HEIRS OF PEDRO ESCANLAR VS CA

281 SCRA 176

PRINCIPLE:
In contracts to sell, ownership is retained by the seller and is not to pass until the full
payment of the price. Such payment is a positive suspensive condition, the failure of
which is not a breach of contract but simply an event that prevented the obligation of the
vendor to convey title from acquiring binding force.

In a contract of sale, the non-payment of the price is a resolutory condition which

extinguishes the transaction that, for a time, existed and discharges the obligations
created thereunder. The remedy of an unpaid seller in a contract of sale is to seek
either specific performance or rescission.

FACTS:
2 parcels of land in Negros Occidental was part of the estate of Sps. Guillermo and
Victoriana Cari-an. Gregorio Cari-an (Victoriana’s nephew) was declared as her heir. In
1971, Gregorio died. His wife and children (all Cari-an) were adjudged as heirs.

The Cari-an heirs executed a deed of sale of rights in favor of Pedro Escanlar and
Francisco Holgado:
 Consideration: P275,000
 They conveyed by absolute sale, all the rights, interests, and participation as to
½ of the 2 parcels of land
 Escanlar and Holgado were concurrently the lessees
 They paid P50,000 at the time of the signing
 P225,000 shall be paid on or before May 1979
 Pending the complete payment, vendors shall not assign, sell, lease, nor
mortgage the rights.

Escanlar and Holgado were unable to pay by the due date. However, the Cari-ans
received at least 12 installments from petitioners after May 1979. Being former lessees,
petitioners continued in possession of the lots. They continued to pay rent.

Petitioners invented in the proceedings of Nombre and Cari-an as buyers of respondent

Cari-an’s share in the lots. Respondent Cari-ans sold 8 lots (including the subject lots)
to Sps. Chua for P1,850. Respondents Cari-an filed a case to cancel the sale against
Escanlar and Holgado on their failure to pay. Petitioners also sold their rights in the lots
to Edwin Jayme for P735 and turned over possession.

The court approved the sale to the Chuas and titles were issued in their name. The sale
of the petitioners was declared null and void and so is the sale to Jayme. CA affirmed
the RTC—the Sept 15 deed of sale in favor of the petitioners is a contract to sell.
ISSUE: Whether or not the Sept. 15 sale is a contract to sell

RULING:
No. We disagree with the Court of Appeals' conclusion that the September 15,
1978 Deed of Sale of Rights, Interests and Participation is a contract to sell and
not one of sale.

The distinction between contracts of sale and contracts to sell with reserved title has
been recognized by this Court in repeated decisions, according to Justice J.B.L. Reyes
in Luzon Brokerage Co. Inc. v. Maritime Building Co., Inc., upholding the power of
promisors under contracts to sell in case of failure of the other party to complete
payment, to extrajudicially terminate the operation of the contract, refuse the
conveyance, and retain the sums of installments already received where such rights are
expressly provided for.

In contracts to sell, ownership is retained by the seller and is not to pass until the
full payment of the price. Such payment is a positive suspensive condition, the failure
of which is not a breach of contract but simply an event that prevented the obligation of
the vendor to convey title from acquiring binding force. To illustrate, although a deed of
conditional sale is denominated as such, absent a proviso that title to the property sold
is reserved in the vendor until full payment of the purchase price nor a stipulation giving
the vendor the right to unilaterally rescind the contract the moment the vendee fails to
pay within a fixed period, by its nature, it shall be declared a deed of absolute sale.

The September 15, 1978 sale of rights, interests and participation as to 1/2 portion
pro indiviso of the two subject lots is a contract of sale for the following reasons:
First, private respondents as sellers did not reserve unto themselves the
ownership of the property until full payment of the unpaid balance of P225,000.00.
Second, there is no stipulation giving the sellers the right to unilaterally rescind
the contract the moment the buyer fails to pay within the fixed period. Prior to the
sale, petitioners were in possession of the subject property as lessees. Upon sale to
them of the rights, interests and participation as to the 1/2 portion pro indiviso, they
remained in possession, not in concept of lessees anymore but as owners now through
symbolic delivery known as traditio brevi manu. Under Article 1477 of the Civil Code,
the ownership of the thing sold is acquired by the vendee upon actual or
constructive delivery thereof.

