CRUZ vs. FERNANDOG.R. NO.

145470 December 9, 2005

FACTS:

 Petition for review on certiorari assailing CA’s Decision in dismissing

petitioner’sappeal 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 accionpubliciana 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.
 Petitioner’s Answer: Kasunduan is a perfected contract ofsale 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 ofaccionpubliciana. 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 didn’t
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
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 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.8 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 Kasunduan’s 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.13 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
"accionpubliciana"?)

HELD: No. The CA correctly ruled.

 Aside from the payment of the purchase price, there existed another
suspensivecondition,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 latter’s

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 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
priceThey argue that respondents should have filed an action for specific
performance or judicial rescission before they can avail of accionpubliciana. 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. 18
 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
ownersHipolito, who was their relativeand subsequently, TeresitaGlorioso, 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.20

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-seller’s 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.