ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL, ANNABELLE C.

GONZALES (for herself

and on behalf of Florida C. Tupper, as attorney-in-fact), CIELITO A. CORONEL, FLORAIDA A. ALMONTE, and
CATALINA BALAIS MABANAG v. CA, CONCEPCION D. ALCARAZ, and RAMONA PATRICIA ALCARAZ, assisted
by GLORIA F. NOEL
G.R. No. 103577 October 7, 1996 MELO, J.
On January 19, 1985, defendants-appellants Romulo Coronel, et al. (hereinafter referred to as Coronels) executed a
document entitled "Receipt of Down Payment" (Exh. "A") in favor of plaintiff Ramona Patricia Alcaraz (hereinafter
referred to as Ramona) which is reproduced hereunder:
RECEIPT OF DOWN PAYMENT
P1,240,000.00 Total amount
50,000

P1,190,000.00 Balance

Down

payment

Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty Thousand Pesos purchase
price of our inherited house and lot, covered by TCT No. 119627 of the Registry of Deeds of Quezon City, in the total
amount of P1,240,000.00.
We bind ourselves to effect the transfer in our names from our deceased father, Constancio P. Coronel, the transfer
certificate of title immediately upon receipt of the down payment above-stated.
On our presentation of the TCT already in or name, We will immediately execute the deed of absolute sale of said
property and Miss Ramona Patricia Alcaraz shall immediately pay the balance of the P1,190,000.00.
Clearly, the conditions appurtenant to the sale are the following:
1. Ramona will make a down payment of Fifty Thousand (P50,000.00) Pesos upon execution of the document
aforestated;
2. The Coronels will cause the transfer in their names of the title of the property registered in the name of their
deceased father upon receipt of the Fifty Thousand (P50,000.00) Pesos down payment;
3. Upon the transfer in their names of the subject property, the Coronels will execute the deed of absolute sale in favor
of Ramona and the latter will pay the former the whole balance of One Million One Hundred Ninety Thousand
(P1,190,000.00) Pesos.
On the same date (January 15, 1985), plaintiff-appellee Concepcion D. Alcaraz (hereinafter referred to as Concepcion),
mother of Ramona, paid the down payment of Fifty Thousand (P50,000.00) Pesos (Exh. "B", Exh. "2").
On February 6, 1985, the property originally registered in the name of the Coronels' father was transferred in their
names
under
TCT
No. 327043 (Exh. "D"; Exh. "4")
On February 18, 1985, the Coronels sold the property covered by TCT No. 327043 to intervenor-appellant Catalina B.
Mabanag (hereinafter referred to as Catalina) for One Million Five Hundred Eighty Thousand (P1,580,000.00) Pesos after
the latter has paid Three Hundred Thousand (P300,000.00) Pesos (Exhs. "F-3"; Exh. "6-C")
For this reason, Coronels canceled and rescinded the contract (Exh. "A") with Ramona by depositing the down payment
paid by Concepcion in the bank in trust for Ramona Patricia Alcaraz.
On February 22, 1985, Concepcion, et al., filed a complaint for specific performance against the Coronels and caused
the annotation of a notice of lis pendens at the back of TCT No. 327403 (Exh. "E"; Exh. "5").
On April 2, 1985, Catalina caused the annotation of a notice of adverse claim covering the same property with the
Registry of Deeds of Quezon City (Exh. "F"; Exh. "6").
On April 25, 1985, the Coronels executed a Deed of Absolute Sale over the subject property in favor of Catalina (Exh.
"G"; Exh. "7").
On June 5, 1985, a new title over the subject property was issued in the name of Catalina under TCT No. 351582 (Exh.
"H"; Exh. "8").
In the course of the proceedings before the trial court (Branch 83, RTC, Quezon City) the parties agreed to submit the
case for decision solely on the basis of documentary exhibits. Thus, plaintiffs therein (now private respondents)
proffered their documentary evidence accordingly marked as Exhibits "A" through "J", inclusive of their corresponding
submarkings. Adopting these same exhibits as their own, then defendants (now petitioners) accordingly offered and
marked them as Exhibits "1" through "10", likewise inclusive of their corresponding submarkings. Upon motion of the
parties, the trial court gave them thirty (30) days within which to simultaneously submit their respective memoranda,
and an additional 15 days within which to submit their corresponding comment or reply thereof, after which, the case
would be deemed submitted for resolution.
