1. ALI AKANG vs.
MUNICIPALITY OF of the condition agreed upon, that is, full payment of
ISULAN, SULTAN KUDARAT PROVINCE
FACTS:
Ali Akang (petitioner) is a member of the
national and cultural community belonging to the
Maguindanaon tribe of Isulan, Province of Sultan
Kudarat and the registered owner of parcel of land
located at Isulan, Sultan Kudarat, with an area of
20,030 square meters.
Sometime in 1962, a two-hectare portion of the
property was sold by the petitioner to the
Municipality of Isulan, Province of Sultan Kudarat
(respondent) through then Isulan Mayor Datu
Ampatuan under a Deed of Sale executed on July
18, 1962 for P3,000 to be used purposely and
exclusively as a Government Center site. The
respondent immediately took possession of the
property and began construction of the municipal
building.
Thirty-nine (39) years later or on October 26, 2001,
the petitioner, together with his wife, Patao
Talipasan, filed a civil action for Recovery of
Possession of Subject Property and/or Quieting of
Title thereon and Damages against the respondent,
represented by its Municipal Mayor, et al.
In his complaint, the petitioner alleged, among
others, that the agreement was one to sell, which
was not consummated as the purchase price was
not paid.
In its answer, the respondent denied the petitioner’s
allegations, claiming, among others: that the
petitioner’s cause of action was already barred by
laches; that the Deed of Sale was valid; and that it
has been in open, continuous and exclusive
possession of the property for forty (40) years.
ISSUE:
1. Whether the Deed of Sale is a valid and
perfected contract of sale;
HELD:
Yes. The Deed of Sale is a Valid Contract of Sale.
By the contract of sale, one of the contracting
parties obligates himself to transfer the ownership of
and to deliver a determinate thing, and the other to
pay therefore a price certain in money or its
equivalent.The elements of a contract of sale are:
(a) consent or meeting of the minds, that is, consent
to transfer ownership in exchange for the price; (b)
determinate subject matter; and (c) price certain in
money or its equivalent.
A contract to sell, on the other hand, is a bilateral
contract whereby the prospective seller, while
expressly reserving the ownership of the subject
property despite delivery thereof to the prospective
buyer, binds himself to sell the said property
exclusively to the prospective buyer upon fulfillment
the purchase price.
In a contract of sale, the title to the property passes
to the buyer upon the delivery of the thing sold,
whereas in a contract to sell, the ownership is, by
agreement, retained by the seller and is not to pass
to the vendee until full payment of the purchase
price.
The Deed of Sale executed by the petitioner and the
respondent is a perfected contract of sale, all its
elements being present. There was mutual
agreement between them to enter into the sale, as
shown by their free and voluntary signing of the
contract. There was also an absolute transfer of
ownership of the property by the petitioner to the
respondent as shown in the stipulation: "x x x I
petitioner hereby sell, transfer, cede, convey and
assign as by these presents do have sold,
transferred, ceded, conveyed and assigned, x x x."
There was also a determine subject matter, that is,
the two-hectare parcel of land as described in the
Deed of Sale. Lastly, the price or consideration is at
Three Thousand Pesos (P3,000.00), which was to
be paid after the execution of the contract. The fact
that no express reservation of ownership or title to
the property can be found in the Deed of Sale
bolsters the absence of such intent, and the
contract, therefore, could not be one to sell. Had the
intention of the petitioner been otherwise, he could
have: (1) immediately sought judicial recourse to
prevent further construction of the municipal
building; or (2) taken legal action to contest the
agreement. The petitioner did not opt to undertake
any of such recourses.
The petitioner’s allegation of non-payment is of no
consequence taking into account the Municipal
Voucher presented before the RTC, which proves
payment by the respondent of Three Thousand
Pesos (P3,000.00). The petitioner, notwithstanding
the lack of the Municipal Treasurer’s approval,
admitted that the signature appearing on the
Municipal Voucher was his and he is now estopped
from disclaiming payment.
Even assuming, arguendo, that the petitioner was
not paid, such non payment is immaterial and has
no effect on the validity of the contract of sale. A
contract of sale is a consensual contract and what is
required is the meeting of the minds on the object
and the price for its perfection and validity. In this
case, the contract was perfected the moment the
petitioner and the respondent agreed on the object
of the sale – the two-hectare parcel of land, and the
price – Three Thousand Pesos (P3,000.00). Non-
payment of the purchase price merely gave rise to a
right in favor of the petitioner to either demand
specific performance or rescission of the contract of
sale.
