THIRD DIVISION

[G.R. No. 119777. October 23, 1997]

THE HEIRS OF PEDRO ESCANLAR, FRANCISCO HOLGADO and the SPOUSES

DR. EDWIN A. JAYME and ELISA TAN-JAYME, petitioners, vs. THE HON.
COURT OF APPEALS, GENEROSA MARTINEZ, CARMEN CARI-AN,
RODOLFO CARI-AN, NELLY CHUA CARI-AN, for herself and as guardian ad
litem of her minor son, LEONELL C. CARI-AN, FREDISMINDA CARI-AN, the
SPOUSES PAQUITO CHUA and NEY SARROSA-CHUA and THE REGISTER
OF DEEDS OF NEGROS OCCIDENTAL, respondents.

[G.R. No. 120690. October 23, 1997]

FRANCISCO HOLGADO and HRS. OF PEDRO ESCANLAR, namely BERNARDO,

FELY,
SONIA,
LILY,
DYESEBEL
and
NOEMI
all
surnamed
ESCANLAR, petitioners, vs. HON. COURT OF APPEALS, GENEROSA
MARTINEZ, CARMEN CARI-AN, RODOLFO CARI-AN, NELLY CHUA CARIAN, for herself and as guardian ad litem of her minor son, LEONELL C.
CARI-AN and FREDISMINDA CARI-AN, and SP. PAQUITO CHUA and NEY
SARROSA CHUA and
REGISTER
OF
DEEDS
OF
NEGROS
OCCIDENTAL, respondents.
D E C I S I ON
ROMERO, J.:
Before us are consolidated petitions for review of the decision of the Court of
Appeals in CA-G.R. CV No. 39975 which affirmed the trial courts pronouncement that
the deed of sale of rights, interests and participation in favor of petitioners is null and
void.
The case arose from the following facts:
Spouses Guillermo Nombre and Victoriana Cari-an died without issue in 1924 and 1938,
respectively. Nombres heirs include his nephews and grandnephews. Victoriana Cari-an was
succeeded by her late brothers son, Gregorio Cari-an. The latter was declared as Victorianas
heir in the estate proceedings for Nombre and his wife (Special Proceeding No 7-7279).[1] After
Gregorio died in 1971, his wife, Generosa Martinez, and children, Rodolfo, Carmen, Leonardo
and Fredisminda, all surnamed Cari-an, were also adjudged as heirs by representation to

Victorianas estate.[2] Leonardo Cari-an passed away, leaving his widow, Nelly Chua vda. deCarian and minor son Leonell, as his heirs.
Two parcels of land, denominated as Lot No. 1616 and 1617 of the Kabankalan Cadastre with an
area of 29,350 square meters and 460,948 square meters, respectively, formed part of the estate
of Nombre and Cari-an.
On September 15, 1978, Gregorio Cari-ans heirs, herein collectively referred to as
private respondents Cari-an, executed the Deed of Sale of Rights, Interests and
Participation worded as follows:
NOW, THEREFORE, for and in consideration of the sum of TWO HUNDRED SEVENTYFIVE THOUSAND (P275,000.00) Pesos, Philippine Currency, to be paid by the VENDEES to
the VENDORS, except the share of the minor child of Leonardo Cari-an, which should be
deposited with the Municipal Treasurer of Himamaylan, Province of Negros Occidental, by the
order of the Court of First Instance of Negros Occidental, Branch VI, Himamaylan, by those
presents, do hereby SELL, CEDE, TRANSFER and CONVEY by way of ABSOLUTE SALE,
all the RIGHTS, INTERESTS and PARTICIPATION of the Vendors as to the one-half (1/2)
portion pro-indiviso of Lots Nos. 1616 and 1617 (Fishpond), of the Kabankalan Cadastre,
pertaining to the one-half (1/2) portion pro-indiviso of the late Victoriana Cari-an unto and in
favor of the Vendees, their heirs, successors and assigns;
xxx