On April 14, 1988, the case was submitted for resolution before Judge Reynaldo Roura, who was then temporarily
detailed to preside over Branch 82 of the RTC of Quezon City. On March 1, 1989, judgment was handed down by Judge
Roura from his regular bench at Macabebe, Pampanga for the Quezon City branch, disposing as follows:
WHEREFORE, judgment for specific performance is hereby rendered ordering defendant to execute in favor of plaintiffs
a deed of absolute sale covering that parcel of land embraced in and covered by Transfer Certificate of Title No. 327403
(now TCT No. 331582) of the Registry of Deeds for Quezon City, together with all the improvements existing thereon
free from all liens and encumbrances, and once accomplished, to immediately deliver the said document of sale to
plaintiffs and upon receipt thereof, the said document of sale to plaintiffs and upon receipt thereof, the plaintiffs are

ordered to pay defendants the whole balance of the purchase price amounting to P1,190,000.00 in cash. Transfer
Certificate of Title No. 331582 of the Registry of Deeds for Quezon City in the name of intervenor is hereby canceled
and declared to be without force and effect. Defendants and intervenor and all other persons claiming under them are
hereby ordered to vacate the subject property and deliver possession thereof to plaintiffs. Plaintiffs' claim for damages
and attorney's fees, as well as the counterclaims of defendants and intervenors are hereby dismissed.
No pronouncement as to costs. So Ordered.
A motion for reconsideration was filed by petitioner before the new presiding judge of the Quezon City RTC but the
same was denied by Judge Estrella T. Estrada, thusly:
The prayer contained in the instant motion, i.e., to annul the decision and to render anew decision by the undersigned
Presiding Judge should be denied for the following reasons: (1) The instant case became submitted for decision as of
April 14, 1988 when the parties terminated the presentation of their respective documentary evidence and when the
Presiding Judge at that time was Judge Reynaldo Roura. The fact that they were allowed to file memoranda at some
future date did not change the fact that the hearing of the case was terminated before Judge Roura and therefore the
same should be submitted to him for decision; (2) When the defendants and intervenor did not object to the authority
of Judge Reynaldo Roura to decide the case prior to the rendition of the decision, when they met for the first time
before the undersigned Presiding Judge at the hearing of a pending incident in Civil Case No. Q-46145 on November 11,
1988, they were deemed to have acquiesced thereto and they are now estopped from questioning said authority of
Judge Roura after they received the decision in question which happens to be adverse to them; (3) While it is true that
Judge Reynaldo Roura was merely a Judge-on-detail at this Branch of the Court, he was in all respects the Presiding
Judge with full authority to act on any pending incident submitted before this Court during his incumbency. When he
returned to his Official Station at Macabebe, Pampanga, he did not lose his authority to decide or resolve such cases
submitted to him for decision or resolution because he continued as Judge of the Regional Trial Court and is of co-equal
rank with the undersigned Presiding Judge. The standing rule and supported by jurisprudence is that a Judge to whom a
case is submitted for decision has the authority to decide the case notwithstanding his transfer to another branch or
region of the same court (Sec. 9, Rule 135, Rule of Court).
Coming now to the twin prayer for reconsideration of the Decision dated March 1, 1989 rendered in the instant case,
resolution of which now pertains to the undersigned Presiding Judge, after a meticulous examination of the
documentary evidence presented by the parties, she is convinced that the Decision of March 1, 1989 is supported by
evidence and, therefore, should not be disturbed.
IN VIEW OF THE FOREGOING, the "Motion for Reconsideration and/or to Annul Decision and Render Anew Decision by
the Incumbent Presiding Judge" dated March 20, 1989 is hereby DENIED. SO ORDERED.
Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of Appeals (Buena, Gonzaga-Reyes,
Abad Santos (P), JJ.) rendered its decision fully agreeing with the trial court.
Hence, the instant petition which was filed on March 5, 1992. The last pleading, private respondents' Reply
Memorandum, was filed on September 15, 1993. The case was, however, re-raffled to undersigned ponente only on
August 28, 1996, due to the voluntary inhibition of the Justice to whom the case was last assigned.
While we deem it necessary to introduce certain refinements in the disquisition of respondent court in the affirmance of
the trial court's decision, we definitely find the instant petition bereft of merit.
The heart of the controversy which is the ultimate key in the resolution of the other issues in the case at bar is the
precise determination of the legal significance of the document entitled "Receipt of Down Payment" which was offered
in evidence by both parties. There is no dispute as to the fact that said document embodied the binding contract
between Ramona Patricia Alcaraz on the one hand, and the heirs of Constancio P. Coronel on the other, pertaining to a
particular house and lot covered by TCT No. 119627, as defined in Article 1305 of the Civil Code of the Philippines
which reads as follows:
Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other,
to give something or to render some service.
While, it is the position of private respondents that the "Receipt of Down Payment" embodied a perfected contract of
sale, which perforce, they seek to enforce by means of an action for specific performance, petitioners on their part
insist that what the document signified was a mere executory contract to sell, subject to certain suspensive conditions,
and because of the absence of Ramona P. Alcaraz, who left for the United States of America, said contract could not
possibly ripen into a contract absolute sale.
Plainly, such variance in the contending parties' contentions is brought about by the way each interprets the terms
and/or conditions set forth in said private instrument. Withal, based on whatever relevant and admissible evidence may
be available on record, this, Court, as were the courts below, is now called upon to adjudge what the real intent of the
parties was at the time the said document was executed.
The Civil Code defines a contract of sale, thus:
Art. 1458. 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 therefor a price certain in money or its equivalent.