The Petitioner’s Claim for Recovery of Possession
and Ownership is Barred by Laches. Laches has
been defined as the failure or neglect, for an
unreasonable and unexplained length of time, to do
that which, by exercising due diligence could or
should have been done earlier. It should be
stressed that laches is not concerned only with the
mere lapse of time.
As a general rule, an action to recover registered
land covered by the Torrens System may not be
barred by laches.Neither can laches be set up to
resist the enforcement of an imprescriptible legal
right. In exceptional cases, however, the Court
allowed laches as a bar to recover a titled property.
Thus, in Romero v. Natividad, the Court ruled that
laches will bar recovery of the property even if the
mode of transfer was invalid.
More particularly, laches will bar recovery of a
property, even if the mode of transfer used by an
alleged member of a cultural minority lacks
executive approval. Thus, in Heirs of Dicman v.
Cariño, the Court upheld the Deed of Conveyance
of Part Rights and Interests in Agricultural Land
executed by Ting-el Dicman in favor of Sioco Cariño
despite lack of executive approval. The Court stated
that "despite the judicial pronouncement that the
sale of real property by illiterate ethnic minorities is
null and void for lack of approval of competent
authorities, the right to recover possession has
nonetheless been barred through the operation of
the equitable doctrine of laches." Similarly in this
case, while the respondent may not be considered
as having acquired ownership by virtue of its long
and continued possession, nevertheless, the
petitioner’s right to recover has been converted into
a stale demand due to the respondent’s long period
of possession and by the petitioner’s own inaction
and neglect. The Court cannot accept the
petitioner’s explanation that his delayed filing and
assertion of rights was due to Martial Law and the
Cotabato Ilaga-Black Shirt Troubles. The Martial
Law regime was from 1972 to 1986, while the Ilaga-
Black Shirt Troubles were from the 1970s to the
1980s. The petitioner could have sought judicial
relief, or at the very least made his demands to the
respondent, as early as the third quarter of 1962
after the execution of the Deed of Sale and before
the advent of these events. Moreover, even if, as
the petitioner claims, access to courts were
restricted during these times, he could have
immediately filed his claim after Martial Law and
after the Cotabato conflict has ended. The
petitioner's reliance on the Court's treatment of
Martial Law as force majeure that suspended the
running of prescription in Development Bank of the
Philippines v. Pundogar is inapplicable because the
Court's ruling therein pertained to prescription and
not laches. Consequently, the petitioner's lengthy
inaction sufficiently warrants the conclusion that he
acquiesced or conformed to the sale.
1. ALMIRA V. COURT OF APPEALS
FACTS:
Petitioners are the wife and the children of
the late Julio Garcia who inherited from his mother,
Ma. Alibudbud, a portion of a 90,655 square meter
property denominated as lot 1642 of the Sta. Rosa
Estate in Brgy. Caingin Sta. Rosa Laguna. The lot
was co-owned and registered in the names of three
persons with the following shares: Vicente de
Guzman (1/2), Enrique Hemedes (1/4) and
Francisco Alibudbud, the father of Ma. Alibudbud
(1/4). Although there wad no separate title in the
name of Julio Garcia, there were tax declaration in
his name to the intent of his grandfather’s share
covering the area of 21460 square meter.
On July 5, 1984, petitioner as heirs of Julio
Garcia, and respondent Federico Brines entered a
Kasunduan ng Pagbibilihan (Kasunduan for Brevity)
over the 21460 square meter portion for the sum of
P150.000.00. Respondent paid P65, 000.00 upon
execution of the contract while the balance of P85,
000.00 was made payable within six (6) months
from the date of the execution of the instrument.
The time of the execution of the kasunduan,
petitioners allegedly informed respondent that TCT
No. RT-1076 was in the possession of their cousin,
Conchila Alibudbud, who having bought Vicente de
Guzman’s ½ shares, owned the bigger portion of lot
1642. This standing notwithstanding, respondent
willingly entered into the Kasunduan provided that
the full payment of the purchase price will be made
upon delivery to him of the title.
Respondent took possession of the property
subject of the Kasunduan and made various
payments to petitioners amounting to P58500.00.
However upon failure of petitionere to deliver to him
a separate title to the property in the name of Julio
Garcia he refused to make further payments,
prompting petitioner to file a civil action before the
RTC for a rescission of the Kasunduan, return by
respondent to petitioner of the possession of the
subject parcel of land, and payment by respondent
of damages in favour of petitioners.