xxx

xxx

That this 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. (Underscoring supplied.)
Pedro Escanlar and Francisco Holgado, the vendees, were concurrently the lessees
of the lots referred to above. [3] They stipulated that the balance of the purchase price
(P225,000.00) shall be paid on or before May 1979 in a Deed of Agreement executed
by the parties on the same day:
WHEREAS, at the time of the signing of the Contract, VENDEES has (sic) only FIFTY
THOUSAND (P50,000.00) Pesos available thereof, and was not able to secure the entire amount;
WHEREAS, the Vendors and one of the Vendees by the name of Pedro Escanlar are relatives,
and absolute faith and trust exist between them, wherein during economic crisis, has not failed to
give monetary succor to the Vendors;
WHEREAS, Vendors herein understood the present scarcity of securing available each (sic) in
the amount stated in the contract;
NOW THEREFORE, for and in consideration of the sum of FIFTY THOUSAND (P50,000.00)
Pesos, Philippine Currency, the balance of TWO HUNDRED TWENTY FIVE THOUSAND
(P225,000.00) Pesos to be paid by the Vendees on or before May, 1979, the Vendors herein, by

these Presents, do hereby CONFIRM and AFFIRM the Deed of Sale of the Rights, Interests and
Participation dated September 15, 1978, over Lots Nos. 1616 and 1617 (fishpond) of the
Kabankalan Cadastre in favor of the VENDEES, their heirs and assigns.
That pending the complete payment thereof, Vendees shall not assign, sell, lease, nor mortgage
the rights, interests and participation thereof;
That in the event the Vendees fail and/ or omit to pay the balance of said purchase price on May
31, 1979 and the cancellation of said Contract of Sale is made thereby, the sum of FIFTY
THOUSAND (P50,000.00) Pesos shall be deemed as damages thereof to Vendors.
(Underscoring supplied)[4]
Petitioners were unable to pay the Cari-an heirs individual shares, amounting
to P55,000.00 each, by the due date. However, said heirs received at least 12
installments from petitioners after May 1979. [5] Rodolfo Cari-an was fully paid by June
21, 1979. Generosa Martinez, Carmen Cari-an and Fredisminda Cari-an were likewise
fully compensated for their individual shares, per receipts given in evidence. [6] The minor
Leonells share was deposited with the Regional Trial Court on September 7, 1982. [7]
Being former lessees, petitioners continued in possession of Lot Nos. 1616 and
1617. Interestingly, they continued to pay rent based on their lease contract. On
September 10, 1981, petitioners moved to intervene in the probate proceedings of
Nombre and Cari-an as the buyers of private respondent Cari-ans share in Lot Nos.
1616 and 1617. Petitioners motion for approval of the September 15, 1978 sale before
the same court, filed on November 10, 1981, was opposed by private respondents Carian on January 5, 1982.[8]
On September 16, 1982, the probate court approved a motion filed by the heirs of
Cari-an and Nombre to sell their respective shares in the estate. On September 21,
1982, private respondents Cari-an, in addition to some heirs of Guillermo Nombre,
[9]
sold their shares in eight parcels of land including Lot Nos. 1616 and 1617 to the
spouses Ney Sarrosa Chua and Paquito Chua for P1,850,000.00. One week later, the
vendor-heirs, including private respondents Cari-an, filed a motion for approval of sale
of hereditary rights, i.e. the sale made on September 21, 1982 to the Chuas.
Private respondents Cari-an instituted this case for cancellation of sale against
petitioners (Escanlar and Holgado) on November 3, 1982. [10] They complained of
petitioners failure to pay the balance of the purchase price by May 31, 1979 and alleged
that they only received a total of P132,551.00 in cash and goods. Petitioners replied
that the Cari-ans, having been paid, had no right to resell the subject lots; that the
Chuas were purchasers in bad faith; and that the court approval of the sale to the
Chuas was subject to their existing claim over said properties.
On April 20, 1983, petitioners also sold their rights and interests in the subject
parcels of land (Lot Nos. 1616 and 1617) to Edwin Jayme for P735,000.00[11] and turned
over possession of both lots to the latter. The Jaymes in turn, were included in the civil
case as fourth-party defendants.