Sale, by its very nature, is a consensual contract because it is perfected by mere consent. The essential elements of a
contract of sale are the following:
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.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale because the first essential element
is lacking. In a contract to sell, the prospective seller explicity reserves the transfer of title to the prospective buyer,

meaning, the prospective seller does not as yet agree or consent to transfer ownership of the property subject of the
contract to sell until the happening of an event, which for present purposes we shall take as the full payment of the
purchase price. What the seller agrees or obliges himself to do is to fulfill is promise to sell the subject property when
the entire amount of the purchase price is delivered to him. In other words the full payment of the purchase price
partakes of a suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and thus,
ownership is retained by the prospective seller without further remedies by the prospective buyer. In Roque
vs. Lapuz (96 SCRA 741 [1980]), this Court had occasion to rule:
Hence, We hold that the contract between the petitioner and the respondent was a contract to sell where the
ownership or title is retained by the seller and is not to pass until the full payment of the price, such payment being a
positive suspensive condition and 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.
Stated positively, upon the fulfillment of the suspensive condition which is the full payment of the purchase price, the
prospective seller's obligation to sell the subject property by entering into a contract of sale with the prospective buyer
becomes demandable as provided in Article 1479 of the Civil Code which states:
Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if
the promise is supported by a consideration distinct from the price.
A contract to sell may thus be 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 the
purchase price.
A contract to sell as defined hereinabove, may not even be considered as a conditional contract of sale where the seller
may likewise reserve title to the property subject of the sale until the fulfillment of a suspensive condition, because in a
conditional contract of sale, the first element of consent is present, although it is conditioned upon the happening of a
contingent event which may or may not occur. If the suspensive condition is not fulfilled, the perfection of the contract
of sale is completely abated (cf. Homesite and housing Corp. vs. Court of Appeals, 133 SCRA 777 [1984]). However, if
the suspensive condition is fulfilled, the contract of sale is thereby perfected, such that if there had already been
previous delivery of the property subject of the sale to the buyer, ownership thereto automatically transfers to the
buyer by operation of law without any further act having to be performed by the seller.
In a contract to sell, upon the fulfillment of the suspensive condition which is the full payment of the purchase price,
ownership will not automatically transfer to the buyer although the property may have been previously delivered to
him. The prospective seller still has to convey title to the prospective buyer by entering into a contract of absolute sale.
It is essential to distinguish between a contract to sell and a conditional contract of sale specially in cases where the
subject property is sold by the owner not to the party the seller contracted with, but to a third person, as in the case at
bench. In a contract to sell, there being no previous sale of the property, a third person buying such property despite
the fulfillment of the suspensive condition such as the full payment of the purchase price, for instance, cannot be
deemed a buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance of the property. There is
no double sale in such case. Title to the property will transfer to the buyer after registration because there is no defect
in the owner-seller's title per se, but the latter, of course, may be used for damages by the intending buyer.
In a conditional contract of sale, however, upon the fulfillment of the suspensive condition, the sale becomes absolute
and this will definitely affect the seller's title thereto. In fact, if there had been previous delivery of the subject property,
the seller's ownership or title to the property is automatically transferred to the buyer such that, the seller will no
longer have any title to transfer to any third person. Applying Article 1544 of the Civil Code, such second buyer of the
property who may have had actual or constructive knowledge of such defect in the seller's title, or at least was charged
with the obligation to discover such defect, cannot be a registrant in good faith. Such second buyer cannot defeat the
first buyer's title. In case a title is issued to the second buyer, the first buyer may seek reconveyance of the property
subject of the sale.
With the above postulates as guidelines, we now proceed to the task of deciphering the real nature of the contract
entered into by petitioners and private respondents.
It is a canon in the interpretation of contracts that the words used therein should be given their natural and ordinary
meaning unless a technical meaning was intended (Tan vs. Court of Appeals, 212 SCRA 586 [1992]). Thus, when
petitioners declared in the said "Receipt of Down Payment" that they
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City, the sum of Fifty Thousand Pesos purchase
price of our inherited house and lot, covered by TCT No. 1199627 of the Registry of Deeds of Quezon City, in the total
amount of P1,240,000.00. without any reservation of title until full payment of the entire purchase price, the natural
and ordinary idea conveyed is that they sold their property.
When the "Receipt of Down Payment" is considered in its entirety, it becomes more manifest that there was a clear
intent on the part of petitioners to transfer title to the buyer, but since the transfer certificate of title was still in the
name of petitioner's father, they could not fully effect such transfer although the buyer was then willing and able to
immediately pay the purchase price. Therefore, petitioners-sellers undertook upon receipt of the down payment from
private respondent Ramona P. Alcaraz, to cause the issuance of a new certificate of title in their names from that of
their father, after which, they promised to present said title, now in their names, to the latter and to execute the deed
of absolute sale whereupon, the latter shall, in turn, pay the entire balance of the purchase price.