In a contract of sale, the non-payment of the price is a resolutory condition which

extinguishes the transaction that, for a time, existed and discharges the obligations
created thereunder. The remedy of an unpaid seller in a contract of sale is to seek
either specific performance or rescission.
--
Next to be discussed is the stipulation in the disputed September 15, 1978 Deed of Sale
of Rights, Interests and Participation which reads:" (t)his Contract of Sale of rights,
interests and participations shall become effective only upon the approval by the
Honorable Court of First Instance of Negros Occidental, Branch VI-Himamaylan."
Notably, the trial court and the Court of Appeals both held that the deed of sale is null
and void for not having been approved by the probate court.

There has arisen here a confusion in the concepts of validity and the efficacy of a
contract. Under Art. 1318 of the Civil Code, the essential requisites of a contract are:
consent of the contracting parties; object certain which is the subject matter of the
contract and cause of the obligation which is established. Absent one of the above, no
contract can arise. Conversely, where all are present, the result is a valid contract.
However, some parties introduce various kinds of restrictions or modalities, the lack of
which will not, however, affect the validity of the contract.

In the instant case, the Deed of Sale, complying as it does with the essential requisites,
is a valid one. However, it did not bear the stamp of approval of the court. This
notwithstanding, the contract’s validity was not affected for in the words of the
stipulation,." . . this Contract of Sale of rights, interests and participations shall become
effective only upon the approval by the Honorable Court . . ." In other words, only the
effectivity and not the validity of the contract is affected.

Then, too, petitioners are correct in saying that the need for approval by the probate
court exists only where specific properties of the estate are sold and not when only ideal
and indivisible shares of an heir are disposed of.

AKANG VS MUNICIPALITY OF ISULAN, SULTAN KUDARAT

699 SCRA 745

PRINCIPLE:
By contract of sale, one 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: consent or
meeting of the minds, determinate subject, and 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 of the condition agreed upon, that is, full
payment of the purchase price

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

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:
Whether or not the Deed of Sale dated July 18, 1962 is a valid and perfected
contract of sale; payment

RULING:
The Deed of Sale is a valid contract of sale.

By contract of sale, one 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: consent or
meeting of the minds, determinate subject, and 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 of the condition agreed upon, that is, full
payment of 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 Vo ucher 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 P3,000.
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.

ALMIRA VS CA
399 SCRA 577

PRINCIPLE:
In a contract to sell, ownership is, by agreement, reserved to the vendor and is not to
pass until full payment of the purchase price; whereas, in contract of sale, title to the
property passes to the vendee upon delivery of the thing sold. Non-payment by the
vendee in a contract of sale entitles the vendor to demand specific performance or
rescission of the contract, with damages, under Article 1191 of the Civil Code

TICKER: kasunduan

FACTS:
Almira Et al are the wife and children of the late Julio Garcia who inherited from his
mother, Maria Alibudbud, a portion of a Lot 1642 in Sta. Rosa, Laguna. Lot 1642 was
co-owned and registered in the names of Vicente de Guzman, Enrique Hemedes and
Francsisco Alibudbud. On July 5, 1984, the heirs of Julio Garcia and Federico Briones
entered into a Kasunduan ng Pagbibilhan over the 21,460 sq. m portion for the sum of
P150,000--- P65,000 was paid at the execution of the contract and the P85,000 was
made payable within 6 months from the date of the execution of the instrument.

At the time of the execution of the document, Briones was informed that the title over
the property is with their cousin Conchalina who owns the bigger portion of the land.
This 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. Briones
took possession of the subject property and made various payments amounting to
P58,500.00 but because of the failure of the heirs of Garcia to deliver to him a separate
title to the property, he refused to make further payments.

This prompted the heirs to file a case for rescission of the Kasunduan and the return of
the possession of the subject land. The heirs alleged that they approached Briones
several times to deliver the required title but the latter refused saying that he did not
have the money to pay the balance of the purchase price. The RTC decreed the
rescission prayed for and the return of the possession of the subject property. The CA
however reversed the lower court’s decision.

