CRUZ vs. FERNANDO G.R. NO.

145470 December 9, 2005

FACTS:
Petition for review on certiorari assailing CAs Decision in dismissing petitioners appeal and affirming decision of the
RTC
Petitioners Luis V. Cruz and Aida Cruz (Cruz) are occupants of the front portion of a 710-square meter
Respondents spouses Alejandro Fernando, Sr. and Rita Fernando (Fernand) filed before the RTC a complaint
for accion publiciana against petitioners, demanding the latter to vacate the premises and to pay the amount
of P500.00 a month as reasonable rental for the use alleging they are the owners of the property having brought from
spouses Gloriosos evidenced by a Deed of Sale dated March 1987 and such offer to sell is embodied in
a Kasunduan dated August 6, 1983 executed before the Barangay Captain. But despite repeated demands, petitioners
refused to vacate the property
Petitioners filed a Motion to Dismiss but the RTC dismissed it for lack of merit.
Petitioners Answer: Kasunduan is a perfected contract of sale and that the agreement has already been "partially
consummated" as they already relocated their house from the rear portion of the lot to the front portion that was
sold to them, Mrs. Glorioso prevented the complete consummation of the sale when she refused to have the exact
boundaries of the lot. And that respondents are buyers in bad faith.
RTC rendered a Decision in favor of respondents as plaintiffs was able to prove by preponderance of evidence the
case of accion publiciana. Court ordered defendants and all persons claiming under them to vacate peacefully the
premises in question and to remove their house therefore and to pay plaintiff the sum of P500.00 as reasonable
rental per month beginning October 21, 1994, when the case was filed before this Court, and every month thereafter
until they vacate the subject premises and to pay the costs of suit. The counter claim is hereby DISMISSED for lack of
merit
Petitioner appealed to the CA but was dismissed, hence this petition.
ISSUES:
1. Whether the Honorable Court of Appeals committed an error of law in holding that the Agreement (Kasunduan)
between the parties was a "mere offer to sell," and not a perfected "Contract of Purchase and Sale"? (Whether or not
what transpired between the Cruzes and the Gloriosos was a contract of sale)
HELD: No. CA ruled correctly. The Kasunduan is only a contract to sell since it didnt have a specific manner of payment
RATIO:
Under Article 1458 of the Civil Code, a contract of sale is a contract by which one of the contracting parties obligates
himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in
money or its equivalent. Article 1475 of the Code further provides that the contract of sale is perfected at the
moment there is meeting of the minds upon the thing which is the object of the contract and upon the price. From
that moment the parties may reciprocally demand performance subject to the provisions of the law governing the
form of contracts.
In a contract of sale, the title to the property passes to the vendee upon the delivery of the thing sold, as
distinguished from a contract to sell where ownership is, by agreement, reserved in the vendor and is not to pass to
the vendee until full payment of the purchase price.
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Otherwise stated, in a contract of sale, the vendor loses
ownership over the property and cannot recover it until and unless the contract is resolved or rescinded; whereas, in
a contract to sell, title is retained by the vendor until full payment of the price. In the latter contract, payment of the
price is a positive suspensive condition, failure of which is not a breach but an event that prevents the obligation of
the vendor to convey title from becoming effective.
But the Kasunduans terms and conditions show that it is a contract to sell and not a contract of sale because there is
an absence of a definite manner of payment of the purchase price, such being an essential element to a contract of
sale, what it merely provides is the purchase price for the 213-square meter property at P40.00 per square meter
absent such, it is only a contract to sell or a mere offer. the Kasunduan merely provides that the expenses for the
survey will be divided between them and that each party should give an amount of no less than P400.00. Nowhere is
it stated that the survey is a condition precedent for the payment of the purchase price.
And Gloriosos only agreed to sell a portion of the property and that the portion to be sold measures 213 square
meters, absence of any formal deed of conveyance is a strong indication that the parties did not intend immediate
transfer of ownership
Normally, in a contract to sell, the payment of the purchase price is the positive suspensive condition upon which the
transfer of ownership depends.
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The parties, however, are not prohibited from stipulating other lawful conditions
that must be fulfilled in order for the contract to be converted from a contract to sell or at the most an executory sale
into an executed one
ISSUE 2: Whether the Honorable Court of Appeals committed an error of law in not holding that where the parties clearly gave
the petitioners a period of time within which to pay the price. (but did not fix said period, the remedy of the vendors is to ask
the Court to fix the period for the payment of the price, and not an "accion publiciana"?)
HELD: No. The CA correctly ruled.
Aside from the payment of the purchase price, there existed another suspensive condition,i.e.: that petitioners will
relocate their house to the portion they bought or will buy by January 31, 1984.
