled to the award of no$inal da$a%es. 3he Civil Code provides6

&rt. ))). No$inal da$a%es are adHudicated in order that a ri%ht of the plaintiff# which has 2eenviolated or invaded 2( the defendant# $a( 2e vindicated or reco%nied# and not for the purpose ofinde$nif(in% the plaintiff for an( loss suffered 2( hi$.

&rt. )))). 3he court $a( award no$inal da$a%es in ever( o2li%ation arisin% fro$ an( source

enu$erated in article 5"# or in ever( case where an( propert( ri%ht has 2een invaded.

&s stated 2( the trial court# under the Deed of Conditional Sale# respondents had the ri%ht to de$and fro$petitioners 'ulie and 1ichelle Na2us that the latter eFecute in their favor a deed of a2solute sale when the( were read( topa( the re$ainin% 2alance of the purchase price. 3he Na2uses had the correspondin% dut( to respect the respondentsri%ht# 2ut the( violated such ri%ht# for the( could no lon%er eFecute the docu$ent since the( had sold the propert( to Bett(3olero.L5)M ence# no$inal da$a%es in the a$ount of P#. are awarded to respondents.

Respondents are not entitled to $oral da$a%es 2ecause contracts are not referred to in &rticle ))! L5Mof the CiviCode# which enu$erates the cases when $oral da$a%es $a( 2e recovered. &rticle )))L54Mof the Civil Code allows therecover( of $oral da$a%es in brea/e% o o$"ra"where the defendant acted fraudulentl( or in 2ad faith. oweverthis case involves a contract to sell# wherein full pa($ent of the purchase price is a positive suspensive condition# thenon*fulfill$ent of which is $o"a brea/ o o$"ra", 2ut $erel( an event that prevents the seller fro$ conve(in% title tothe purchaser. Since there is no 2reach of contract in this case# respondents are not entitled to $oral da$a%es.

In the a2sence of $oral# te$perate# liAuidated or co$pensator( da$a%es# eFe$plar( da$a%es cannot 2e %ranted

for the( are allowed onl( in addition to an( of the four inds of da$a%es $entioned. L55M
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5HEREFORE# the petition is GRAN!ED. 3he Decision of the Court of &ppeals in C&*+.R. C, No. 44!4# datedNove$2er )-# )# is RE6ERSEDand SE! ASIDE. 'ud%$ent is here2( rendered upholdin% the validit( of the sale ofthe su2Hect propert( $ade 2( petitioners 'ulie Na2us and 1ichelle Na2us in favor of petitioner Bett( 3olero# as well as thevalidit( of 3ransfer Certificates of 3itle Nos. 3*-5 and 3*-5 issued in the na$e of Bett( 3olero. Petitioners 'ulieNa2us and 1ichelle Na2us are ORDERED to REIMURSE respondents spouses 'oaAuin and 'ulia Pacson the su$ oOne undred 3welve 3housand 7our undred 7ift(*7ive Pesos and SiFteen Centavos ;P)#455.


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MI-A A. REES ,

Petitioner#

* versus *

6I!ORIA !. !UPARAN# Respondent.

G.R. No. 1880;?

Present6C&RPIO# .# !hairperson#N&C:RPER&/3&B&D# and1ENDO .

Pro$ul%ated6 'une # )

? *****************************************************************************************************?

D E I S I O N

Su2Hect of this petition for review is the 7e2ruar( # )! Decision LMof the Court of &ppeals /!"0which affir$edwith $odification the 7e2ruar( ))# ) Decision L)Mof the Re%ional 3rial Court# Branch ")# ,alenuela Cit( /&T!0, in CiviCase No. !45*,*!)# an action for Rescission of Contract with Da$a%es.

On Septe$2er # !!)# 1ila &. Re(es /petitioner0filed a co$plaint for Rescission of Contract with Da$a%esa%ainst ,ictoria 3. 3uparan /respondent02efore the R3C. In her Co$plaint# petitioner alle%ed# a$on% others# that shewas the re%istered owner of a #)"4 sAuare $eter residential and co$$ercial lot located in Qaruhatan# ,alenuela Cit(and covered 2( 3C3 No. ,*4 that on that propert(# she put up a three*store( co$$ercial 2uildin% nown as RB'Buildin% and a residential apart$ent 2uildin% that since !!# she had 2een operatin% a dru%store and cos$etics store onthe %round floor of RB' Buildin% where she also had 2een residin% while the other areas of the 2uildin%s includin% thesidewals were 2ein% leased and occupied 2( tenants and street vendors.

In Dece$2er !-!# respondent leased fro$ petitioner a space on the %round floor of the RB' Buildin% for her

pawnshop 2usiness for a $onthl( rental of 4#.. & close friendship developed 2etween the two which led to therespondent investin% thousands of pesos in petitioners financin%Tlendin% 2usiness fro$ 7e2ruar( "# !! to 1a( )"!!# with interest at the rate of a $onth.