On December 3, 1984, the probate court approved the September 21, 1982 sale
without prejudice to whatever rights, claims and interests over any of those properties
of the estate which cannot be properly and legally ventilated and resolved by the court
in the same intestate proceedings. [12] The certificates of title over the eight lots sold by
the heirs of Nombre and Cari-an were later issued in the name of respondents Ney
Sarrosa Chua and Paquito Chua.
The trial court allowed a third-party complaint against the third-party defendants
Paquito and Ney Chua on January 7, 1986 where Escanlar and Holgado alleged that
the Cari-ans conspired with the Chuas when they executed the second sale on
September 21, 1982 and that the latter sale is illegal and of no effect. Respondents
Chua countered that they did not know of the earlier sale of one-half portion of the
subject lots to Escanlar and Holgado. Both parties claimed damages.[13]
On April 28, 1988, the trial court approved the Chuas motion to file a fourth-party
complaint against the spouses Jayme. Respondents Chua alleged that the Jaymes
refused to vacate said lots despite repeated demands; and that by reason of the illegal
occupation of Lot Nos. 1616 and 1617 by the Jaymes, they suffered materially from
uncollected rentals.
Meanwhile, the Regional Trial Court of Himamaylan which took cognizance of
Special Proceeding No. 7-7279 (Intestate Estate of Guillermo Nombre and Victoriana
Cari-an) had rendered its decision on October 30, 1987. [14] The probate court concluded
that since all the properties of the estate were disposed of or sold by the declared heirs
of both spouses, the case is considered terminated and the intestate estate of Guillermo
Nombre and Victoriana Cari-an is closed. The court held:
As regards the various incidents of this case, the Court finds no cogent reason to resolve them
since the very object of the various incidents in this case is no longer in existence, that is to say,
the properties of the estate of Guillermo Nombre and Victoriana Cari-an had long been disposed
of by the rightful heirs of Guillermo Nombre and Victoriana Cari-an. In this respect, there is no
need to resolve the Motion for Subrogation of Movants Pedro Escanlar and Francisco Holgado to
be subrogated to the rights of the heirs of Victoriana Cari-an since all the properties of the estate
had been transferred and titled to in the name of spouses Ney S. Chua and Dr. Paquito
Chua. Since the nature of the proceedings in this case is summary, this Court, being a Probate
Court, has no jurisdiction to pass upon the validity or invalidity of the sale of rights of the
declared heirs of Guillermo Nombre and Victoriana Cari-an to third parties. This issue must be
raised in another action where it can be properly ventilated and resolved. x x x Having
determined, after exhausted (sic) and lengthy hearings, the rightful heirs of Guillermo Nombre
and Victoriana Cari-an, the Court found out that the second issue has become moot and academic
considering that there are no more properties left to be partitioned among the declared heirs as
that had long ago been disposed of by the declared heirs x x x. (Underscoring supplied)
The seminal case at bar was resolved by the trial court on December 18, 1991 in
favor of cancellation of the September 15, 1978 sale. Said transaction was nullified
because it was not approved by the probate court as required by the contested deed of
sale of rights, interests and participation and because the Cari-ans were not fully
paid. Consequently, the Deed of Sale executed by the heirs of Nombre and Cari-an in

favor of Paquito and Ney Chua, which was approved by the probate court, was
upheld. The dispositive portion of the lower courts decision reads:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1)

Declaring the following contracts null and void and of no effect:

a)
The Deed of Sale, dated Sept. 15, 1978, executed by the plaintiffs in favor of the
defendants Pedro Escanlar and Francisco Holgado (Exh. A, Plaintiffs)
b)
The Deed of Agreement, dated Sept. 15, 1978, executed by the plaintiffs in favor
of the defendants, Pedro Escanlar and Francisco Holgado (Exh. B, Plaintiffs)
c)
The Deed of Sale, dated April 20, 1983, executed by the defendants in favor of
the fourth-party defendants, Dr. Edwin Jayme and Elisa Tan Jayme
d)
The sale of leasehold rights executed by the defendants in favor of the fourthparty defendants