Petitioners failed to abide by the express condition that they should relocate to the rear portion of the property being
bought by January 31, 1984. Indeed, the Kasunduan discloses that it is the rear portion that was being sold by the
Gloriosos, and not the front portion as petitioners stubbornly claim
This condition is a suspensive condition noncompliance of which prevented the Gloriosos from proceeding with the
sale and ultimately transferring title to petitioners; and the Kasunduan from having obligatory force for petitioners
did not transfer their house in the front portion to the rear portion. Thus, Gloriosos has no obligation to consider
subject property as sold to petitioners because the latters non-fulfillment of the suspensive condition rendered the
contract to sell ineffective and unperfected.
Petitioners further claim that respondents have no cause of action against them because their obligation to pay the
purchase price did not yet arise, as the agreement did not provide for a period within which to pay the purchase price
They argue that respondents should have filed an action for specific performance or judicial rescission before they
can avail of accion publiciana. But petitioners never raised these arguments during the proceedings before the RTC.
Thus, issues raised for the first time on appeal and not raised timely in the proceedings in the lower court are barred
by estoppel
There is no need for a judicial rescission of the Kasunduan for the simple reason that the obligation of the Gloriosos to
transfer the property to petitioners has not yet arisen. There can be no rescission of an obligation that is nonexistent,
considering that the suspensive conditions therefor have not yet happened.
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Hence, petitioners have no superior right of ownership or possession to speak of. Their occupation of the property
was merely through the tolerance of the owners Hipolito, who was their relative and subsequently, Teresita Glorioso,
who is also their relative. They have no title or a contract of lease over the property. Based as it was on mere
tolerance, petitioners possession could neither ripen into ownership nor operate to bar any action by respondents to
recover absolute possession thereof.
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ISSUE 3: Whether or not respondents are buyers in bad faith:
HELD: No. They are buyers in good faith.
In a contract to sell, there being no previous sale of the property, a third person buying such property despite the
fulfillment of the suspensive condition such as the full payment of the purchase price, for instance, cannot be deemed
a buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance of the property. There is no
double sale in such case. Title to the property will transfer to the buyer after registration because there is no defect in
the owner-sellers title per se, but the latter, of course, may be sued for damages by the intending buyer.
A person who occupies the land of another at the latter's forbearance or permission without any contract between
them is necessarily bound by an implied promise that he will vacate upon demand.
Considering that petitioners continued possession of the property has already been rendered unlawful, they are
bound to pay reasonable rental for the use and occupation thereof, which in this case was appropriately by the RTC
at P500.00 per month beginning October 21, 1994 when respondents filed the case against them until they vacate the
premises.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is affirmed.
ALREDO vs. BORAS (G.R. No. 144225, June 17, 2003)
FACTS:
Petition for review for CAs Decision affirming the RTC
Subject land is 81, 524 square meters in Bataan
Registered owners of Subject Land (SL) are petitioner-spouses Godofredo and Carmen (GC)
Private respondents-spouses Armando and Adelia (AA) filed a complaint for specific performance against GC
before the RTC
AAs complaint: GC mortgage SL to AA for P15,000 and the buyer to pay DBP bank loan, its interest, and balance
in cash to seller
AA gave GC money to pay loan to DPB releasing mortgage and returning Original Certificate of Title to GC, AA
also paid the balance of the purchase price.
GC gave AA duplicate of Original Certificate of Title and other documents thus introducing AA as new owner
and possessor of the SL
In January 1994 AA learned that GC re-sold portions of land were being entered into and the trees cut without
their permission, the to several persons are Savellano, Matawaran, and spouses Espiritu who are now
Subsequent Buyers (SB)
On February 1994 AA filed adverse claim with Register of Deeds and discovered GC secured owners duplicate
of the copy of the Original Certificate of Title after filing petition in court for a issuance of a new copy. AA
amended their complaint to include the SD who purchased from GC subdivisions lots of the land thus also
becoming petitioners in this case
Register of Deeds issued to SB Transfer of Certificate of Title
GC and SBs (Petitioners) Answer: Petitioners argued that: a) action in unenforceable under Statues of Fraud, b)
No written instruments evidencing alleged contract of sale over the SL to AA, c) SB are buyers in good faith
The RTC rendered judgment in favor of plaintiffs-AA, stating that the Deed of Absolute Sale executed by GC to
SB is null and oid and their Transfer of Certificate of Title also null and void, and ordered GC to execute good
and valid Deed of Absolute sale stating it was a perfected sale and SB are not innocent purchasers
The CA affirmed RTCs Decision
ISSUE:
1. W/N alleged sale of SL to AA was valid and enforceable as it was entered orally and not it writing
Sub issues:
a) W/N petitioner-wife, Carmen, obtained the consent and authority of her husband, Godofredo, who is
the sole owner of the SL
b) W/N the sale was entered during the 25-year prohibitive period alienating SL without the approval of
the Secretary of Agriculture and Natural Resources
2. W/N action to enforce alleged oral contract of sale brought 24 years from its alleged perfection has been
barred by prescription and by laches.