On 'une )# !--# petitioner $ort%a%ed the su2Hect real properties to the 7ar$ers Savin%s Ban and /oan Ban#

Inc. /FS( an0to secure a loan of )##. pa(a2le in install$ents. On Nove$2er 5# !!# petitionersoutstandin% account on the $ort%a%e reached )#)"-#"-.. Petitioner then decided to sell her real properties for atleast #5#. so she could liAuidate her 2an loan and finance her 2usinesses. &s a %esture of friendshiprespondent ver2all( offered to conditionall( 2u( petitioners real properties for 4#)#. pa(a2le on install$ent 2asis

without interest and to assu$e the 2an loan. 3o induce the petitioner to accept her offer# respondent offered the followin%conditionsTconcessions6

. 3hat the conditional sale will 2e cancelled if the plaintiff ;petitioner< can find a 2u(er of saidproperties for the a$ount of #5#. within the neFt three ;< $onths provided all a$ountsreceived 2( the plaintiff fro$ the defendant ; respondent< includin% pa($ents actuall( $ade 2( defendantto 7ar$ers Savin%s and /oan Ban would 2e refunded to the defendant with additional interest of siF;< $onthl(

). 3hat the plaintiff would continue usin% the space occupied 2( her and dru%store and cos$etics

store without an( rentals for the duration of the install$ent pa($ents
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. 3hat there will 2e a lease for fifteen ;5< (ears in favor of the plaintiff over the space for

dru%store and cos$etics store at a $onthl( rental of onl( -#. after full pa($ent of the stipulatedinstall$ent pa($ents are $ade 2( the defendant

4. 3hat the defendant will undertae the renewal and pa($ent of the fire insurance policies on the

two ;)< su2Hect 2uildin%s followin% the eFpiration of the then eFistin% fire insurance polic( of the plaintiff upto the ti$e that plaintiff is full( paid of the total purchase price of 4#)#.. LM

&fter petitioners ver2al acceptance of all the conditionsTconcessions# 2oth parties wored to%ether to o2tain 7S/

Bans approval for respondent to assu$e her ;petitioners< outstandin% 2an account. 3he assu$ption would 2e part orespondents purchase price for petitioners $ort%a%ed real properties. 7S/ Ban approved their proposal on the conditionthat petitioner would si%n or re$ain as co*$aer for the $ort%a%e o2li%ation assu$ed 2( respondent.

On Nove$2er )# !!# the parties and 7S/ Ban eFecuted the correspondin% Deed of Conditional Sale of Real

Properties with &ssu$ption of 1ort%a%e. Due to their close personal friendship and 2usiness relationship# 2oth partieschose not to reduce into writin% the other ter$s of their a%ree$ent $entioned in para%raph of the co$plaint. Besides#7S/ Ban did not want to incorporate in the Deed of Conditional Sale of Real Properties with &ssu$ption of 1ort%a%e an(other side a%ree$ent 2etween petitioner and respondent.

:nder the Deed of Conditional Sale of Real Properties with &ssu$ption of 1ort%a%e# respondent was 2ound to

pa( the petitioner a lu$p su$ of .) $illion pesos without interest as part of the purchase price in three ;< fiFedinstall$ents as follows6

a< )#. J due 'anuar( # !!2< )#. J due 'une # !!c< -#. J due Dece$2er # !!Respondent# however# defaulted in the pa($ent of her o2li%ations on their due dates. Instead of pa(in% the

a$ounts due in lu$p su$ on their respective $aturit( dates# respondent paid petitioner in s$all a$ounts fro$ ti$e toti$e. 3o co$pensate for her dela(ed pa($ents# respondent a%reed to pa( petitioner an interest of a $onth. &sof &u%ust # !!)# respondent had onl( paid !5#.# leavin% a 2alance of -5#. as principal on the unpaid install$ents and 4#-!.)5 as unpaid accu$ulated interest.

Petitioner further averred that despite her success in findin% a prospective 2u(er for the su2Hect real properties

within the *$onth period a%reed upon# respondent rene%ed on her pro$ise to allow the cancellation of their deed of

conditional sale. Instead# respondent 2eca$e interested in ownin% the su2Hect real properties and even wanted to convertthe entire propert( into a $odern co$$ercial co$pleF. Nonetheless# she consented 2ecause respondent repeatedl(professed friendship and assured her that all their ver2al side a%ree$ent would 2e honored as shown 2( the fact thatsince Dece$2er !!# she ;respondent< had not collected an( rentals fro$ the petitioner for the space occupied 2( herdru%store and cos$etics store.

On 1arch !# !!)# the residential 2uildin% was %utted 2( fire which caused the petitioner to lose rental inco$e in

the a$ount of -#. a $onth since &pril !!). Respondent ne%lected to renew the fire insurance polic( on thesu2Hect 2uildin%s.

Since Dece$2er !!# respondent had taen possession of the su2Hect real properties and had 2een

continuousl( collectin% and receivin% $onthl( rental inco$e fro$ the tenants of the 2uildin%s and vendors of the sidewalfrontin% the RB' 2uildin% without sharin% it with petitioner.

On Septe$2er )# !!)# respondent offered the a$ount of "5#. onl( pa(a2le on Septe$2er "# !!)# as

full pa($ent of the purchase price of the su2Hect real properties and de$anded the si$ultaneous eFecution of thecorrespondin% deed of a2solute sale.

Re%*o$'e$"@% A$%er

Respondent countered# a$on% others# that the tripartite a%ree$ent erroneousl( desi%nated 2( the petitioner as a

Deed of Conditional Sale of Real Propert( with &ssu$ption of 1ort%a%e was actuall( a pure and a2solute contract of salewith a ter$ period. It could not 2e considered a conditional sale 2ecause the acAuisition of contractual ri%hts and theperfor$ance of the o2li%ation therein did not depend upon a future and uncertain event. 1oreover# the capital %ains anddocu$entar( sta$ps and other $iscellaneous eFpenses and real estate taFes up to !! were supposed to 2e paid 2(petitioner 2ut she failed to do so.
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Respondent further averred that she successfull( rescued the properties fro$ a definite foreclosure 2( pa(in% the

assu$ed $ort%a%e in the a$ount of )#)"-#"-. plus interest and other finance char%es. Because of her pa($ent# shewas a2le to o2tain a deed of cancellation of $ort%a%e and secure a release of $ort%a%e on the su2Hect real propertiesincludin% petitioners ancestral residential propert( in Sta. 1aria# Bulacan.