2)
Declaring the amount of Fifty Thousand Pesos (P50,000.00) paid by the defendants to
the plaintiffs in connection with the Sept. 15, 1978 deed of sale, as forfeited in favor of the
plaintiffs, but ordering the plaintiffs to return to the defendants whatever amounts they have
received from the latter after May 31, 1979 and the amount of Thirty Five Thousand Two
Hundred Eighteen & 75/100 (P35,218.75)[15] deposited with the Treasurer of Himamaylan,
Negros Occidental, for the minor Leonell C. Cari-an 3)
Declaring the deed of sale, dated September 23, 1982, executed by Lasaro Nombre,
Victorio Madalag, Domingo Campillanos, Sofronio Campillanos, Generosa Vda. de Martinez,
Carmen Cari-an, Rodolfo Cari-an, Nelly Chua Vda. de Cari-an, for herself and as guardian ad
litem of the minor Leonell C. Cari-an, and Fredisminda Cari-an in favor of the third-party
defendants and fourth-party plaintiffs, spouses Dr. Paquito Chua and Ney Sarrosa Chua (Exh.
2-Chua) as legal, valid and enforceable provided that the properties covered by the said deed
of sale are subject of the burdens of the estate, if the same have not been paid yet.
4)
Ordering the defendants Francisco Holgado and Pedro Escanlar and the fourth-party
defendants, spouses Dr. Edwin Jayme and Elisa Tan Jayme, to pay jointly and severally the
amount of One Hundred Thousand Pesos (P100,000.00 as moral damages and the further sum of
Thirty Thousand Pesos (P30,000.00) as attorneys fees to the third-party defendant spouses, Dr.
Paquito Chua and Ney Sarrosa-Chua.
5)
Ordering the fourth-party defendant spouses, Dr. Edwin Jayme and Elisa Tan
Jayme, to pay to the third-party defendants and fourth-party plaintiffs, spouses Dr. Paquito Chua
and Ney Sarrosa-Chua, the sum of One Hundred Fifty Seven Thousand Pesos (P157,000.00) as
rentals for the riceland and Three Million Two Hundred Thousand Pesos (P3,200,000.00) as
rentals for the fishpond from October, 1985 to July 24, 1989 plus the rentals from the latter date

until the property shall have been delivered to the spouses Dr. Paquito Chua and Ney SarrosaChua;
6)
Ordering the defendants and the fourth-party defendants to immediately vacate Lots
Nos. 1616 and 1617, Kabankalan Cadastre;
7)

Ordering the defendants and the fourth-party defendants to pay costs.

SO ORDERED.[16]
Petitioners raised the case to the Court of Appeals. [17] Respondent court affirmed the
decision of the trial court on February 17, 1995 and held that the questioned deed of
sale of rights, interests and participation is a contract to sell because it shall become
effective only upon approval by the probate court and upon full payment of the purchase
price.[18]
Petitioners motion for reconsideration was denied by respondent court on April 3,
1995.[19] Hence, these petitions.[20]
1. 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., [21] 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. [22] 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. [23]
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. [24] 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 astraditio brevi manu.[25] Under Article 1477 of the Civil Code,
the ownership of the thing sold is acquired by the vendee upon actual or constructive
delivery thereof.[26]
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. [27]
2. 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 VIHimamaylan. 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 contracts 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.
In the case of Dillena v. Court of Appeals, [28] the Court declared that it is within the
jurisdiction of the probate court to approve the sale of properties of a deceased person
by his prospective heirs before final adjudication. [29] It is settled that court approval is
necessary for the validity of any disposition of the decedents estate. However,
reference to judicial approval cannot adversely affect the substantive rights of the heirs
to dispose of their ideal share in the co-heirship and/or co-ownership among the heirs.
[30]
It must be recalled that during the period of indivision of a decedents estate, each
heir, being a co-owner, has full ownership of his part and may therefore alienate it. [31] But
the effect of the alienation with respect to the co-owners shall be limited to the portion
which may be allotted to him in the division upon the termination of the co-ownership. [32]
From the foregoing, it is clear that hereditary rights in an estate can be validly sold
without need of court approval and that when private respondents Cari-an sold their
rights, interests and participation in Lot Nos. 1616 and 1617, they could legally sell the
same without the approval of the probate court.