ISSUE:
Whether or not the petitioner may rescind
the Kasunduan pursuant to Article 1191 of the Civil
Code for the failure of respondent to give full
payment of the balance of the purchase price.
Ruling:
NO, the right of the parties are governed by
the terms ands the nature of the contract they
entered. Hence, although the nature of the
Kasunduan was never places in dispute by both
parties, it is necessary to ascertain whether the
Kasunduan is a contract to sell or a contract of Sale.
Although both parties have consistency referred to
the Kasunduan as a contract to Sell, a careful
reading of the provision of the Kasunduan reveals
that it is a contract of Sale. A deed of sale is
absolute in nature in the absence of an any
stipulation reserving title to the vendor until full
payment of the purchase price. The delivery of a
separation title in the name of Julio Garcia was a
condition imposed on respondent’s obligation to pay
the balance of the purchase price. It was not a
condition imposed in the perfection of the contract
of Sale.
The rescission will not prosper since the
power to rescind is only given to the injured party.
The injured party is the party who has faithfully
fulfilled his obligation. In the case at bar, the
petitioners were not ready, willing and able to
comply with their obligation to deliver a separate
title in the name of Julio Garcia to respondent
therefore, thy are not in a position to ask for
rescission. Failure to comply with a condition
imposed on the performance of an obligation gives
the other party the option either to refuse to proceed
with the sale or to waive the condition under Art
1545 of the civil code. Hence it is the respondent
who has the option.
2. SPOUSES RICARDO AND FERMA
PORTIC VS ANASTACIA CRISTOBAL
In 1968, spouses Ricardo and Ferma Portic
acquired a parcel of land with a 3 door apartment
from spouses 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 Anastacia 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. 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:
Whether or not the transaction is one of
contract of sale.
Held:
No. 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.
3. UNIVERSAL ROBINA SUGAR MILLING
CORPORATION V. HEIRS OF ANGEL
TEVES
Facts:
Andres Abanto owned two parcels of land
situated in Campuyo, Manjuyod, Negros Oriental.
One lot is registered in his name and the other lot is
unregistered. When he died, his heirs executed an
"Extrajudicial Settlement of the Estate of the
Deceased and Simultaneous Sale." In this
document, Abanto's heirs adjudicated unto
themselves the two lots and sold the unregistered
lot to the United Planters Sugar Milling Company,
Inc. (UPSUMCO), and the registered lot to Angel M.
Teves, for a total sum of P115,000.00. The sale
was not registered.
Out of respect for his uncle Montenegro,
who was UPSUMCO's founder and president, Teves
verbally allowed UPSUMCO to use the registered
lot for pier and loading facilities, free of charge,
subject to the condition that UPSUMCO shall
shoulder the payment of real property taxes and
that its occupation shall be co-terminus with its
corporate existence. UPSUMCO then built a
guesthouse and pier facilities on the property. Years
later, UPSUMCO’s properties were acquired by the
Philippine National Bank (PNB). Later, PNB
transferred the same properties to the Asset
Privatization Trust (APT) which, in turn, sold the
same to the Universal Robina Sugar Milling
Corporation (URSUMCO). URSUMCO then took
possession of UPSUMCO’s properties, including
Teves' lot.
Upon learning of the acquisition of his lot,
Teves formally asked the corporation to turn over to
him possession thereof or the corresponding
rentals. He stated in his demand letters that he
merely allowed UPSUMCO to use his property until
its corporate dissolution; and that it was not
mortgaged by UPSUMCO with the PNB and,
therefore, not included among the foreclosed
properties acquired by URSUMCO.
URSUMCO refused to heed Teves'
demand, claiming that it acquired the right to occupy
the property from UPSUMCO which purchased it
from Andres Abanto; and that it was merely placed
in the name of Angel Teves, as shown by the "Deed
of Transfer and Waiver of Rights and Possession"
dated November 26, 1987. Under this document,
UPSUMCO transferred to URSUMCO its application
for agricultural and foreshore lease. The same
document partly states that the lands subject of the
foreshore and agricultural lease applications are
bounded on the north by the "titled property of
Andres Abanto bought by the transferor
(UPSUMCO) but placed in the name of Angel
Teves". URSUMCO further claimed that it was
UPSUMCO, not Teves, which has been paying the
corresponding realty taxes.
