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G.R. No. 156171: Spouses Ricardo and Ferma Portic vs. Anastacia Cristobal
456 scra 577 April 22, 2005
Contract to Sell vs Contract of Sale

In 1968, spouses Portic acquired a parcel of land with a 3 door apartment from Sps. Alcantara
even though they’re aware that the land was mortgaged to the SSS. Portic defaulted in paying
SSS. The Portics then executed a contract with Cristobal and the latter agreed to buy the said
property for P200k. Cristobal’s down payment was P45k and she also agreed to pay SSS. The
contract between them states:

That while the balance of P155,000.00 has not yet been fully paid the FIRST PARTY
OWNERS shall retain the ownership of the above described parcel of land together with
its improvements but the SECOND PARTY BUYER shall have the right to collect the
monthly rentals due on the first door (13-A) of the said apartment; (payment is due 22
May 1985, if Cristobal will not be able to pay Portic will reimburse)

A transfer certificate was executed in favor of Cristobal. Cristobal was not able to pay on the
due date. A suit ensued to lift the cloud on the title.

ISSUE: Who is the rightful owner of the parcel of land?

HELD: The Portics insofar as there was no contract of sale. What transpired between the
parties was a contract to sell. The provision of the contract characterizes the agreement
between the parties as a contract to sell, not a contract of sale. Ownership is retained by the
vendors, the Portics; it will not be passed to the vendee, the Cristobals, until the full payment of
the purchase price. Such payment is a positive suspensive condition, and failure to comply with
it is not a breach of obligation; it is merely an event that prevents the effectivity of the obligation
of the vendor to convey the title. In short, until the full price is paid, the vendor retains
ownership.

The mere issuance of the Certificate of Title in favor of Cristobal did not vest ownership in her.
Neither did it validate the alleged absolute purchase of the lot. Registration does not vest, but
merely serves as evidence of, title. Our land registration laws do not give the holders any better
title than that which they actually have prior to registration.

Under Article 1544 of the Civil Code, mere registration is not enough to acquire a new title.
Good faith must concur. Clearly, Cristobal has not yet fully paid the purchase price. Hence, as
long as it remains unpaid, she cannot feign good faith. She is also precluded from asserting
ownership against the Portics. The CA’s finding that she had a valid title to the property must
be set aside.