As a general rule, the pertinent contractual stipulation (requiring court approval)

should be considered as the law between the parties. However, the presence of two
factors militate against this conclusion. First, the evident intention of the parties
appears to be contrary to the mandatory character of said stipulation. [33] Whoever
crafted the document of conveyance, must have been of the belief that the controversial
stipulation was a legal requirement for the validity of the sale. But the
contemporaneous and subsequent acts of the parties reveal that the original objective
of the parties was to give effect to the deed of sale even without court approval.
[34]
Receipt and acceptance of the numerous installments on the balance of the
purchase price by the Cari-ans and leaving petitioners in possession of Lot Nos. 1616
and 1617 reveal their intention to effect the mutual transmission of rights and
obligations. It was only after private respondents Cari-an sold their shares in the
subject lots again to the spouses Chua, in September 1982, that these same heirs filed
the case at bar for the cancellation of the September 1978 conveyance. Worth
considering too is the fact that although the period to pay the balance of the purchase
price expired in May 1979, the heirs continued to accept payments until late 1979 and
did not seek judicial relief until late 1982 or three years later.
Second, we hold that the requisite approval was virtually rendered impossible by the
Cari-ans because they opposed the motion for approval of the sale filed by
petitioners[35] and sued the latter for the cancellation of that sale. The probate court
explained:
(e) While it is true that Escanlar and Holgado filed a similar motion for the approval of Deed
of Sale executed by some of the heirs in their favor concerning the one-half (1/2) portions of
Lots 1616 and 1617 as early as November 10, 1981, yet the Court could not have favorably acted
upon it, because there exists a pending case for the rescission of that contract, instituted by the
vendors therein against Pedro Escanlar and Francisco Holgado and filed before another branch of
this Court. Until now, this case, which attacks the very source of whatever rights or interests
Holgado and Escanlar may have acquired over one-half (1/2) portions of Lots Nos. 1616 and
1617, is pending resolution by another court. Otherwise, if this Court meddles on these issues
raised in that ordinary civil action seeking for the rescission of an existing contract, then, the act
of this Court would be totally ineffective, as the same would be in excess of its jurisdiction.[36]
Having provided the obstacle and the justification for the stipulated approval not to
be granted, private respondents Cari-an should not be allowed to cancel their first
transaction with petitioners because of lack of approval by the probate court, which lack
is of their own making.
3. With respect to rescission of a sale of real property, Article 1592 of the Civil Code
governs:
In the sale of immovable property, even though it may have been stipulated that upon failure to
pay the price at the time agreed upon the rescission of the contract shall of right take place, the
vendee may 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 a notarial act. After the demand, the
court may not grant him a new term. (Underscoring added)