Consequently, Teves filed a complaint for
recovery of possession of real property with
damages against URSUMCO. However, on
September 4, 1992, Teves died and was substituted
by his heirs. On April 6, 1994, the RTC held that
URSUMCO has no personality to question the
validity of the sale of the property between the heirs
of Andres Abanto and Angel Teves since it is not a
party thereto; that Teves' failure to have the sale
registered with the Registry of Deeds would not
vitiate his right of ownership, unless a third party
has acquired the land in good faith and for value
and has registered the subsequent deed; that the
list of properties acquired by URSUMCO from the
PNB does not include the disputed lot and,
therefore, was not among those conveyed by
UPSUMCO to URSUMCO.
On appeal by URSUMCO, the Court of Appeals
affirmed the RTC decision, holding that the
transaction between Angel Teves and Andres
Abanto's heirs is a contract of sale, not one to sell,
because ownership was immediately conveyed to
the purchaser upon payment of P115,000.00. On
October 29, 1996, URSUMCO filed a motion for
reconsideration but was denied by the Appellate
Court. Hence, the instant petition for review on
certiorari.
Issue:
Whether or not there was a perfected
contract of sale.
Held:
Yes, the transaction is not merely a contract
to sell but a contract of sale. In a contract of sale,
title to the property passes to the vendee upon
delivery of the thing sold; while in a contract to sell,
ownership is, by agreement, reserved in the vendor
and is not to pass to the vendee until full payment of
the purchase price. In the case at bar, the subject
contract, duly notarized, provides that the Abanto
heirs sold to Teves the lot covered by TCT No. H-
37. There is no showing that the Abanto heirs
merely promised to sell the said lot to Teves.
The absolute ownership over the registered
land was indeed transferred to Teves is further
shown by his acts subsequent to the execution of
the contract. As found by the trial court, it was
Teves, not Andres Abanto's heirs, who allowed
UPSUMCO to construct pier facilities and
guesthouse on the land. When the property was
erroneously included among UPSUMCO's
properties that were transferred to petitioner
URSUMCO, it was Teves, not the heirs of Andres
Abanto, who informed petitioner that he owns the
same and negotiated for an arrangement regarding
its use. Teves even furnished petitioner documents
and letters showing his ownership of the lot, such as
a copy of the "Extrajudicial Settlement of the Estate
of the Deceased Andres Abanto and Simultaneous
Sale" and a certified true copy of TCT No. H-37
covering the disputed lot. Indeed, the trial court and
the Court of Appeals correctly ruled that Teves
purchased the lot from the Abanto heirs.
That the contract of sale was not registered
does not affect its validity. Being consensual in
nature, it is binding between the parties, the Abanto
heirs and Teves. Article 1358 of the New Civil
Code, which requires the embodiment of certain
contracts in a public instrument, is only for
convenience, and the registration of the instrument
would merely affect third persons. Formalities
intended for greater efficacy or convenience or to
bind third persons, if not done, would not adversely
affect the validity or enforceability of the contract
between the contracting parties themselves. Thus,
by virtue of the valid sale, Angel Teves stepped into
the shoes of the heirs of Andres Abanto and
acquired all their rights to the property.

4. MANUEL v. RODRIGUEZ
Facts:
Januara Rodriguez ceded and transferred
the land owned by her to the Payatas Subdivision
Inc., to be administered by said firm, subdivided,
sold, leased or otherwise disposed of. Defendant-
appellee Eulogio Rodriguez was then the Secretary-
Treasurer of said Payatas Subdivision Inc.
Plaintiff-appellant offered to buy the lot in
question. Plaintiff-appellant made a counter-offer for
P2,000. Plaintiff-appellant wanted to pay in
installments. Plaintiff-appellant then requested that
the down-payment be reduced to P1,300.
After making the initial payment of P1,300,
a provisional receipt was issued. Plaintiff-appellant
was placed in the possession of the lot. It appears
that plaintiff-appellant did not make any payments
within the 9 to 10-month period. Payatas
Subdivision Inc. sent him a letter urging immediate
payment of his unpaid account with the Company.
Defendants-appellees considered his contract
cancelled and extinguished, and the amounts
already paid (P1,600), forfeited to the Company, the
transaction being merely a contract to sell or
promise to sell.
Januaria Rodriguez, who was the aunt of
defendant-appellee Eulogio Rodriguez, sold several
properties to the latter, including Lot 51 in question,
in consideration of the monthly advances, support,
services, care, maintenance, medical expenses,
etc. which she received from the said Eulogio
Rodriguez. TCT was issued to Eulogio Rodriguez,
Sr.