The agreement could not have been a contract to sell because the sellers herein made no express reservation of
ownership or title to the subject parcel of land. Furthermore, the circumstance which prevented the parties from
entering into an absolute contract of sale pertained to the sellers themselves (the certificate of title was not in their
names) and not the full payment of the purchase price. Under the established facts and circumstances of the case, the
Court may safely presume that, had the certificate of title been in the names of petitioners-sellers at that time, there

would have been no reason why an absolute contract of sale could not have been executed and consummated right
there and then.
Moreover, unlike in a contract to sell, petitioners in the case at bar did not merely promise to sell the properly to
private respondent upon the fulfillment of the suspensive condition. On the contrary, having already agreed to sell the
subject property, they undertook to have the certificate of title changed to their names and immediately thereafter, to
execute the written deed of absolute sale.
Thus, the parties did not merely enter into a contract to sell where the sellers, after compliance by the buyer with
certain terms and conditions, promised to sell the property to the latter. What may be perceived from the respective
undertakings of the parties to the contract is that petitioners had already agreed to sell the house and lot they
inherited from their father, completely willing to transfer full ownership of the subject house and lot to the buyer if the
documents were then in order. It just happened, however, that the transfer certificate of title was then still in the name
of their father. It was more expedient to first effect the change in the certificate of title so as to bear their names. That
is why they undertook to cause the issuance of a new transfer of the certificate of title in their names upon receipt of
the down payment in the amount of P50,000.00. As soon as the new certificate of title is issued in their names,
petitioners were committed to immediately execute the deed of absolute sale. Only then will the obligation of the buyer
to pay the remainder of the purchase price arise.
There is no doubt that unlike in a contract to sell which is most commonly entered into so as to protect the seller
against a buyer who intends to buy the property in installment by withholding ownership over the property until the
buyer effects full payment therefor, in the contract entered into in the case at bar, the sellers were the one who were
unable to enter into a contract of absolute sale by reason of the fact that the certificate of title to the property was still
in the name of their father. It was the sellers in this case who, as it were, had the impediment which prevented, so to
speak, the execution of an contract of absolute sale.
What is clearly established by the plain language of the subject document is that when the said "Receipt of Down
Payment" was prepared and signed by petitioners Romeo A. Coronel, et al., the parties had agreed to a conditional
contract of sale, consummation of which is subject only to the successful transfer of the certificate of title from the
name of petitioners' father, Constancio P. Coronel, to their names.
The Court significantly notes this suspensive condition was, in fact, fulfilled on February 6, 1985 (Exh. "D"; Exh. "4").
Thus, on said date, the conditional contract of sale between petitioners and private respondent Ramona P. Alcaraz
became obligatory, the only act required for the consummation thereof being the delivery of the property by means of
the execution of the deed of absolute sale in a public instrument, which petitioners unequivocally committed
themselves to do as evidenced by the "Receipt of Down Payment."
Article 1475, in correlation with Article 1181, both of the Civil Code, plainly applies to the case at bench. Thus,
Art. 1475. The contract of sale is perfected at the moment there is a meeting of 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.
Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already
acquired, shall depend upon the happening of the event which constitutes the condition.
Since the condition contemplated by the parties which is the issuance of a certificate of title in petitioners' names was
fulfilled on February 6, 1985, the respective obligations of the parties under the contract of sale became mutually
demandable, that is, petitioners, as sellers, were obliged to present the transfer certificate of title already in their
names to private respondent Ramona P. Alcaraz, the buyer, and to immediately execute the deed of absolute sale,
while the buyer on her part, was obliged to forthwith pay the balance of the purchase price amounting to
P1,190,000.00.
It is also significant to note that in the first paragraph in page 9 of their petition, petitioners conclusively admitted that:
3. The petitioners-sellers Coronel bound themselves "to effect the transfer in our names from our deceased father
Constancio P. Coronel, the transfer certificate of title immediately upon receipt of the downpayment above-stated". The
sale was still subject to this suspensive condition.
Petitioners themselves recognized that they entered into a contract of sale subject to a suspensive condition. Only,
they contend, continuing in the same paragraph, that:
. . . Had petitioners-sellers not complied with this condition of first transferring the title to the property under their
names, there could be no perfected contract of sale.
not aware that they set their own trap for themselves, for Article 1186 of the Civil Code expressly provides that:
Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
Besides, it should be stressed and emphasized that what is more controlling than these mere hypothetical arguments is
the fact that the condition herein referred to was actually and indisputably fulfilled on February 6, 1985 , when a new
title was issued in the names of petitioners as evidenced by TCT No. 327403 (Exh. "D"; Exh. "4").
The inevitable conclusion is that on January 19, 1985, as evidenced by the document denominated as "Receipt of Down
Payment" (Exh. "A"; Exh. "1"), the parties entered into a contract of sale subject only to the suspensive condition that
the sellers shall effect the issuance of new certificate title from that of their father's name to their names and that, on
February 6, 1985, this condition was fulfilled (Exh. "D"; Exh. "4").
We, therefore, hold that, in accordance with Article 1187 which pertinently provides
Art. 1187. The effects of conditional obligation to give, once the condition has been fulfilled, shall retroact to the day of
the constitution of the obligation . . .