In the instant case, the sellers gave the buyers until May 1979 to pay the balance of
the purchase price. After the latter failed to pay installments due, the former made no
judicial demand for rescission of the contract nor did they execute any notarial act
demanding the same, as required under Article 1592. Consequently, the buyers could
lawfully make payments even after the May 1979 deadline, as in fact they paid several
installments to the sellers which the latter accepted. Thus, upon the expiration of the
period to pay, the sellers made no move to rescind but continued accepting late
payments, an act which cannot but be construed as a waiver of the right to
rescind. When the sellers, instead of availing of their right to rescind, accepted and
received delayed payments of installments beyond the period stipulated, and the buyers
were in arrears, the sellers in effect waived and are now estopped from exercising said
right to rescind.[37]
4. The matter of full payment is another issue taken up by petitioners. An
exhaustive review of the records of this case impels us to arrive at a conclusion at
variance with that of both the trial and the appellate courts.
The sole witness in the cancellation of sale case was private respondent herein
Fredisminda Cari-an Bustamante. She initially testified that after several installments,
she signed a receipt for the full payment of her share in December 1979 but denied
having actually received the P5,000.00 intended to complete her share. She claims that
Escanlar and Holgado made her sign the receipt late in the afternoon and promised to
give the money to her the following morning when the banks opened. She also claimed
that while her brother Rodolfo Cari-ans share had already been fully paid, her mother
Generosa Martinez only received P28,334.00 and her sister-in-law Nelly Chua vda. de
Cari-an received only P11,334.00. Fredisminda also summed up all the installments
and came up with the total of P132,551.00 from the long list on a sheet of a calendar
which was transferred from a small brown notebook. She later admitted that her list
may not have been complete for she gave the receipts for installments to petitioners
Escanlar and Holgado. She thus claimed that they were defrauded because petitioners
are wealthy and private respondents are poor.
However, despite all her claims, Fredismindas testimony fails to convince this Court
that they were not fully compensated by petitioners. Fredisminda admits that her
mother and her sister signed their individual receipts of full payment on their own and
not in her presence.[38] The receipts presented in evidence show that Generosa Martinez
was paid P45,625.00; Carmen Cari-an,P45,625.00; Rodolfo Cari-an, P47,500.00 on
June 21, 1979; Nelly Chua vda. de Cari-an, P11,334.00 and the sum of P34,218.00 was
consigned in court for the minor Leonell Cari-an. [39]Fredisminda insists that she signed a
receipt for full payment without receiving the money therefor and admits that she did not
object to the computation. We find it incredible that a mature woman like Fredisminda
Cari-an, would sign a receipt for money she did not receive. Furthermore, her claims
regarding the actual amount of the installments paid to her and her kin are quite vague
and unsupported by competent evidence. She even admits that all the receipts were
taken by petitioner Escanlar.[40] Worth noting too is the absence of supporting testimony
from her co-heirs and siblings Carmen Cari-an, Rodolfo Cari-an and Nelly Chua vda.
de Cari-an.

The trial court reasoned out that petitioners, in continuing to pay the rent for the
parcels of land they allegedly bought, admit not having fully paid the Carians. Petitioners response, that they paid rent until 1986 in compliance with their lease
contract, only proves that they respected this contract and did not take undue
advantage of the heirs of Nombre and Cari-an who benefited from the lease. Moreover,
it is to be stressed that petitioners purchased the hereditary shares solely of the Carians and not the entire lot.
The foregoing discussion ineluctably leads us to conclude that the Cari-ans were
indeed paid the balance of the purchase price, despite having accepted installments
therefor belatedly. There is thus no ground to rescind the contract of sale because of
non-payment.
5. Recapitulating, we have held that the September 15, 1978 deed of sale of rights,
interests and participations is valid and that the sellers-private respondents Cari-an
were fully paid the contract price. However, it must be emphasized that what was sold
was only the Cari-ans hereditary shares in Lot Nos. 1616 and 1617 being held pro
indiviso by them and is thus a valid conveyance only of said ideal shares. Specific or
designated portions of land were not involved.
Consequently, the subsequent sale of 8 parcels of land, including Lot Nos. 1616
and 1617, to the spouses Chua is valid except to the extent of what was sold to
petitioners in the September 15, 1978 conveyance. It must be noted however, that the
probate court in Special Proceeding No. 7-7279 desisted from awarding the individual
shares of each heir because all the properties belonging to the estate had already been
sold.[41] Thus it is not certain how much private respondents Cari-an were entitled to with
respect to the two lots, or if they were even going to be awarded shares in said lots.
The proceedings surrounding the estate of Nombre and Cari-an having attained
finality for nearly a decade now, the same cannot be re-opened. The protracted
proceedings which have undoubtedly left the property under a cloud and the parties
involved in a state of uncertainty compels us to resolve it definitively.
The decision of the probate court declares private respondents Cari-an as the sole
heirs by representation of Victoriana Cari-an who was indisputably entitled to half of the
estate.[42] There being no exact apportionment of the shares of each heir and no
competent proof that the heirs received unequal shares in the disposition of the estate,
it can be assumed that the heirs of Victoriana Cari-an collectively are entitled to half of
each property in the estate. More particularly, private respondents Cari-an are entitled
to half of Lot Nos. 1616 and 1617, i.e. 14,675 square meters of Lot No. 1616 and
230,474 square meters of Lot No. 1617. Consequently, petitioners, as their successorsin-interest, own said half of the subject lots and ought to deliver the possession of the
other half, as well as pay rents thereon, to the private respondents Ney Sarrosa Chua
and Paquito Chua but only if the former (petitioners) remained in possession thereof.
The rate of rental payments to be made were given in evidence by Ney Sarrosa
Chua in her unrebutted testimony on July 24, 1989: For the fishpond (Lot No. 1617) From 1982 up to 1986, rental payment of P3,000.00 per hectare; from 1986-1989 (and
succeeding years), rental payment of P10,000.00 per hectare. For the riceland (Lot No.

