CASTILLO v.
REYES  Sps Reyes also filed a case for annulment of sale, specific performance and
Contract to Sell | November 28, 2007 | J. Nachura
Nature of Case: Petition for review on certiorari
Digest maker: Tam Natividad
SUMMARY: Bohler and Resp Sps Reyes entered into an agreement for the latter
to buy the former’s house. During the payment of the downpayment, Bohler
insisted on complete payment of the downpayment in cash, not check. Because the
Sps. Reyes were unable to comply, Bohler sold the house and lot to Pet Sps
Castillo. CA ruled the Agreement a contract of sale, not a contract to sell,
annulling the subsequent sale to Pet Sps Castillo. SC affirmed, saying al requisites
of a contract of sale were met.
DOCTRINE: Sale is a consensual contract and is perfected by mere consent,
manifested by a meeting of the minds as to the offer and acceptance thereof on the
subject matter, price and terms of payment
In a contract of sale, the title to the property passes to the vendee upon the
delivery of the thing sold; 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.
ISSUE/S & RATIO:
FACTS:
 Nov 7, 1997: Emmaliza Bohler and Sps Rudy and Consolacion Reyes
negotiated the sale of Bohler’s house in Aklan for Php 165,000
 Nov 8 (next day), they signed an Agreement, which reads:
o That the total amount to be paid shall be P165,000.00 to be paid in full
on or before the 15th of December 1997;
o That a partial payment of P130,000.00 shall be made today
o That the remaining balance (P35,000.00) shall be made as per #1 above
(Dec 15);
o That the buyers, represented by the Sps Reyes shall be responsible for
all the legal and other related documents and procedures regarding
this sale;
o That the seller, represented by Ms. Bohler, shall vacate the said house
and lot on or the 31st of January, 1998;
o That the tenants, represented by the Sps Romeo and Epifania Vicente,
shall vacate the same on or before the 30th of April, 1998;
 Upon signing, Sps Reyes handed to Bohler Php 20,000 cash and allegedly a
Php 110,000 check. Bohler insisted that the partial payment should all be paid
in cash so she can redeem the subject property from the bank on the following
Monday. Bohler demanded cash payment until midnight of the same day,
otherwise she would cancel the sale.
 Sps Reyes failed to meet Bohler’s deadline for the remaining Php 110,000 so
Bohler sold the property to Sps Nestor and Rosie Castillo.
 After finding out, Sps Reyes immediately tendered the check, asked the bank
for a certification that it was funded, and consulted their lawyer who sent a
notice of lis pendens to the Register of Deeds and the Provincial Assessor
damages in the RTC of Kalibo against Bohler and Sps Castillo
o Feb 21, 2003: RTC dismissed the complaint, declaring the Nov 8, 1997
Agreement a contract to sell – no actual sale happened between
Bohler and Sps Reyes and Bohler could validly sell the property to
Sps. Castillo
 Sps. Reyes appealed to the CA
o Dec 6, 2005: CA reversed the RTC ruling, declaring the Agreement as
a contract of sale and annulling the subsequent sale to Sps. Castillo.
 The wording of the agreement and the conduct of the parties
suggest they intended to enter into a contract of sale
 Ownership was not reserved by Bohler
 Non-payment of the purchase price was not made a
condition for the contract’s effectivity
 Sps. Castillo filed a petition for review on certiorari; saying the CA erred in
declaring the Agreement a contract of sale, and not a contract to sell; saying
the CA erred in declaring them in bad faith when they bought the house form
Bohler
1. W/N the transaction between Bohler and Sps Reyes is a perfected contract of
sale – YES, the Nov 8 Agreement clearly shows that they had a meeting of the
minds on the subject matter of the contract, the house and lot, the proce (Php
165,000), and on the terms of payment (initial Php 130,000 on the date of
execution and the remaining balance before Dec 15, 1997)
a. At the precise moment when the consent of both parties was given,
the contract of sale was perfected
b. Sale is a consensual contract and is perfected by mere consent,
manifested by a meeting of the minds as to the offer and acceptance
thereof on the subject matter, price and terms of payment
c. The said agreement cannot be considered a contract to sell. In a
contract of sale, the title to the property passes to the vendee upon the
delivery of the thing sold; 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.
d. 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.
e. The Agreement herein cannot be characterized as a contract to sell
because the Bohler made no express reservation of ownership or title
to the house and lot.
RULING: WHEREFORE, premises considered, the Petition for Review on Certiorari is
DENIED DUE COURSE