Petitioners clai$ for the 2alance of the purchase price of the su2Hect real properties was 2aseless and

unwarranted 2ecause the full a$ount of the purchase price had alread( 2een paid# as she did pa( $ore than4#)#.# the a%reed purchase price of the su2Hect real properties# and she had even introduced i$prove$ents

thereon worth $ore than 4#-#.. &s the parties could no lon%er 2e restored to their ori%inal positions# rescissioncould not 2e resorted to.

Respondent added that as a result of their 2usiness relationship# petitioner was a2le to o2tain fro$ her a loan in

the a$ount of 4#. with interest and too several pieces of Hewelr( worth )#.. Petitioner also failed and refused to pa( the $onthl( rental of )#. since Nove$2er # !! up to the present for the use and occupanc( ofthe %round floor of the 2uildin% on the su2Hect real propert(# thus# accu$ulatin% arreara%es in the a$ount of 4"#.as of Octo2er !!).

Ru(#$& o "/e R!

On 7e2ruar( ))# )# the R3C handed down its decision findin% that respondent failed to pa( in full the 4.)$illion total purchase price of the su2Hect real properties leavin% a 2alance of -5#.. It stated that the checs andreceipts presented 2( respondent refer to her pa($ents of the $ort%a%e o2li%ation with 7S/ Ban and not the pa($ent of

the 2alance of #)#.. 3he R3C also considered the Deed of Conditional Sale of Real Propert( with &ssu$ptionof 1ort%a%e eFecuted 2( and a$on% the two parties and 7S/ Ban a contract to sell# and not a contract of sale. It was othe opinion that althou%h the petitioner was entitled to a rescission of the contract# it could not 2e per$itted 2ecause hernon*pa($ent in full of the purchase price $a( not 2e considered as su2stantial and funda$ental 2reach of the contractas to defeat the o2Hect of the parties in enterin% into the contract. L4M3he R3C 2elieved that the respondents offer stated inher counsels letter datedSepte$2er )# !!) to settle what she thou%ht was her unpaid 2alance of "5#. showedher sincerit( and willin%ness to settle her o2li%ation. ence# it would 2e $ore eAuita2le to %ive respondent a chance topa( the 2alance plus interest within a %iven period of ti$e.

7inall(# the R3C stated that there was no factual or le%al 2asis to award da$a%es and attorne(s fees 2ecausethere was no proof that either part( acted fraudulentl( or in 2ad faith.

3hus# the dispositive portion of the R3C Decision reads6

=ERE7ORE# Hud%$ent is here2( rendered as follows6. &llowin% the defendant to pa( the plaintiff within thirt( ;< da(s fro$ the finalit( hereof the

a$ount of -5#.# representin% the unpaid purchase price of the su2Hect propert(# with interestthereon at ) a $onth fro$ 'anuar( # !!)until full( paid. 7ailure of the defendant to pa( said a$ountwithin the said period shall cause the auto$atic rescission of the contract ;Deed of Conditional Sale ofReal Propert( with &ssu$ption of 1ort%a%e< and the plaintiff and the defendant shall 2e restored to theirfor$er positions relative to the su2Hect propert( with each returnin% to the other whatever 2enefits eachderived fro$ the transaction

). Directin% the defendant to allow the plaintiff to continue usin% the space occupied 2( her for

dru%store and cos$etic store without an( rental pendin% pa($ent of the aforesaid 2alance of thepurchase price.

. Orderin% the defendant# upon her full pa($ent of the purchase price to%ether with interest# to

eFecute a contract of lease for fifteen ;5< (ears in favor of the plaintiff over the space for the dru%storeand cos$etic store at a fiFed $onthl( rental of -#. and

4. Directin% the plaintiff# upon full pa($ent to her 2( the defendant of the purchase price to%etherwith interest# to eFecute the necessar( deed of sale# as well as to pa( the Capital +ains 3aF# docu$entar(sta$ps and other $iscellaneous eFpenses necessar( for securin% the BIR Clearance# and to pa( the real
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estate taFes due on the su2Hect propert( up to !!# all necessar( to transfer ownership of the su2Hectpropert( to the defendant.

No pronounce$ent as to da$a%es# attorne(s fees and costs.SO ORDERED.L5M

Ru(#$& o "/e A

On 7e2ruar( # )!# the C& rendered its decision affir$in% with $odification the R3C Decision. 3he C& a%reedwith the R3C that the contract entered into 2( the parties is a contract to sell 2ut ruled that the re$ed( of rescission couldnot appl( 2ecause the respondents failure to pa( the petitioner the 2alance of the purchase price in the total a$ount of

-5#. was not a 2reach of contract# 2ut $erel( an event that prevented the seller ;petitioner< fro$ conve(in% title tothe purchaser ;respondent


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AND AUSED I!S DISRE!ION IN REDUING !HE IN!ERES! ON !HE 80),000.00 !O ON- ;PER ANNUM S!AR!ING FROM !HE DA!E OF FI-ING OF !HE OMP-AIN! ON SEP!EMER 11,1992 DESPI!E !HE PERSONA- OMMI!MEN! OF !HE RESPONDEN! AND AGREEMEN!E!5EEN !HE PAR!IES !HA! RESPONDEN! 5I-- PA IN!ERES! ON !HE 80),000.00 A! !HERA!E OF ; MON!H- S!AR!ING !HE DA!E OF DE-IN:UEN ON DEEMER 31, 1991.