In obligation to do or not to do, the courts shall determine, in each case, the retroactive effect of the condition that has
been complied with.
the rights and obligations of the parties with respect to the perfected contract of sale became mutually due and
demandable as of the time of fulfillment or occurrence of the suspensive condition on February 6, 1985. As of that point
in time, reciprocal obligations of both seller and buyer arose.
Petitioners also argue there could been no perfected contract on January 19, 1985 because they were then not yet the
absolute owners of the inherited property.
We cannot sustain this argument.
Article 774 of the Civil Code defines Succession as a mode of transferring ownership as follows:
Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to be extent and
value of the inheritance of a person are transmitted through his death to another or others by his will or by operation of
law.
Petitioners-sellers in the case at bar being the sons and daughters of the decedent Constancio P. Coronel are
compulsory heirs who were called to succession by operation of law. Thus, at the point their father drew his last breath,
petitioners stepped into his shoes insofar as the subject property is concerned, such that any rights or obligations
pertaining thereto became binding and enforceable upon them. It is expressly provided that rights to the succession
are transmitted from the moment of death of the decedent (Article 777, Civil Code; Cuison vs. Villanueva, 90 Phil. 850
[1952]).
Be it also noted that petitioners' claim that succession may not be declared unless the creditors have been paid is
rendered moot by the fact that they were able to effect the transfer of the title to the property from the decedent's
name to their names on February 6, 1985.
Aside from this, petitioners are precluded from raising their supposed lack of capacity to enter into an agreement at
that time and they cannot be allowed to now take a posture contrary to that which they took when they entered into
the agreement with private respondent Ramona P. Alcaraz. The Civil Code expressly states that:
Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the person making it, and
cannot be denied or disproved as against the person relying thereon.
Having represented themselves as the true owners of the subject property at the time of sale, petitioners cannot claim
now that they were not yet the absolute owners thereof at that time.
Petitioners also contend that although there was in fact a perfected contract of sale between them and Ramona P.
Alcaraz, the latter breached her reciprocal obligation when she rendered impossible the consummation thereof by
going to the United States of America, without leaving her address, telephone number, and Special Power of Attorney
(Paragraphs 14 and 15, Answer with Compulsory Counterclaim to the Amended Complaint, p. 2; Rollo, p. 43), for which
reason, so petitioners conclude, they were correct in unilaterally rescinding rescinding the contract of sale.
We do not agree with petitioners that there was a valid rescission of the contract of sale in the instant case. We note
that these supposed grounds for petitioners' rescission, are mere allegations found only in their responsive pleadings,
which by express provision of the rules, are deemed controverted even if no reply is filed by the plaintiffs (Sec. 11, Rule
6, Revised Rules of Court). The records are absolutely bereft of any supporting evidence to substantiate petitioners'
allegations. We have stressed time and again that allegations must be proven by sufficient evidence (Ng Cho Cio vs. Ng
Diong, 110 Phil. 882 [1961]; Recaro vs. Embisan, 2 SCRA 598 [1961]. Mere allegation is not an evidence (Lagasca vs.
De Vera, 79 Phil. 376 [1947]).
Even assuming arguendo that Ramona P. Alcaraz was in the United States of America on February 6, 1985, we cannot
justify petitioner-sellers' act of unilaterally and extradicially rescinding the contract of sale, there being no express
stipulation authorizing the sellers to extarjudicially rescind the contract of sale. (cf. Dignos vs. CA, 158 SCRA 375
[1988]; Taguba vs. Vda. de Leon, 132 SCRA 722 [1984])
Moreover, petitioners are estopped from raising the alleged absence of Ramona P. Alcaraz because although the
evidence on record shows that the sale was in the name of Ramona P. Alcaraz as the buyer, the sellers had been
dealing with Concepcion D. Alcaraz, Ramona's mother, who had acted for and in behalf of her daughter, if not also in
her own behalf. Indeed, the down payment was made by Concepcion D. Alcaraz with her own personal check (Exh. "B";
Exh. "2") for and in behalf of Ramona P. Alcaraz. There is no evidence showing that petitioners ever questioned
Concepcion's authority to represent Ramona P. Alcaraz when they accepted her personal check. Neither did they raise
any objection as regards payment being effected by a third person. Accordingly, as far as petitioners are concerned,
the physical absence of Ramona P. Alcaraz is not a ground to rescind the contract of sale.
Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default, insofar as her obligation to pay the full
purchase price is concerned. Petitioners who are precluded from setting up the defense of the physical absence of
Ramona P. Alcaraz as above-explained offered no proof whatsoever to show that they actually presented the new
transfer certificate of title in their names and signified their willingness and readiness to execute the deed of absolute
sale in accordance with their agreement. Ramona's corresponding obligation to pay the balance of the purchase price
in the amount of P1,190,000.00 (as buyer) never became due and demandable and, therefore, she cannot be deemed
to have been in default.
Article 1169 of the Civil Code defines when a party in a contract involving reciprocal obligations may be considered in
default, to wit:
Art. 1169. Those obliged to deliver or to do something, incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation. xxx xxx xxx
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper
manner with what is incumbent upon him. From the moment one of the parties fulfill his obligation, delay by the other
begins.

