Reyes v. Salvador, G.R. No.

139047, 11 September 2008

Chico-Nazario, J.

Facts:

The subject property in this case is a parcel of unregistered land formerly owned by Domingo Lozada. Lozada’s
second marriage produced two children, namely Nicomedes and Pablo. After the death of Lozada, Nicomedes and
the heirs of Pablo entered into an Extrajudicial Settlement of the Estate, dividing the lot into two parts.

Nicomedes executed a Deed of Conditional Sale over the subject property in favor of Emma Ver Reyes. Under the
contract, Nicomedes was to execute a Deed of Absolue sale upon full payment. Reyes was only able to pay the first
installment of the total purchase price agreed upon by the parties. Within this period, Nicomedes filed an
application for registration, but his application was opposed by the grandchildren of Lozada by the latter’s first
marriage.

Nicomedes then entered into another contract with Rosario Bondoc which was titled “Agreement of Purchase and
Sale.” Under the second contract, it was stipulated that Nicomedes will execute a Deed of Absolute Sale upon full
payment. Just like the first agreement, Bondoc was only able to pay the first installment as no title to said property
was delivered to Nicomedes.

Lastly, Nicomedes entered into a third contract, a Deed of Absolute Sale of Unregistered Land, involving a portion
of the subject property in favor of Maria Q. Cristobal. Nicomedes passed away on 1972. Seven months later, the
Deed of Absolute Sale was registered. The heirs of Nicomedes ratified the Deed of Absolute Sale and split the
remaining properties amongst themselves and collectively sold their shares in favor of Dulos Realty and
Development Corporation, but it was unregistered. In 1980, Lozada’s grandchildren by former marriage filed their
own application for registration, which led to the conflict in this case.

Issue/s:

Whether or not the Court of Appeals erred in holding Rosario Bondoc to be the true owner of the subject property.

Held:

A contract to sell is defined as 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 purchase price. Even in the absence of express agreement, intent may be implied from the provision of the
contract. In the case at bar, the first deeds, namely the Deed of Contract of Sale and the Agreement of Purchase
and Sale were both merely contracts to sell. In the first contract, there was a stipulation for automatic cancellation
for failure to pay in full. In such an event, Nicomedes has the exclusive right to sell to second persons. As to the
contract with Bondoc, it was stipulated that Nicomedes would only sell upon payment of the stipulated purchase
price. Furthermore, it included a promise to execute a Deed of Absolute Sale provided that Nicomedes has a right
to automatically cancel. Another notable stipulation is that which mentions that only rights of possession and
construction of improvement were given to the buyer. Clearly, these contracts are contracts to sell. The only
conveyance made in this case is that towards Maria Cristobal and Dulos Realty, as the latter two acquired their
respective portions by a contract of absolute sale.