D. !HE OUR! OF APPEA-S SERIOUS- ERRED AND AUSED I!S DISRE!ION IN!HE APPREIA!ION ANDOR MISAPPREIA!ION OF FA!S RESU-!ING IN!O !HE DENIA- OF!HE -AIM OF PE!I!IONER REES FOR A!UA- DAMAGES 5HIH ORRESPOND !O !HEMI--IONS OF PESOS OF REN!A-SFRUI!S OF !HE SUE! REA- PROPER!IES 5HIHRESPONDEN! !UPARAN O--E!ED ON!INUOUS- SINE DEEMER 1990, E6EN 5I!H!HE UNPAID A-ANE OF 80),000.00 AND DESPI!E !HE FA! !HA! RESPONDEN! DID NO!ON!RO6ER! SUH -AIM OF !HE PE!I!IONER AS ON!AINED IN HER AMENDED OMP-AIN!DA!ED APRI- 22, 200;.

E. !HE OUR! OF APPEA-S SERIOUS- ERRED AND AUSED I!S DISRE!ION IN!HE APPREIA!ION OF FA!S RESU-!ING IN!O !HE DENIA- OF !HE -AIM OF PE!I!IONERREES FOR !HE 29,;09.00 A REN!A-S !HA! 5ERE O--E!ED RESPONDEN!!UPARAN FROM !HE O-D !ENAN!S OF !HE PE!I!IONER.

F. !HE OUR! OF APPEA-S SERIOUS- ERRED AND AUSED I!S DISRE!ION INDENING !HE PE!I!IONER@S EAR-IER URGEN! MO!ION FOR ISSUANE OF A PRE-IMINARMANDA!OR AND PROHII!OR INUN!ION DA!ED U- 7, 2008 AND !HE SUPP-EMEN!!HERE!O DA!ED AUGUS! ?, 2008 !HERE ONDONING !HE UNUS!IFIA-EFAI-UREREFUSA- OF UDGE F-ORO A-EO !O RESO-6E 5I!HIN E-E6EN B11C EARS !HEPE!I!IONER@S !HREE B3C SEPARA!E MO!IONS FOR PRE-IMINAR INUN!ION !EMPORARRES!RAINING ORDER, AOUN!ING AND DEPOSI! OF REN!A- INOME DA!ED MARH 17,199), AUGUS! 19, 199; AND ANUAR 7, 200; !HERE PERMI!!ING !HE RESPONDEN! !OUNUS!- ENRIH HERSE-F ON!INUOUS- O--E!ING A-- !HE REN!A-SFRUI!S OF!HE SUE! REA- PROPER!IES 5I!HOU! AN AOUN!ING AND OUR! DEPOSI! OF !HEO--E!ED REN!A-SFRUI!S AND !HE PE!I!IONERS URGEN! MO!ION !O DIRE!DEFENDAN! 6I!ORIA !UPARAN !O PA !HE AUMU-A!ED UNPAID REA- ES!A!E !AESAND SEF !AES ON !HE SUE! REA- PROPER!IES DA!ED ANUAR 13, 2007 !HERE

EPOSING !HE SUE! REA- PROPER!IES !O IMMINEN! AU!ION SA-E !HE I!!REASURER OF 6A-ENUE-A I!.

G. !HE OUR! OF APPEA-S SERIOUS- ERRED AND AUSED I!S DISRE!ION INDENING !HE PE!I!IONER@S -AIM FOR MORA- AND EEMP-AR DAMAGES ANDA!!ORNE@S FEES AGAINS! !HE RESPONDEN!.In su$# the crucial issue that needs to 2e resolved is whether or not the C& was correct in rulin% that there was no

le%al 2asis for the rescission of the Deed of Conditional Sale with &ssu$ption of 1ort%a%e.

Po%#"#o$ o "/e Pe"#"#o$er

3he petitioner 2asicall( ar%ues that the C& should have %ranted the rescission of the su2Hect Deed of ConditionaSale of Real Properties with &ssu$ption of 1ort%a%e for the followin% reasons6

. 3he su2Hect deed of conditional sale is a reciprocal o2li%ation whose outstandin% characteristicis reciprocit( arisin% fro$ identit( of cause 2( virtue of which one o2li%ation is correlative of the other.

). 3he petitioner was rescindin% J not enforcin% J the su2Hect Deed of Conditional Sale pursuant

to &rticle ! of the Civil Code 2ecause of the respondents failureTrefusal to pa( the -5#.2alance of the total purchase price of the petitioners properties within the stipulated period endin%Dece$2er # !!.

. 3here was no sli%ht or casual 2reach on the part of the respondent 2ecause she ;respondent ave (ou $et the owner of the lot $entioned a while a%o

& 8es# (our onor# I $et Dr. Salaar# the owner# so$eti$e last wee of &pril# !-! atDi$su$ Restaurant.

> 8ou $et at Di$su$# in what particular place was that

& =e $et at Di$su$ Restaurant in 1aati after I was called 2( E$ilio 3. Salaar to $eetat Di$su$ 2ecause Dr. Salaar wanted to sell the propert( and he wanted to tal to (ouLsicM.

CO:R36

3al to (ou

& 3o discuss the $atter of sale to $e at Di$su$ Sir

&338. BORRES6

> &nd so (ou reall( $et at Di$su$.


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& 8es# 1aKa$.

> =hat transpired at Di$su$

& Dr. Salaar offered $e to 2u( the properties for a total of ONE 1I//ION PESOS;P##.< eFcludin% all and an( other eFpenses that $a( 2e involved in thetransfer of the properties in case I a$ interested to 2( LsicM# in case &tt(. Borres wanted to2u(.

> =hat then was (our repl(

& I a$ interested to 2u(.

> Dr. Salaar. . . I ased . . . what did Dr. Salaar sa( after that

& I answered Dr. Salaar that I could 2u( or a2le to 2u( the properties within siF ; =hat did Dr. Salaar sa( re%ardin% (our proposal

& I told Dr. Salaar. Dr. Salaar said that he could not wait for that siF ;< $onths is a ver(lon% ti$e.