1616) - 15 cavans per hectare per year; from 1982 to 1986, P125.00 per cavan; 19871988, P175.00 per cavan; and 1989 and succeeding years, P200.00 per cavan.[43]
WHEREFORE, the petitions are hereby GRANTED. The decision of the Court of
Appeals under review is hereby REVERSED AND SET ASIDE. The case is
REMANDED to the Regional Trial Court of Negros Occidental, Branch 61 for petitioners
and private respondents Cari-an or their successors-in-interest to determine exactly
which 1/2 portion of Lot Nos. 1616 and 1617 will be owned by each party, at the option
of petitioners. The trial court is DIRECTED to order the issuance of the corresponding
certificates of title in the name of the respective parties and to resolve the matter of
rental payments of the land not delivered to the Chua spouses subject to the rates
specified above with legal interest from date of demand.
SO ORDERED.
DIGEST
THE HEIRS OF PEDRO ESCANLAR ET AL V. CA 281 SCRA 176 (1997)

FACTS: Spouses Guillermo Nombre and Victoriana Cari-an died without issue in 1924
and 1938, respectively. Nombres heirs include his nephews and grandnephews.
Victoriana was succeeded by her late brothers son, Gregorio Cari-an.
1. After Gregorios death in 1971, his wife, Generosa Martinez and children (Rodolfo,
Carmen, Leonardo and Fredisminda) were adjudged as heirs by representation to
Victorianas estate. Leonardo passed away, leaving his widow, Nelly Chua vda. de Carian and minor Leonell as his heirs
2. 2 parcels of land, denominated by Lot 1616 and 1617, formed part of the estate of
Guillermo Nombre and Victoriana Cari-an.
3. In 1978, Gregorios heirs executed a deed of sale of rights, interests and
participation in favor of Pedro Escanlar and Francisco Holgado over the undivided
share of Victoriana for P275,000 to be paid to the heirs, except the share of the minor
Leonell Cari-an which shall be deposited to the Municipal Treasurer. Said contract of
sale will be effective only upon approval of CFI
4. Escanlar and Holgado, the vendees, were concurrently the lessees of the subject
property. In a deed of agreement executed by both parties confirming and affirming the
contract of sale, they stipulated the following:
a. That the balance of the purchase price (P225,000) shall be paid on or before May
1979