Eulogio Rodriguez, Sr. then sold Lot 51to John
Landah. Plaintiff-appellant wanted compel the
execution of a formal deed of conveyance in his
favor covering the purported sale.
Issue:
Whether or not the transaction was contract
to sell.
Held:
Yes. One evidence of the true character of
the transaction is the statement contained in Exhibit
"J": "at ng kayo naman ay mabigyan na ng
katibayan, alinsunod sa pinagkayarian",
strengthening the conclusion that what transpired
was a mere contract to sell, transfer of title being
conditioned on full payment of the price.
Although this dissolution of Payatas
Subdivision Inc. cannot be determinative of the
character of the sale in 1926 (as to whether
conditional or absolute), it must really have been the
occasion which prompted the termination of the
contract, as the corporation had to wind up its
affairs and close all pending business. Plaintiff-
appellant, however, argues (Errors I-IV; VI; VIII) that
the Payatas Subdivision had no right to cancel the
contract, as there was no demand by suit or notarial
act, as provided by Article 1504 of the Old Code
(Art. 1592, N. C. C.). This is without merit, because
Article 1504 requiring demand by suit or notarial act
in case the vendor of realty wants to rescind, does
not apply to a contract to sell or promise to sell,
where title remains with the vendor until fulfillment
to a positive suspensive condition, such as full
payment of the price.
In contracts to sell, where ownership is
retained by the seller and is not to pass until the full
payment of the price, such payment, as we said, is
a positive suspensive condition, the failure of which
is not a breach, casual or serious, but simply an
event that prevented the obligation of the vendor to
convey title from acquiring binding force, in
accordance with Article 1117 of the Old Civil Code.
To argue that there was only a casual breach is to
proceed from the assumption that the contract is
one of absolute sale, where non-payment is a
resolutory condition, which is not the case.
5. ALBERT PADILLA v. SPOUSES
PAREDES and COURT OF APPEALS
Facts:
On October 20, 1988, petitioner Padilla and
private respondent entered into a contract to sell
involving a parcel of land. The was untitled but
private respondent was paying taxes thereon.
Under the contract, petitioner undertook to secure
title to the property in private respondent’s names of
the P312,840 purchase prize, petitioner was to pay
downpayment of P50,000 upon signing and the
balance was to be paid within 10 days from the
issuance of the court order directing issuance of the
decree of registration. For failure to pay some of the
amount, respondent offered to sell to petitioner one-
half of the property for all the payment, lest
respondent rescinds the contract. Petitioner refused
and instituted action for specific performance
alleging that they have substantially complied with
the obligation. RTC ruled for the petitioners stating a
casual or slight breach that did not warrant
rescission. CA reversed the decision and confirmed
the respondent’s rescission.
Issue:
Whether or not the private respondents are
entitled to rescind the contract to sell the land to
petitioner
Held:
The Supreme Court sustained the ruling of
CA that private respondent may validly rescind the
contract to sell, however, the reason for this is not
that respondents have the power to rescind but
because their obligation thereunder did not arise.
The CA is correct in ordering the return to petitioner
of the amounts received from him by private
respondents, on the precept that no one shall be
unjustly enriched himself at the expense of another.
6. ADELFA PROPERTIES INC. v. CA
Facts:
Herein private respondents and their
brothers, Jose and Dominador Jimenez, were the
registered co-owners of a parcel of land situated in
Barrio Culasi, Las Piñas, Metro Manila.
Jose and Dominador Jimenez sold their
share consisting of one-half of said parcel of land to
herein petitioner pursuant to a "Kasulatan sa Bilihan
ng Lupa”. Petitioner expressed interest in buying the
western portion of the property from private
respondents. Accordingly, on November 25, 1989,
an "Exclusive Option to Purchase" 5 was executed
between petitioner and private respondents. Before
petitioner could make payment, it received
summons. The nephews and nieces of private
respondents against the latter, Jose and Dominador
Jimenez, and herein petitioner filed for annulment of
the deed of sale in favor of Household Corporation
and recovery of ownership of the property.
As a consequence, petitioner informed
private respondents that it would hold payment of
the full purchase price and suggested that private
respondents settle the case with their nephews and
nieces. Respondent Salud Jimenez refused to heed
the suggestion of petitioner and attributed the
suspension of payment of the purchase price to
"lack of word of honor." Private-respondents
informed Atty. Bernardo, petitioner's counsel, that
they were cancelling the transaction. Despite Atty.