> =hat else did (ou sa(

& I told Dr. Salaar that @it is possi2le I can pa( within three ;< $onthsK ti$e if (our canlend $e the title of (our propert( 2ecause 2ans here in 1anila usuall( release loans inthree $onthsK ti$e and I will have less pro2le$ to co$plete the pa($ent of ONE1I//ION PESOS ;P##. So# what did Dr. Salaar sa(

& Dr. Salaar said that @if it is the 2est for our transaction I can lend (ou the title providedI can 2e assured that the title will not pass on -ou until -ou are full- paid.

> =hat was (our answer then

& I told Dr. Salaar that I can e5ecute a warrant- to the effect that the propert- could note transferred to me until I have full- paid him.

> =hat did Dr. Salaar sa(

& Dr. Salaar said @I will a%ree to that@

CO:R36

Dr. Salaar told (ou that he is a%reea2le to the proposal.

& 8es# Dr. Salaar said @(ou prepare a craft# the necessar( docu$ent and 2rin% it toBataan.

&338. BORRES6

> &nd what was (our answer to Dr. Salaar


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& I answered Dr. Salaar that @I will 2e ever willin% to %o to Bataan an( ti$e (ou wanted$e to %o.

> &nd (ou reall( did %o to Bataan.

& 8es# I did.

FFF FFF FFF

&338 BORRES6

> &nd what happened while there in Bataan

FFF FFF FFF

> &nd what happened while (ou %ot all seated in the sala of Dr. Salaar.

& I showed hi$ a docu$ent which he instructed $e to prepare and he has read it anda%reed to the Deed of &2solute Sale and the warrant( I $ade. e %ave $e 2ac thedocu$ents for si%nin%.

> &nd (ou did si%n the docu$ent

& 8es# I did si%n it and passed it on to Dr. Salaar.

> &fter (ou passed it to Dr. Salaar# what happened

& Dr. Salaar did not si%n the docu$ent and told $e that he is onl( %oin% to si%n it if I a$%oin% to pa( 2( the end of 'une and that he could not lend $e the title and he said he isgoing to sign it and not to give me a cop- until the purchase price is full- paid.

> &nd what was (our reaction with the state$ent

& I said @what a2out the loan that we have a %reed at Di$su$ if (ou will not lend $e thetitle and the docu$ent that we have si%ned new@ Dr. Salaar said @I could not lend (outhe title and I care less how (our are %oin% to loan the propert( and raise the $one( (ouare %oin% to pa( $e# what is i$portant to $e is (ou pa( $e the whole a$ount of One1illion Pesos ;P##.< not late than 'une # !-!.@

> &nd what did (ou sa(

& Since I could not do an(thin% and I reall( wanted to 2u( the propert(# I a%reed to Dr.SalaarKs condition that I pa( the propert( 2( the end of 'une and I will pa( onl( at the2an in 1aati.

> &nd what did Dr. Salaar sa(

& Dr. Salaar said @oe( I will si%n this and have this notaried 2ut I could not lend (ouand never have a Lcop(M of the title as well as the Deed of Sale and (ou Hust wait oatN&I& and wait if (ou could have this docu$ent 2ecause I a$ leavin% on 'une ) for the:S. 8ou $eet $e there@.

> &nd after that what did Dr. Salaar do


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& It was onl( when that he si%ned the docu$ent after I have a%reed to his proposal 2uthe was ver( $uch stand LsicM to the pa($ents and he was no lon%er the sa$e when I$et hi$ at Di$su$. 13

Clearl( then# the ori%inal intention in the eFecution of the Deed of &2solute Sale was to i$ple$ent the proposal of Borresthat Salaar @lend@ her the transfer certificates of title so that she could secure a loan fro$ a 2an in 1anila whoseproceeds would 2e applied to the pa($ent of the purchase price of the propert(# and the ori%inal purpose of the Deed of

=arrant( was to assure Salaar that# as de$anded 2( hi$# title to the lots will not pass to her until she pa(s the fullconsideration. 3he lendin% of the certificates of title for the a2ove purpose could have 2een acco$plished throu%h aspecial power of attorne( under which Salaar will authorie her to o2tain a loan and to $ort%a%e the propert( as securit(therefor. But# perhaps anticipatin% SalaarKs departure to the :nited States of &$erica where he resides# Borres# who is alaw(er# prepared instead a Deed of &2solute Sale and Deed of =arrant(. Notwithstandin% BorreKs deli2eratecharacteriations of the docu$ents# we are convinced that the( were prepared in connection with and in theimplementation of the a%ree$ent re%ardin% the lendin% of the certificates of title. 3he( do not weaen the ada$antineposition of Salaar not to part with his title to the two lots until full pa($ent of the a%reed price therefor. BorreKs eFecutionof the Deed of =arrant( was in fact a reco%nition of SalaarKs position. Despite its careful wordin%s and phraseolo%( to$ae so$e sort of distinction 2etween BorreKs ri%ht to the ownership or titleover the lots on the one hand# and her ri%ht topossess or eep the Deed of &2solute Sale and the other docu$ents relative to the lots# the totalit( of the Deed of=arrant( $anifests an indu2ita2le reco%nition 2( Borres of the afore$entioned intention of Salaar. She declares therein

as follows6

. 3hat until and unless the a$ount of ONE 1I//ION ;P##.< PESOS representin% the purchaseprice for that parcels of land covered 2( 3ransfer Certificate of 3itle Nos. S*- and S*! 2e paid 2(the undersi%ned unto Dr. E$ilio &. Salaar# the undersi%ned has no a2solute ri%ht whatsoever to theori%inal copies of the Deed of &2solute Sale eFecuted 2( said Dr. E$ilio &. Salaar date 1a( VVVV# !-!