3. W/N Deed of absolute sale and Transfer of Certificate to SB are valid.
HELD: Petition is without merit.
ISSUE 1: Validity and Enforceability of Sale: GC and AAs contract of sale was a perfected one. Perfection of a contract
happens when there is consent of both contracting parties on object certain and cause of the obligation. In this case the
object was the sale of the SL and the price certain was P15,000. The contract of sale was also consummated, as seller,
GC, delivered their obligation to the AA, placing latter in actual, physical possession and transferred ownership of the SL.
While obligation of buyer, AA, also succeeded in paying price certain to seller evidenced by receipt in March 1970 issued
by petitioner-wife
Statute of Frauds - RTC and CA correctly refused to apply the Statues of Frauds where contracts of sale of real property
be unenforceable unless contract, or some note, or memorandum of sale, is in writing and subscribed by party charged
or by agent. The receipt in March 1970 serves as a memorandum of sale which removes contract from Statue of Frauds,
such only applies to executory contracts and not to contracts either partially or totally performed. In this case, contract
was perfected and consummated and GC benefited from the contract because they paid the bank their loan and
accepted payment of balance of the price. Parties also agreed and performed their obligation through a verbal contract,
which is binding.
Sub-issues: Martial Consent - conjugal property without wifes consent merely makes the contract voidable thus valid
until ratified. In this case, G ratified sale when he introduced AA to his tenant as new owners and GG used most of the
sales proceeds to pay debt with the bank, thus said sale strengthened benefit to conjugal partnership. Article 161 of the
Civil Code states that conjugal partnership is liable for debts and obligations contracted by wife for benefit of conjugal
partnership. Even if Carmen sold land without consent of Godofredo, sale still binds conjugal partnership of spouses.
25-year prohibitive period sale of SL cannot be annulled on ground that Secretary did not approve sale which was made
25 years from issuance of homestead title. Failure to secure the approval of the Secretary does not ipso facto nullify a
sale made after the 5-year period expiration because requirement of Section 118 is merely directory or a formality.
Section 118 of the Public Land Act states that land acquired under free patent or homestead provisions shall not be
subject to encumbrances or alienation from date of approval of application and for a term of 5 years from and after date
of issuance of patent or grant. A grantee or homesteader is prohibited from alienating to private individual a land grant
within said 5 years from time patent or grant is issued. Violation of the prohibition renders sale void. But expires on fifth
year, from then on until next 20 years.
Prescription AA wrongfully filed complaint as one of specific performance. The correct relief should be reconveyance,
one that seeks to transfer property wrongfully registered by another to its rightful and legal owner. Article 1456 of the
Civil Code provides a person acquiring property through fraud becomes, by operation of law, a trustee of an implied
trust for benefit of real owner of property. In the case, the fraud creates an implied trust in favor of AA and gives right
to seek reconveyance of property from SB and such action prescribes in 10 years. The CA wrongfully ruled that issue of
prescription prescribed in 4 years from discovery of fraud, it should be that prescription period for reconveyance of
fraudulently registered real property is 10 years from date of issuance of Certificate of Title or registration of deed,
correlating Articles 1529 and 1456 of the Civil Code. In the case, SB brought lands on February 22, 1994, date of
execution of their deeds of sale, while Register of Deeds issued transfer to SB on February 24, 1994. Prescription could
not have set since case was filed before 10-year prescription. Either is action barred by laches for AA discovered the
subsequent sale on January 1994 and filed case on March 7, 1994, there was no neglect for an unreasonable time to
exercise their due diligence.
Validity of Deed of absolute sale and Transfer of Certificate SB were not buyers nor registrants in good faith. Because
under Article 1544 of the Civil Code wen ownership or title passes to buyer, the seller ceases to have any title to
transfer to any third person. If seller sells the same to another, the second buyer who has actual or constructive
knowledge of prior sale cannot be registrant in good faith. Second buyer cannot defeat first buyers title. In case a title is
issued to second buyer, first buyer may seek reconveyance of property subject to sale. Thus second buyer must act in
good faith in registering deed, which in this case, GC already sold land to AA and latter registered their adverse claim
with Register of Deeds on February 9, 1994 while GC and SB purchased their lots only on February 22, 1994 as showin in
the deeds of sale. Consequently, adverse claim registered prior to second sale charged AA with constructive notice of
defects in title of GC. Thus, AA were not buyers in good faith when they purchased lot of February 22, 1994 and were not
registrants in good faith wheN they registered their deed on February 24, 1994. Thus, SB individual titles to their
respective lands are not absolutely indefeasible. Defense of indefeasibility of Torrens Title does not extend to a
transferee who takes certificate of title with notice of flaw in his title, as in this case.
Wherefore, petition is denied and CAs decision if affirmed.