Bernardo's offers to pay the purchase price, private-
respondents rejected his offers. Private respondents
executed a Deed of Conditional Sale 10 in favor of
Emylene Chua over the same parcel of land. Private
respondents' counsel sent a letter to petitioner
enclosing therein a check for P25,000.00
representing the refund of fifty percent of the option
money paid under the exclusive option to purchase.
Private respondents then requested petitioner to
return the owner's duplicate copy of the certificate of
title of respondent Salud Jimenez. Petitioner failed
to surrender the certificate of title, hence private
respondents filed a case for annulment of contract
with damages, praying, among others, that the
exclusive option to purchase be declared null and
void; that defendant, herein petitioner, be ordered to
return the owner's duplicate certificate of title.
Issue:
Whether or not the "Exclusive Option to Purchase"
executed between petitioner Adelfa Properties, Inc.
and private respondents Rosario Jimenez-
Castañeda and Salud Jimenez is an option contract
which is contact to sell.
Held:
Yes. The alleged option contract as a contract to
sell, rather than a contract of sale. The distinction
between the two is important for in contract of sale,
the title passes to the vendee upon the delivery of
the thing sold; whereas in a contract to sell, by
agreement the ownership is reserved in the vendor
and is not to pass until the full payment of the price.
In a contract of sale, the vendor has lost and cannot
recover ownership until and unless the contract is
resolved or rescinded; whereas in a contract to sell,
title is retained by the vendor until the full payment
of the price, such payment being a positive
suspensive condition and failure of which is not a
breach but an event that prevents the obligation of
the vendor to convey title from becoming effective.
Thus, a deed of sale is considered absolute in
nature where there is neither a stipulation in the
deed that title to the property sold is reserved in the
seller until the full payment of the price, nor one
giving the vendor the right to unilaterally resolve the
contract the moment the buyer fails to pay within a
fixed period. The parties never intended to transfer
ownership to Adelfa Properties to completion of
payment of the purchase price, this is inferred by
the fact that the exclusive option to purchase,
although it provided for automatic rescission of the
contract and partial forfeiture of the amount already
paid in case of default, does not mention that Adelfa
Properties is obliged to return possession or
ownership of the property as a consequence of non-
payment. There is no stipulation anent reversion or
reconveyance of the property in the event that
petitioner does not comply with its obligation. With
the absence of such a stipulation, it may legally be
inferred that there was an implied agreement that
ownership shall not pass to the purchaser until he
had fully paid the price.
The validity of the suspension of payment
notwithstanding, we find and hold that private
respondents may no longer be compelled to sell
and deliver the subject property to petitioner for two
reasons, that is, petitioner's failure to duly effect the
consignation of the purchase price after the
disturbance had ceased; and, secondarily, the fact
that the contract to sell had been validly rescinded
by private respondents. The mere sending of a
letter by the vendee expressing the intention to pay,
without the accompanying payment, is not
considered a valid tender of payment. Besides, a
mere tender of payment is not sufficient to compel
private respondents to deliver the property and
execute the deed of absolute sale. It is consignation
which is essential in order to extinguish petitioner's
obligation to pay the balance of the purchase price.
In the case at bar, it has been shown that although
petitioner was duly furnished and did receive a
written notice of rescission which specified the
grounds therefore, it failed to reply thereto or protest
against it. Its silence thereon suggests an admission
of the veracity and validity of private respondents'
claim.
7. BABASA VS. CA
Facts:
Conditional Sale of Registered Lands was
executed between the parties over three (3) parcels
of land
Since the certificates of title over the lots were in the
name of third persons, it was agreed that the total
purchase price would be paid in the following
manner upon signing of the contract, and upon
presentation by the BABASAS of transfer
certificates of titles in their name within twenty (20)
months from the signing of the contract.
TABANGAO leased the lots to Shell Gas
Philippines, Inc. (SHELL. Two days prior to the
expiration of the 20-month period, the BABASAS
asked TABANGAO for an indefinite extension within
which to deliver clean titles over the lots. BABASAS
executed a notarized unilateral rescission to which
TABANGAO responded by reminding the BABASAS
that they were the ones who did not comply with
their contractual obligation to deliver clean titles
within the stipulated 20-month period, hence, had
no right to rescind their contract. The BABASAS
insisted on the unilateral rescission
Issue:
Whether or not the transaction is absolute contract
of sale.