). 3hat she has no le%al ri%ht whatsoever to an( and all pertinent records of the afore$entioned lots

. 3hat upon pa($ent of the afore$entioned a$ount# Dr. E$ilio &. Salaar or his representative iso2li%ed to surrender the ori%inal of these presents to%ether with all the ori%inal docu$ents and titlescoverin% the sale of the afore$entioned lots unto the undersi%ned. 1?

3hen# too# in her 1e$orandu$ of &%ree$ent with 1onteland Realt( Corporation# 1)dated 5 'une !-!# Borres eFplicitl($entioned onl( her @ri%hts and interests@ under the Deed of &2solute Sale si%ned 2( Salaar and therein conve(ed#transferred# and assi%ned to the said corporation onl( such @ri%hts and interest.@ &lso worth notin% is the state$ent in thesecond whereasclause of the 1e$orandu$ of &%ree$ent that 1onteland Realt( Corporation

has full nowled%e of the sales LsicM and conditions of the SE//ER*O=NER of the propert( . . . that the2u(er LBorresM has an o2li%ation to pa( DR. E1I/IO S&/&&R the a$ount of ONE 1I//ION PESOS;P##.< and that there is alread( a Deed of &2solute Deed of LsicM Sale in favor of LBorresM ofwhich 2oth copies of the titles of the properties for sale and all docu$ents includin% the Deed of &2solute

Sale afore$entioned are includin% the Deed of &2solute Sale afore$entioned are under the custod( of1S. 3ERES& DION who will onl( release the 3itle and the Deed of &2solute Sale after the o2li%ation ofLBorresM is full(paid. 1;

3he withholdin% 2( Salaar throu%h Dion of the Deed of &2solute Sale# the certificates of title# and all other docu$entsrelative to the lots is an additional indu2ita2le proof that Salaar did not transfer to Borres either 2( actual or constructivedeliver( the ownership of the two lots. =hile %enerall( the eFecution of a deed of a2solute sale constitutes constructivedeliver( of ownership# the withholdin% 2( the vendor of that deed under eFplicit a%ree$ent that it 2e delivered to%ether


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with the certificates of titles to the vendee onl( upon the latterKs full pa($ent of the consideration a$ounts to a suspensionof the effectivit( of the deed of sale as a 2indin% contract.

:ndou2tedl(# Salaar and Borres $utuall( a%reed that despite the Deed of &2solute Sale title to the two lots in Auestionwas not to pass to the latter until full pa($ent of the consideration of P $illion. 3he for$ of the instru$ent cannot prevailover the true intent of the parties as esta2lished 2( the evidence.

&ccordin%l(# since Borres was una2le to pa( the consideration# which was a suspensive condition# Salaar cannot 2eco$pelled to deliver to her the deed of sale# certificates of title# and other docu$ents concernin% the two lots. In otherwords# no ri%ht in her favor and no correspondin% o2li%ation on the part of Salaar were created. &rticle - of the CivilCode provides6

In conditional o2li%ations# the acAuisition of ri%hts# as well as the eFtin%uish$ent or loss of those alread(acAuired shall depend upon the happenin% of the event which constitutes the condition.

Even %rantin% for the sae of ar%u$ent that# as ruled 2( the court of &ppeals# the a%ree$ent of Salaar and Borres asevidenced 2( the Deed of &2solute Sale was a perfected contract of sale# BorreKs action for specific perfor$ance $ustliewise fail. =e are in full accord with the trial court and# perforce# disa%ree with the Court of &ppeals# that Borres was notread( to pa( P5#. on or 2efore 5 'une !-!. 3hat Borres had a chec of P.5 $illion# or of $ore than the fullconsideration of the two lots# is of no $o$ent. 3he chec# 17 dated 5 'une !-!# is a crossed chec pa(a2le to @&tt(.'onette Borres#@ or herein private respondent. 3he crossin% is of si$ple t(pe U two parallel lines at the upper left handcorner without the words @and co$pan(@ 2etween the lines. &ccordin%l(# it cannot 2e paid to an(one eFcept Borres# or itcan 2e deposited with a 2an where she eeps an account. 18

3here is a2solutel( no evidence that Borres encashed the chec and tendered to Salaar thru Dion the su$ ofP5#. on 5 'une !-!. On the contrar(# the chec itself was cancelledas shown 2( theword cancelledhandwritten across it. 1oreover# the deliver( of the chec 2( 1onteland Realt( Corporation throu%h Balaowas not unconditional. Per the receipt 19Borres si%ned on 5 'une !-!# encash$ent of the chec @it su2Hect to theverifications as to the authenticit( of docu$ents pertainin% to the su2Hect propert(.@ Neither is there evidence that Borrespaid the downpa($ent on 5 'une !-! with $one( she %ot fro$ other sources. No pa($ent appears to have 2een $adethereafter or durin% the pendenc( of the case 2efore the trial court or the Court of &ppeals. She should have consi%nedthe pa($ent in court pursuant to &rticle )5 of the Civil Code for her to 2e released fro$ her o2li%ation and#conseAuentl(# eFact fulfill$ent 2( Salaar of his correspondin% o2li%ation.

3he challen%ed decision of the Court of &ppeals $ust then 2e reversed. 3hat of the trial court $ust 2e affir$ed# with the$odification consistin% in the deletion of the award of attorne(Ks fees in favor of the petitioners which we find to 2e without2asis. 3he award of attorne(Ks fees as da$a%es is the eFception rather than the rule it is not to 2e %iven to the defendantever( ti$e the latter prevails. 3he ri%ht to liti%ate is so precious that a penalt( should not 2e char%ed on those who $a(eFercise it erroneousl(# unless# of course such part( acted in 2ad faith. 20

=ERE7ORE# the instant petition is here2( +R&N3ED. 3he challen%ed decision of )! Nove$2er !!4 of the Court of&ppeals in C&*+.R. C, No. 4!" is RE,ERSED and SE3 &SIDE# and the decision of Septe$2er !!) of Branch ofthe Re%ional 3rial Court of 1anila in Civil Case No. -!*44- is &77IR1ED# su2Hect to the $odification that the award forattorne(Ks fees is deleted.