There is thus neither factual nor legal basis to rescind the contract of sale between petitioners and respondents.
With the foregoing conclusions, the sale to the other petitioner, Catalina B. Mabanag, gave rise to a case of double sale
where Article 1544 of the Civil Code will apply, to wit:
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the
person who may have first taken possession thereof in good faith, if it should be movable property.
Should if be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded
it in Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession;
and, in the absence thereof to the person who presents the oldest title, provided there is good faith.
The record of the case shows that the Deed of Absolute Sale dated April 25, 1985 as proof of the second contract of
sale was registered with the Registry of Deeds of Quezon City giving rise to the issuance of a new certificate of title in
the name of Catalina B. Mabanag on June 5, 1985. Thus, the second paragraph of Article 1544 shall apply.
The above-cited provision on double sale presumes title or ownership to pass to the first buyer, the exceptions being:
(a) when the second buyer, in good faith, registers the sale ahead of the first buyer, and (b) should there be no
inscription by either of the two buyers, when the second buyer, in good faith, acquires possession of the property
ahead of the first buyer. Unless, the second buyer satisfies these requirements, title or ownership will not transfer to
him to the prejudice of the first buyer.
In his commentaries on the Civil Code, an accepted authority on the subject, now a distinguished member of the Court,
Justice Jose C. Vitug, explains:
The governing principle is prius tempore, potior jure (first in time, stronger in right). Knowledge by the first buyer of the
second sale cannot defeat the first buyer's rights except when the second buyer first registers in good faith the second
sale (Olivares vs. Gonzales, 159 SCRA 33). Conversely, knowledge gained by the second buyer of the first sale defeats
his rights even if he is first to register, since knowledge taints his registration with bad faith (see also Astorga vs. Court
of Appeals, G.R. No. 58530, 26 December 1984). In Cruz vs. Cabana (G.R. No. 56232, 22 June 1984, 129 SCRA 656), it
has held that it is essential, to merit the protection of Art. 1544, second paragraph, that the second realty buyer must
act in good faith in registering his deed of sale (citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs. CA,
G.R.
No.
95843,
02
September
1992).
(J. Vitug Compendium of Civil Law and Jurisprudence, 1993 Edition, p. 604).
Petitioner point out that the notice of lis pendens in the case at bar was annoted on the title of the subject property
only on February 22, 1985, whereas, the second sale between petitioners Coronels and petitioner Mabanag was
supposedly perfected prior thereto or on February 18, 1985. The idea conveyed is that at the time petitioner Mabanag,
the second buyer, bought the property under a clean title, she was unaware of any adverse claim or previous sale, for
which reason she is buyer in good faith.
We are not persuaded by such argument.
In a case of double sale, what finds relevance and materiality is not whether or not the second buyer was a buyer in
good faith but whether or not said second buyer registers such second sale in good faith, that is, without knowledge of
any defect in the title of the property sold.
As clearly borne out by the evidence in this case, petitioner Mabanag could not have in good faith, registered the sale
entered into on February 18, 1985 because as early as February 22, 1985, a notice of lis pendens had been annotated
on the transfer certificate of title in the names of petitioners, whereas petitioner Mabanag registered the said sale
sometime in April, 1985. At the time of registration, therefore, petitioner Mabanag knew that the same property had
already been previously sold to private respondents, or, at least, she was charged with knowledge that a previous
buyer is claiming title to the same property. Petitioner Mabanag cannot close her eyes to the defect in petitioners' title
to the property at the time of the registration of the property.
This Court had occasions to rule that:
If a vendee in a double sale registers that sale after he has acquired knowledge that there was a previous sale of the
same property to a third party or that another person claims said property in a pervious sale, the registration will
constitute a registration in bad faith and will not confer upon him any right.
Thus, the sale of the subject parcel of land between petitioners and Ramona P. Alcaraz, perfected on February 6, 1985,
prior to that between petitioners and Catalina B. Mabanag on February 18, 1985, was correctly upheld by both the
courts below.
Although there may be ample indications that there was in fact an agency between Ramona as principal and
Concepcion, her mother, as agent insofar as the subject contract of sale is concerned, the issue of whether or not
Concepcion was also acting in her own behalf as a co-buyer is not squarely raised in the instant petition, nor in such
assumption disputed between mother and daughter. Thus, We will not touch this issue and no longer disturb the lower
courts' ruling on this point.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED and the appealed judgment AFFIRMED. SO
ORDERED.
VICENTE GOMEZ, as successor-in-interest of awardee LUISA GOMEZ v. CA, City of MANILA acting thru the
City Tenants Security Committee now the Urban Settlement Office, Register of Deeds of Manila
G.R. No. 120747 September 21, 2000 BUENA, J.