Held:
Yes. Although denominated "Conditional Sale of
Registered Lands," the contract between petitioners
and respondent TABANGAO is one of absolute
sale. Aside from the terms and stipulations used
therein indicating such kind of sale, there is
absolutely no proviso reserving title in the
BABASAS until full payment of the purchase price,
nor any stipulation giving them the right to
unilaterally rescind the contract in case of non-
payment. A deed of sale is absolute in nature
although denominated a "conditional sale" absent
such stipulations.In such cases, ownership of the
thing sold passes to the vendee upon the
constructive or actual delivery thereof. In the instant
case, the subject properties passed to TABANGAO
both by constructive and actual delivery.
Constructive delivery was accomplished upon the
execution of the contract without any reservation of
title on the part of the BABASAS while actual
delivery was made when TABANGAO took
unconditional possession of the lots and leased
them to its associate company SHELL which
constructed its multi-million peso LPG Project
thereon.
8. TOMAS K. CHUA vs. COURT OF
APPEALS and ENCARNACION VALDES-
CHOY
Facts:
Encarnacion Valdes-Choy advertised for
sale her paraphernal house and lot in Makati. They
agreed on a purchase price of P10,800,000.00.
Chua gave P100,000 to Valdes-Choy as earnest
money They agreed that the balance is payable on
or before 15 July 1989. Failure to pay balance on or
before the said date forfeits the earnest money.
On July 13, 1989, Valdes-Choy as vendor and
Chua as vendee signed two Deeds of Absolute
Sale. The first Deed of Sale covered the house and
lot for the purchase price of P8,000,000.00. The
second Deed of Sale covered the furnishings,
fixtures and
movable properties contained in the house for the p
urchase price of P2,800,000.00. The parties also
computed the capital gains tax to amount to
P485,000.00.
The next day, Valdes-Choy deposited
the P485,000.00 manager's check to her
account and check to the counsel who undertook
to pay the capitalgains tax. Chua showed to Valdes-
Choy a PBCom manager's check for
P10,215,000.00 representing the balance of the
purchase price. Chua, however, did not give this
PBCom manager's check to Valdes-Choy because
the TCT was still registered in the name of Valdes-
Choy. Chua required that the Property be registered
first in his name before he would turn over the
check to Valdes-Choy. This angered Valdes-Choy
who tore up the Deeds of Sale, claiming that
what Chua required was not part of their agreement.
Valdes-Choy demanded the payment of the
remaining purchase balance be first deposited in
her account before she transfers the title of the
property to him.
Chua filed a complaint for specific
performance against Valdes-Choy.
Issue:
Whether or not the transaction is contract to sell.
Held:
Yes. It is contract to sell as evidenced by the
Receipt. The signed Deeds of Sale also stipulated
that the buyer shall pay the balance of the purchase
price upon signing of the deeds. However, on the
agreed date, Chua refused to pay the balance of the
purchase price as required by the contract to sell,
the signed Deeds of Sale, and Article 1582 of the
Civil Code. Chua was therefore in default and has
only himself to blame for the rescission by Valdes-
Choy of the contract to sell. Since the agreement
between Valdes-Choy and Chua is a mere contract
to sell, the full payment of the purchase price
partakes of a suspensive condition. The non-
fulfillment of the condition prevents the obligation to
sell from arising and ownership is retained by the
seller without further remedies by the buyer. Article
1592 of the Civil Code permits the buyer to pay,
even after the expiration of the period, as long as no
demand for rescission of the contract has been
made upon him either judicially or by notarial act.
However, Article 1592 does not apply to a contract
to sell where the seller reserves the ownership until
full payment of the price.
9. Dignos vs. Court of Appeals, and Jabil
Facts:
The Dignos spouses were owners of a parcel of
cadastral land known as Lot No. 3453. On June 7,
1965,they sold Lot No. 3453 to respondent Atilano
J. Jabil for P28,000 payable in two installments, with
an assumption of indebtedness with the First Insular
Bank of Cebu in the sum of P12,000.In November
25, 1965, the Dignos spouses sold the same land in
favor of the spouses Luciano and Jovita Cabigas,
who were then U.S. citizens, for the price of
P35,000. A deed of absolute sale was executed by
the Dignos spouses in favor of the Cabigas
spouses, and which was registered in the Office of
the Register of Deeds pursuant to the provisions of
Act No. 3344. As the Dignos spouses refused to
accept from Atilano J. Jabil the balance of the
purchase price of the land, and with the discovery
of the second sale to the Cabigas spouses, Atilano
J. Jabil brought suit against the Digos spouses. The
trial court declared the deed of sale executed
in favor of the Cabigas spouses null and void and
ordered Jabil to pay the remaining balance on
the purchase price. The Digos spouses were
ordered toreturn the sum of P 35,000 they received
from the Cabigas spouses. The Court of Appeals
affirmed the decision of the lower court except as to
the portion ordering Jabil to pay for the expenses
incurred by the Cabigas spouses for the building of
a fence upon the land. Hence, the present petition.