No pronounce$ent as to costs.


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SO ORDERED.


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G.R. No. 170917 Noeber 28, 2007

SPOUSES NES!OR AS!I--O a$' ROSIE REES>AS!I--O,Petitioners#

vs.SPOUSES RUD REES a$' ONSO-AION REES,Respondents.

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailin% the Dece$2er # )5Decisionof the Court of &ppeals ;C&< in C&*+.R. C, No. "!-5.
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On Nove$2er "# !!"# E$$alia Bohler and respondents ne%otiated for the sale of the for$ers house and lot located atPo2lacion# New =ashin%ton# &lan# to the latter for the consideration of P5#..)On the followin% da(# Nove$2er -#the( si%ned an &%ree$ent which pertinentl( reads as follows6

=e# the undersi%ned# a%ree to the followin% ter$s and conditions re%ardin% the sale of the house and lot located atPo2lacion# New =ashin%ton# &lan6

. 3hat the total a$ount to 2e paid shall 2e One undred SiFt(*7ive 3housand Pesos ;P5#.< to 2e paid infull on or 2efore the 5th of Dece$2er !!"

). 3hat a partial pa($ent ;sic< a total a$ount of One undred 3hirt( 3housand Pesos ;P#.< shall 2e$ade toda(# the -th of Nove$2er !!"

. 3hat the re$ainin% 2alance in the a$ount ;sic< of 3hirt(*7ive 3housand Pesos ;P5#.< shall 2e $ade asper W a2ove

4. 3hat the 2u(ers# represented 2( the Spouses Rud( and Consolacion Re(es ;sic< shall 2e responsi2le for all thele%al and other related docu$ents and procedures re%ardin% this sale

5. 3hat the seller# represented 2( 1s. E$$alia 1. Bohler# shall vacate the said house and lot on or ;sic< the stof 'anuar(# !!-

. 3hat the tenants# represented 2( the Spouses Ro$eo and Epifania ,icente# shall vacate the sa$e on or 2eforethe th of &pril# !!- and

". 3hat all parties concerned shall a%ree to all the ter$s and conditions stipulated herein.

:pon the si%nin% of the said contract# respondents handed to Bohler P)#. cash and alle%edl( aP#.*chec.

Bohler nonetheless insisted that the entire partial pa($ent should 2e in cash as she needed it to redee$ the su2Hectpropert( fro$ the 2an on the followin% 1onda(. She hence de$anded for its pa($ent up to $idni%ht on that da(otherwise she would cancel the sale. Because the respondents failed to $ae %ood theP#.# Bohler su2seAuentl(sold the propert( to the petitioners.4

avin% learned of the su2seAuent sale# the respondents i$$ediatel( tendered the chec# ased the 2an for acertification that it was funded and consulted their law(er who sent a notice of lis pendens to the Re%ister of Deeds andthe Provincial &ssessor.5Civil Case No. " for annul$ent of sale# specific perfor$ance and da$a%es was su2seAuentl(filed 2( the respondents with the Re%ional 3rial Court ;R3C< of Qali2o# &lan a%ainst Bohler and the petitioners.

On 7e2ruar( )# )# the R3C rendered its Decisiondeclarin% the Nove$2er -# !!" &%ree$ent a contract to sell.Considerin% that no actual sale happened 2etween Bohler and the respondents# the for$er could validl( sell the propert(to the petitioners. 3hus# the trial court dis$issed the co$plaint.

&%%rieved# respondents appealed the case to the C&. In the challen%ed Dece$2er # )5 Decision# "the appellate courtreversed the trial courts rulin%# declared the Nove$2er -# !!" &%ree$ent a contract of sale# and annulled thesu2seAuent sale to the petitioners. 3he C& ruled# a$on% others# that the wordin%s of the a%ree$ent and the conduct of
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the parties su%%est that the( intended to enter into a contract of sale. Ownership was not reserved 2( the vendor and non*pa($ent of the purchase price was not $ade a condition for the contracts effectivit(.-

Petitioners# thus# filed the instant petition for review on certiorari i$putin% the followin% errors to the C&6

. 3he appellate court erred in declarin% the contract st(led &+REE1EN3 dated - Nove$2er !!" as a@contract of sale@ and not a contract to sell.

). 3he appellate court erred in declarin% the petitioners in 2ad faith when the( 2ou%ht the su2Hect $atter houseand lot on ) 1arch !!- fro$ E$$alia . Bohler.!

3he pivotal Auestion to 2e addressed 2( the Court in this petition is whether the transaction 2etween Bohler and therespondents is a perfected contract of sale or a $ere contract to sell.

Sale is a consensual contract and is perfected 2( $ere consent# which is $anifested 2( a $eetin% of the $inds as to theoffer and acceptance thereof on the su2Hect $atter# price and ter$s of pa($ent of the price.In the instant case# the

Nove$2er -# !!" &%ree$ent clearl( indicates that Bohler and the Spouses Re(es had a $eetin% of the $inds on thesu2Hect $atter of the contract# the house and lot on the price# P5#. and on the ter$s of pa($ent# an initialpa($ent of P#. on the date of eFecution of the a%ree$ent and the re$ainin% 2alance on or 2efore Dece$2er 5#!!". &t that precise $o$ent when the consent of 2oth parties was %iven# the contract of sale was perfected.