Pursuant to the Land for the Landless Program of the City of Manila and in accordance with City Ordinance No. 6880,
the Office of City Mayor issued Resolution No. 16-A, 3 Series of 1978, dated 17 May 1978, which effectively set

guidelines and criteria for the award of city home lots to qualified and deserving applicants. Attached to said resolution
and made as integral part thereof was a Contract to Sell 4 that further laid down terms and conditions which the lot
awardee must comply with.
On 30 June 1978, the City of Manila, through the City Tenants Security Committee (CTSC) presently known as the Urban
Settlement Office (URBAN), passed Resolution 17-78 5 which in effect awarded to 46 applicants, 37 homelots in the
former Ampil-Gorospe estate located in Tondo, Manila. Luisa Gomez, predecessor-in-interest of herein petitioner Vicente
Gomez, was awarded Lot 4, Block 1, subject to the provisions of Resolution No. 3-78 of the CTSC and building,
subdivision and zoning rules and regulations.
Consequently, a certificate of award6 dated 02 July 1978 was granted by the CTSC in favor of Luisa Gomez, who paid
the purchase price of the lot in the amount of P3,556.00 on installment basis, 7 said payments being duly covered by
official receipts.
In 1979, Luisa Gomez traveled to the Unites States of America but returned to the Philippines in the same year.
On 18 January 1980, Luisa Gomez finally paid in full the P3,556.00 purchase price of the lot. Despite the full payment,
Luisa still paid in installment an amount of P8,244.00, in excess of the purchase price, which the City of Manila, through
the CTSC, accepted. Additionally, the lot was declared for taxation purposes and the corresponding real estate taxes
thereon paid from 1980-1988. In 1982, Luisa, together with her spouse Daniel, left again for the United States of
America where she died8 on 09 January 1983. She is survived by her husband and four children, namely, Ramona G.
Takorda, Edgardo Gomez, Erlinda G. Pena, and Rebecca G. Dizon. 9
Subsequently, in a memorandum dated 07 February 1984, the Urban Settlements Officer and Member-Executive
Secretary of the CTSC directed the Western Police District, City Hall Detachment, to conduct an investigation regarding
reported violations of the terms and conditions of the award committed by the lot awardees.
Thus, on 23 November 1984, a team headed by Pfc. Reynaldo Cristobal of the Western Police District, proceeded to the
former Ampil-Gorospe estate where the subject lots are located, and conducted an investigation of alleged violations
thereat.
On 19 December 1984, team leader Pfc. Reynaldo Cristobal rendered an investigation report 10 addressed to the City
Mayor of Manila, as Chairman of the CTSC, stating, among others, the following findings:
". . . After the said operation, it was found out that of all the lot awardees in the said estate, the following were
confirmed to have violated the terms and conditions of their respective awards as indicated opposite their names, to
wit:
". . . 2. Name of awardee: Daniel Gomez
Address: No. 2557-C Juan Luna St. Tondo, Manila
Violation: The place was found actually occupied by Mrs. Erlinda Perez and her family together with Mr. Mignony
Lorghas and family, who are paying monthly rentals of P210.00 each to Vicente Gomez, brother of awardee. Daniel
Gomez is now presently residing in the United States of America and only returns for vacation once in a while as a
'Balikbayan' . . ."
Thus, on 01 July 1986, the CTSC, headed by then City Mayor Gemiliano Lopez, Jr. as Chairman, issued Resolution No.
015-86,11 adopting the findings of the investigation report submitted by Pfc. Cristobal, and ordering the cancellation of
the lot awards of Daniel Gomez and other awardees who were found to have committed violations, and further
declaring the forfeiture of payments made by said awardees as reasonable compensation for the use of the homelots.
In a letter 12 dated 04 August 1986, herein petitioner Vicente Gomez, acting as attorney-in-fact 13 of his brother Daniel
Gomez (spouse of Luisa Gomez) asked for reconsideration of the CTSC resolution revoking the award of the lot.
On 28 June 1988, Daniel Gomez, spouse of awardee Luisa Gomez, died in the United States of America. Eventually, on
01 February 1989, the surviving children of the deceased spouses, who were American citizens and residents of the
United States of America, executed an affidavit of adjudication with deed of donation 14 disposing gratuitously Lot No. 1,
Block 4, in-Favor of their uncle Vicente Gomez.
On 20 February 1989, petitioner Vicente Gomez filed a memorandum 15 before the CTSC praying that Resolution 15-86
be set aside and that the award of the lot be restored to Luisa Gomez, or her heirs or successor-in-interest, preferably
Vicente Gomez.
Thereafter, two supplemental memoranda, dated 26 July 1989 16 and 10 January 1990,17 were submitted by petitioner
before the CTSC reiterating the prayer in the initial memorandum.
On 05 February 1990, herein petitioner filed before the Regional Trial Court (RTC) of Manila, Branch 12, a petition for
certiorari, prohibition and mandamus docketed as Civil Case No. 90-51930, entitled "Vicente Gomez, as successor-ininterest of Awardee, Luisa Gomez, petitioner, versus City Tenant's Security Committee (now Urban Settlement Office)
and Register of Deeds of Manila, respondents."