Petitioners (Spouses Dignos) contend that the Deed
of Sale with Atilano Jabil was a mere contract to sell
and not an absolute sale; that the same is subject to
two (2) positive suspensive conditions, namely: the
payment of the balance of P4,000 on or before
September 15, 1965 and the immediate assumption
of the mortgage of P12,000 with the First Insular
Bank of Cebu. It is further contended that in said
contract, title or ownership over the property was
expressly reserved in the vendor, the Dignos
spouses, until the suspensive condition of full and
punctual payment of the balance of the purchase
price shall have been met.The issues presented are
(1) whether or not the contract is a deed of absolute
sale or a contract to sell, and (2) whether or
not there was a valid rescission thereof
Issue:
Whether or not there is a perfected contract of sale.
Held:
Yes. A careful examination of the contract shows
that there is no such stipulation reserving the title of
the property on the vendors nor does it give them
the right to unilaterally rescind the contract upon
non-payment of the balance thereof within a fixed
period. The Supreme Court affirmed the Decision of
the Court of Appeals saying stated that all the
elements of a valid contract of sale are present in
the document and that the spouses Dignos had no
right to sell the land in question because an actual
delivery of its possession has already been made in
favor of Jabil as early as March 1965. It was also
found that the spouses Dignos never notified Jabil
by notarial act that they were rescinding the
contract, and neither did they file a suit in court to
rescind the sale. There is no showing that Jabil
properly authorized a certain Cipriano Amistad to
tell petitioners that he was already waiving his rights
to the land in question.
10. Topacio vs Court of Appeals
Facts:
The spouses De Villa (parents-in-law of
Topacio) were the former owners of a lot inQC. It
was previously mortgaged to Ayala Investment and
Development Corp to secure an obligation of
P500k. For failure to pay, the mortgage was
foreclosed and consequently, BPI acquired the
property as highest bidder. Topacio wanted to buy
the property. He made an offer for P900k, but was
asked toimprove it. Together, they arrived at P1.25M
as the purchase price, with 30%downpayment and
the balance payable in cash upon execution of the
Deed of Sale. Topacio paid the initial payment of
P375k. BPI wrote to Topacio and informed him that
he had until January 4, 1986 to pay thebalance of
P875k. P. asked for extensions. BPI agreed
to extend up to June 30. Topacio was unable to
meet the deadline, so BPI wrote a letter to Topacio,
where BPI declared himself free to sell the property
to other buyers and that Topacio could claim his
initial payment of P375k. Topacio merely asked for
more extensions. While BPI kepttelling Topacio that
he could claim the P375k back (in the form of a
cashier’s check), Topacio declined. But BPI
mailed the check to him. The check remained
with Topacio, uncashed. BPI then told Topaciothat
the property would be sold for P1.6M instead, so
Topacioreminded him of the original agreement
(P1.25M), but BPI refused.

Issue:
Whether or not the transaction was perfected
contract of sale.

Held:
Yes. Art. 1475. The contract of sale is perfected at
the moment there is a meeting of the minds upon
the thing which is the object of the contract and
upon the price. From the moment, the parties may
reciprocally demand performance, subject to the
provisions of the law governing the form of
contracts. Based on the aforecited article, the
parties have agreed on the object of the contract
which is the house and lot land even before
November 27, 1985, (the date petitioner sent his
letter together with the 30% downpayment), the
parties have agreed on the price which is
P1,250,000.00. Nowhere in the transaction
indicates that BPI reserved its title property nor did it
provide for any automatic rescission in case of
default. So when petitioner failed to pay the balance
of P875,000.00 despite several extensions given by
private respondent, the latter could not validly
rescind the contract without complying with the
provision of Article 1592 or Article 1191 on notarial
or judicial rescission respectively. The ruling
in Taguba v. Vda. de Leon, 132 SCRA 722 applies
in the case at bar, to wit