b. Pending complete payment thereof, the vendees shall not assign, sell, lease or
mortgage the rights, interests and participation thereof
c. In the event of nonpayment of the balance of said purchase price, the sum of
P50,000 (down payment) shall be deemed as damages
5. Escanlar and Holgado were unable to pay the individual shares of the Cari-an heirs,
amounting to P55,000 each, on the due date. However, said heirs received at least 12
installment payments from Escanlar and Holgado after May 1979. Rodolfo was fully
paid by June 1979, Generosa Martinez, Carmen and Fredisminda were likewise fully
compensated for their individual shares. The minors share was deposited with the RTC
in September 1982.
6. Being former lessees, Escanlar and Holgado continued in possession of Lots 1616
and Lots 1617. Interestingly, they continued to pay rent based on their lease contract.
7. Subsequently, Escanlar and Holgado sought to intervene in the probate
proceedings of Guillermo and Victoriana as buyers of Victorianas share. In 1982, the
probate court approved the motion filed by the heirs of Guillermo and Victoriana to sell
their respective shares in the estate. Thereafter, the Cari-ans, sold their shares in 8
parcels of land including lots 1616 and 1617 to spouses Chua for P1.85 million.
8. The Cari-ans instituted a case for cancellation of sale against Escanlar and
Holgado alleging the latters failure to pay the balance of the purchase price on the
stipulated date and that they only received a total of P132,551 in cash and goods.
9. Escanlar and Holgado averred that the Cari-ans, having been paid, had no right to
resell the subject lots and that the spouses Chua were purchasers in bad faith.
10. The trial court held in favor of the heirs of Cari-an citing that the sale between the
Cari-ans and Escanlar is void as it was not approved by the probate court which was
required in the deed of sale.
11. CA affirmed the same and cited that the questioned deed of sale of rights is a
contract to sell because it shall become effective only upon approval by the probate
court and upon full payment of the purchase price.

ISSUE: WON the non-happening of a condition affects the validity of the contract itself

HELD: No, the non-happening of a condition only affects the effectivity and not the
validity of the contract.

Under Art 1318 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. The
contracts 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.

CONTRACT TO SELL VS. CONTRACT TO SALE

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.

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.

In the case at bar, the sale of rights, interests and participation as to portion pro
indiviso of the 2 subject lots is a contract of sale for the reasons that (1) the sellers did
not reserve unto themselves the ownership of the property until full payment of the
unpaid balance of P225,000.00; (2) 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.

NEED OF PROBATE COURTS APPROVAL EXISTS WHERE SPECIFIC

PROPERTIES OF THE ESTATE ARE SOLD AND NOT WHEN IDEAL AND
INDIVISIBLE SHARES OF AN HEIR ARE DISPOSED OF
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. In Dillena v. Court of Appeals, the Court declared that it is within the jurisdiction of
the probate court to approve the sale of properties of a deceased person by his
prospective heirs before final adjudication. The probate courts approval is necessary for
the validity of any disposition of the decedents estate. However, reference to judicial
approval cannot adversely affect the substantive rights of the heirs to dispose of their
ideal share in the co-heirship and/or co-ownership among the heirs. It must be recalled
that during the period of indivision of a decedents estate, each heir, being a co-owner,
has full ownership of his part and may therefore alienate it. But the effect of the
alienation with respect to the co-owners shall be limited to the portion which may be
allotted to him in the division upon the termination of the co-ownership.

CONTRACTUAL STIPULATIONS CONSIDERED LAW BETWEEN PARTIES;

EXCEPTION: CONTEMPORANEOUS ACTS OF PARTIES
As a general rule, the pertinent contractual stipulation (requiring court approval) should
be considered as the law between the parties. However, the presence of two factors
militates against this conclusion: (1) the evident intention of the parties appears to be
contrary to the mandatory character of said stipulation. Whoever crafted the document
of conveyance, must have been of the belief that the controversial stipulation was a
legal requirement for the validity of the sale. But the contemporaneous and subsequent
acts of the parties reveal that the original objective of the parties was to give effect to
the deed of sale even without court approval.

Receipt and acceptance of the numerous installments on the balance of the purchase
price by the Cari-ans, although the period to pay the balance of the purchase price
expired in May 1979, and leaving Escanlar and Holgado in possession of Lots 1616 and
1617 reveal their intention to effect the mutual transmission of rights and obligations.
The Cari-ans did not seek judicial relief until late 1982 or three years later; (2) the
requisite approval was virtually rendered impossible by the Cari-ans because they
opposed the motion for approval of the sale filed by Escanlar and Holgado, and sued
the latter for the cancellation of that sale. Having provided the obstacle and the

justification for the stipulated approval not to be granted, the Cari-ans should not be
allowed to cancel their first transaction with Escanlar and Holgado because of lack of
approval by the probate court, the lack of which is of their own making.