ISSUES:
1. Whether or not the payment of the balance of the purchase price is conditioned
upon delivery of a separate title in the name of Julio Garcia;
2. Whether or not the heirs are entitled to rescind the Kasunduan for failure of
Briones to complete payment

RULING:
1. Yes. The tenor of the correspondence between the heirs and Briones
shows that the parties intended that a separate title to the property in the
name of Julio Garcia shall be delivered to Briones as a condition for the
latter’s payment of the balance of the purchase price. As such, Briones
signified his willingness to pay but reminded the heirs of their obligation to deliver
title to the property.
 If the parties intended that the heirs deliver TCT No. RT-1076 instead of a
separate title in the name of Julio Garcia to Briones, then there would have been
no need for the heirs to ask for partial sums on the ground that this would be
used to pay for the processing fee of the title to the property. The heirs only had
to present the existing title to Briones and demand the balance of the purchase
price, but this they did not do. There is likewise no basis to conclude that
insufficiency of funds rather than failure of the heirs to deliver a separate title in
the name of Julio Garcia prevented Briones from completing payment of the
purchase price.

That the parties agreed on delivery of a separate title in the name of Julio Garcia
as a condition for respondent’s payment of the balance of the purchase price is
bolstered by the fact that there was already an approved subdivision plan of the
21,460 square-meter lot years before petitioners filed an action in court for
rescission. Unfortunately, the heirs were not able to secure a separate title in the
name of Julio Garcia.

2. No. In order to determine if rescission is proper, the Court needed to

ascertain whether the Kasunduan was a Contract to Sell or a Contract of
Sale. In a contract to sell, ownership is, by agreement, reserved to the vendor
and is not to pass until full payment of the purchase price; whereas, in contract of
sale, title to the property passes to the vendee upon delivery of the thing sold.
Non-payment by the vendee in a contract of sale entitles the vendor to demand
specific performance or rescission of the contract, with damages, under Article
1191 of the Civil Code.

A careful reading of the Kasunduan reveals that it is a contract of sale.

There was a perfected contract of sale in this case. The parties agreed on
the sale of a determinate object which is the subject property in this case in
the name of Julio Garcia, and also the price certain therefor, without any
reservation of title on the part of the heirs. Ownership was effectively
conveyed by petitioners to respondent, who was given possession of the
property. The delivery of a separate 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 on the perfection of the
contract of sale.

As to the rescission prayed for, the Court rules in the negative. The power to
rescind is only given to the injured party. The injured party is the party who has
faithfully fulfilled his obligation or is ready and willing to perform with his
obligation. In the case at bar, 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, they are not in a position to ask for rescission of the
 Kasunduan. Moreover, respondent’s obligation to pay the balance of the
purchase price was made subject to delivery by petitioners of a separate title in
the name of Julio Garcia within six (6) months from the time of the execution of
the Kasunduan, a condition with which petitioners failed to comply. 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 that
condition under Article 1545 of the Civil Code. Hence, it is the respondent who
has the option either to refuse to proceed with the sale or to waive the
performance of the condition imposed on his obligation to pay the balance of the
purchase price.

DAVID VS TIONGSON
313 SCRA 63

PRINCIPLE:
In view of the stipulation of the parties that the deed of sale and corresponding
certificate of title would be issued after full payment, then, they had entered into a
contract to sell and not a contract of sale.

As to the case of Basco, the lots purchased here was determinate since it was
adequately described in the receipts or at least easily determinable. Regarding this lot,
we find that there was also a perfected contract of sale. In fact, in the last receipt the
parties agreed on the specific lot area. This suffices to identify the specific lot involved.
It was unnecessary for the parties to enter into another agreement to determine the
exact property bought.

FACTS:
Certain lots located in Cabalantian, Bacolor, Pampanga were sold to three sets of
plaintiffs, namely, spouses Feliciano and Macaria Ventura, spouses Venancio and
Patricia David and Florencia Ventura Vda. De Basco by respondents spouses Alejandro
and Guadalupe Tiongson. A parcel of residential land with more or less an area of
300square meters for a total purchase price of P16,500.00 was sold to spouses
Feliciano and Macaria Ventura. Spouses Venancio and Patricia David bought a parcel
of land consisting of 308 square meters, more or less, for a total consideration of
P15,000.00.Lastly, two parcels of land with a total area of 169 square meters were sold
to Florencia Ventura Vda. De Basco for a total consideration of P10,400.00. The parties
agreed that as soon as the plaintiffs fully paid the purchase price, the respondents will
execute an individual deed of absolute sale and issue a certificate of title in favor of
them.
The Venturas immediately took possession of the lot, built a house and fenced the
perimeters. They were able to fully pay the price as of October 28, 1985 as evidenced
by a certification issued by Alejandro Tiongson. Sometime in November1985, the
Venturas demanded the issuance certificate of title but the Tiongsons refused to do so.