3he said a%ree$ent cannot 2e considered a contract to sell. In a contract of sale# the title to the propert( passes to thevendee upon the deliver( of the thin% sold in a contract to sell# ownership is# 2( a%ree$ent# reserved in the vendor and isnot to pass to the vendee until full pa($ent of the purchase price. Otherwise stated# in a contract of sale# the vendor losesownership over the propert( and cannot recover it until and unless the contract is resolved or rescinded whereas# in acontract to sell# title is retained 2( the vendor until full pa($ent of the price. In the latter contract# pa($ent of the price is a

positive suspensive condition# failure of which is not a 2reach 2ut an event that prevents the o2li%ation of the vendor toconve( title fro$ 2eco$in% effective.3he Nove$2er -# !!" &%ree$ent herein cannot 2e characteried as a contract tosell 2ecause the seller $ade no eFpress reservation of ownership or title to the su2Hect house and lot. )Instead# the&%ree$ent contains all the reAuisites of a contract of sale.

=ERE7ORE# pre$ises considered# the petition for review on certiorariis DENIED D:E CO:RSE.

SO ORDERED.
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G.R. No. 179;)3 u(y 31, 2009

UNI!ED MUS-IM AND HRIS!IAN URAN POOR ASSOIA!ION, IN. re*re%e$"e' by #"% Pre%#'e$", MANUE- 6.

UEN,Petitioner#vs.R>6 DE6E-OPMEN! ORPORA!ION re*re%e$"e' by #"% Pre%#'e$", ENAMIN :UIDI--AJ a$' SEA FOODS

ORPORA!ION, re*re%e$"e' by #"% E


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thereof. :1C:P&I eFpressed its intention to 2u( the su2Hect propert( usin% the proceeds of its pendin% loan applicationwith National o$e 1ort%a%e 7inance Corporation ;N17:ISI3ION of thea2ove*descri2ed propert( of LS7CM

=ERE&S# in pursuance to the ne%otiations 2etween LS7CM and :1C:P&I# the latter has taen steps with the proper%overn$ent authorities particularl( the 1a(or of a$2oan%a Cit( and its Cit( ousin% Board which will act as @Ori%inator@in the acAuisition of said propert( which will ena2le :1C:P&I to avail of its Co$$unit( 1ort%a%e Pro%ra$

=ERE&S# it appears that :1C:P&I will ulti$atel( appl( with the o$e 1ort%a%e and 7inance Corporation for a loan topa( the acAuisition price of said land

=ERE&S# as one of the steps reAuired 2( the %overn$ent authorities to initiate proceedin%s is to receive a for$al$anifestation of Intent to Sell fro$ LS7CM

NO=# 3ERE7ORE# for and in consideration of the fore%oin% pre$ises# the parties hereto a%ree as follows6

. LS7CM eFpressl( declares its intention to sell /ot No. with an area of #" sAuare $eters situated in/ower Calarian# a$2oan%a Cit( and covered 2( 3C3 No. 5" of the Re%istr( of Deeds of a$2oan%a Cit( to:1C:P&I at the price of P5. per sAuare $eter# free fro$ all liens# char%es and encu$2rances

). 3hat :1C:P&I here2( eFpressl( declares its intention to 2u( the aforesaid propert( and shall endeavor toraise the necessar( funds to acAuire sa$e at the a2ove$entioned price of P5. per sAuare $eter

. 3hat the &2solute Deed of Sale shall 2e eFecuted# si%ned and delivered to%ether with the title and all other

pertinent docu$ents upon full pa($ent of the purchase price

4. 3hat LS7CM shall pa( the capital %ains taF and docu$entar( sta$ps# Re%istration# transfer taF and othereFpenses shall 2e paid 2( the :1C:P&I.

owever# the intended sale was derailed due to :1C:P&Is ina2ilit( to secure the loan fro$ N17 as not all its $e$2ersoccup(in% /ot No. were willin% to Hoin the undertain%. Intent on 2u(in% the su2Hect propert(# :1C:P&I# in a series ofconferences with S7C# proposed the su2division of /ot No. to allow the sAuatter*occupants to purchase a s$allerportion thereof.
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ConseAuentl(# so$eti$e in Dece$2er !!4# /ot No. was su2divided into three ;< parts covered 2( separate titles6

. /ot No. *& with an area of 4#4 sAuare $eters under 3C3 No. 3*"#44-

). /ot No. *B with an area of #45 sAuare $eters under 3C3 No. 3*"#44! and

. /ot No. *C with an area of -#-") sAuare $eters under 3C3 No. 3*"#45.

On 'anuar( # !!5# :1C:P&I purchased /ot No. *& for P4#5#-.5-. In turn# /ot No. *B was constituted asroad ri%ht of wa( and donated 2( S7C to the local %overn$ent.

:1C:P&I failed to acAuire /ot No. *C for lac of funds. On 1arch 5# !!5# :1C:P&I ne%otiated anew with S7C andwas %iven 2( the latter another three $onths to purchase /ot No. *C. owever# despite the eFtension# the three*$onthperiod lapsed with the sale not consu$$ated 2ecause :1C:P&I still failed to o2tain a loan fro$ N17. 3hus# on 'ul( )#

!!5# S7C sold /ot No. *C for P)#54"#5-5. to respondent BR8C*, Develop$ent Corporation ;BR8C


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ence# this recourse 2( :1C:P&I positin% a sole issue for our resolution6

IS 3E /E33ER O7 IN3EN3 3O SE// &ND /E33ER O7 IN3EN3 3O B:8 & BI/&3ER&/ RECIPROC&/ CON3R&C3=I3IN 3E 1E&NIN+ OR CON3E1P/&3ION O7 &R3IC/E 4"!# 7IRS3 P&R&+R&P# CI,I/ CODE O7 3EPI/IPPINES4

3he petition deserves scant consideration. =e co$pletel( a%ree with the lower courts rulin%s.

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