Spouses David claimed that, as agreed by the parties, the P15,000.00 purchase price
would be paid as follows: 3800 as downpayment and a monthly amortization of365
starting on March 8, 1983, until fully paid. By October 31, 1985, as evidenced by the
receipts issued by Alejandro Tiongson, the Davids paid a total of P15,050.00. The
Davids demanded the execution of a deed of sale and the issuance of a certificate of
title on the first week of November 1985 but the Tiongsons also refused. Unlike the
Venturas, they were not able to take possession of the land.

Florencia Ventura Vda. De Basco bought two parcels of land and had paid P12,945.00
as of February 6, 1984 for the two lots, evidenced by the receipts issued by Alejandro
Tiongson. She demanded the execution of the deeds of sale and issuance of the
corresponding certificate of title over the lots but the respondents were not able to
comply with the said obligation. The plaintiffs filed a complaint in the Regional Trial
Court of San Fernando, Pampanga for specific performance with damages. The
Tiongsons were declared at default for failure to file their answer, despite the fifteen
days extension given by the trial court. The Trial court made the decision that the
respondents should execute the deeds of sale and issue the certificate of title to the
plaintiffs and pay P15,000.00 as moral damages to the plaintiffs. The Tiongsons then
appealed the decision to the Court of Appeals alleging that the plaintiffs are not yet fully
paid. For this reason, they did not issue the deeds of sale and the certificates of title.
The Court of Appeals modified the decision of the Trial Court. It held that there were no
perfected contracts of sale entered into by the Davids and Florencia Vda. de Basco with
respondents. There was no agreement in the price as well as the manner and time of
payment thus there was no meeting in the minds regarding the price. David and Basco
filed a motion for reconsideration but it was denied.

ISSUES:
Whether or not there was a purchase price agreed by the Davids and the Tiongsons;
Whether or not the lots purchased by Basco was determinate.

RULING:
1. In the issue regarding that of the Davids, there was indeed an agreed purchase
price but it was unknown if it was a total of P15,000.00 alleged by the Davids or
120 per square meter as claimed by the respondents. Nevertheless, the sellers
could not render invalid a perfected contract of sale by merely
contradicting the buyer’s allegation regarding the price, and subsequently
raising the lack of agreement as to the price.
At any rate, we rule that there was a perfected contract. However, the statute of frauds
is inapplicable. The rule is settled that the statute of frauds applies only to executory
and not to completed, executed, or partially executed contracts.18 In the case of
spouses David, the payments made rendered the sales contract beyond the ambit of
the statute of frauds.
The Court of Appeals erred in concluding that there was no perfected contract of
sale. However, in view of the stipulation of the parties that the deed of sale and
corresponding certificate of title would be issued after full payment, then, they
had entered into a contract to sell and not a contract of sale.
2. As to the case of Basco, we find that the 109 sq. m. lot was adequately described
in the receipt, or at least, can be easily determinable. The receipt issued on June
4, 1983 stated that the lot being purchased by Florencia was the one earlier
earmarked for her sister, Rosita Muslan. Thus, the subject lot is determinable.
Any mistake in the designation of the lot does not vitiate the consent of the
parties or affect the validity and binding effect of the contract of sale.22 The
receipt issued on September 1, 1983 clearly described the lot area as 109 sq. m.
It also showed that Florencia had fully paid the purchase price.
a. With respect to the sixty (60) sq. m. lot, Florencia presented the receipts to
prove full payment. Regarding this lot, we find that there was also a
perfected contract of sale. In fact, in the last receipt the parties agreed on
the specific lot area. This suffices to identify the specific lot involved. It
was unnecessary for the parties to enter into another agreement to
determine the exact property bought. What remained to be done was the
actual segregation of the 60 square meters.
b. Furthermore, the parties agreed on the price. The receipts clearly indicate
the price as P70.00 per sq. m., hence the total price should be P4,200.00.
However, Florencia paid P6,500.00 for the lot. Hence, there was even an
overpayment of P2,300.00.

The Supreme Court reversed and set aside the decision of the Court of Appeals.
They rendered judgment ordering the Tiongsons to execute the deeds of sale to the
300 square meter lot sold to the Davids, as well as the 109 square meters lot sold to
Basco. With respect to the 60square meters lot purchased by Basco, Tiongson is
ordered to segregate the lot and execute a deed of sale thereafter and the issuance
of the certificate of title. The court also deleted the award for moral damages for lack
of basis.