In an order18 dated 24 April 1990, the lower court directed the petitioner to amend its petition so as to implead the
proper government agency.
Hence, petitioner filed an amended petition 19 impleading the City of Manila as respondent, to which the latter
submitted an answer. 20
Accordingly, after the presentation of evidence, the lower court promulgated its decision 21 dated 20 January 1993, the
decretal portion of which reads:
Wherefore, the petition is hereby granted:

"1. Ordering the City of Manila through its agency the City Tenants Security Committee (now Urban Settlement Office)
to set aside the order of cancellation of the award for Lot No. 4, Block 1 (formerly of the Ampil-Gorospe estate) in favor
of Luisa Gomez, her heirs and successor-in-interest, the herein petitioner;
"2. Prohibiting the City of Manila through its agency including the Register of Deeds of Manila from awarding the same
lot and issuing the corresponding certificate of title therefor to any other person;
"3. Ordering the City of Manila through its agency the City Tenant's Security Committee (now Urban Settlement Office)
to execute a Deed of Absolute Sale over the aforementioned lot in favor of the petitioner as successor-in-interest of the
awardee and further ordering them to stop and/or refrain from disturbing the peaceful physical possession thereof of
(sic) the petitioner; and
"4. Ordering the City of Manila through its agency the City Tenant's Security Committee (now Urban Settlement Office)
to refund to the petitioner his overpayments amounting to P8,244.00 and to pay the costs of suit."
On appeal, the Court of Appeals reversed the lower court's decision prompting petitioner to file a motion for
reconsideration which the appellate court denied via its assailed resolution dated 29 June 1995.
Hence, the instant appeal where the core of controversy revolves around the propriety of CTSC's act of canceling the
lot award, through Resolution No. 015-86, and further declaring the forfeiture of amounts paid by the awardee, as
reasonable compensation for the use of the home lot.
The petition is unmeritorious.
A thorough scrutiny of the records and an even more exhaustive perusal of the evidence, both documentary and
testimonial, would lead to the inevitable conclusion that the fact of cancellation of the award covering Lot 4, Block 1, by
the City of Manila, acting through the CTSC, was properly exercised within the bounds of law and contractual stipulation
between the parties.
Viewed broadly, petitioner anchors his case on the premise, albeit erroneous, that upon full payment of the purchase
price of the lot in January 1980, Luisa Gomez, actual awardee, already acquired a vested right over the real property
subject of the present controversy. Thus, according to petitioner, upon the death of Luisa Gomez on 09 January 1983,
the alleged vested right was transmitted by operation of law to her lawful heirs, pursuant to Article 777 of the Civil
Code. Additionally, petitioner submits that by virtue of the affidavit of adjudication with Deed of Donation executed on
01 February 1989 in his favor by the surviving children of Luisa, he, in effect, became the successor-in-interest of Luisa
and thus entitled to whatever rights enjoyed by the latter over the property.
In the light of existing law and jurisprudence and based on the evidence adduced, this Court finds difficulty giving
credence and weight to petitioner's submissions. We therefore rule that the cancellation of the award of Lot 4, Block 1,
through the expediency of Resolution No. 015-86, was proper.
Primarily, it must be stressed that the contract entered into between the City of Manila and awardee Luisa Gomez was
not one of sale but a contract to sell, which, under both statutory and case law, has its own attributes, peculiarities and
effects.
Speaking through Mr. Justice Florenz Regalado, this Court in Adelfa Properties, Inc. vs. Court of Appeals, 22mapped out
the bold distinctions between these species of contracts, to wit:
"In a 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 purchase 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 being 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."
To our mind, however, this pronouncement should not curtail the right of the parties in a contract to sell to provide
additional stipulations, nor bar them from imposing conditions relative to the transfer of ownership.
To be sure, a contract of sale may either be absolute or conditional. One form of conditional sales is what is now
popularly termed as a "Contract to Sell", where ownership or title is retained until the fulfillment of a positive
suspensive condition normally the payment of the purchase price in the manner agreed upon. 23 (Emphasis ours)
From the above disquisition in Galang and applying Article 1306 of the Civil Code, the contracting parties are accorded
the liberality and freedom to establish such stipulations, clauses, terms and conditions as they may deem convenient,
provided the same are not contrary to law, morals, good custom, public order or public policy. In the law on contracts,
such fundamental principle is known as the autonomy of contracts.
Under the present circumstances, we see no hindrance that prohibits the parties from stipulating other lawful
conditions, aside from full payment of the purchase price, which they pledge to bind themselves and upon which
transfer of ownership depends.
In the instant case, we uphold the Contract to Sell, duly annexed and attached to Resolution 16-A, which explicitly
provides for additional terms and conditions upon which the lot awardees are bound. Although unsigned, the Contract
to Sell, in addition to the provisions of Resolution 16-A, constitutes the law between the contracting parties. After all,
under the law there exists a binding contract between the parties whose minds have met on a certain matter
notwithstanding that they did not affix their signatures to its written form. 24
For a contract, like a contract to sell, involves a meeting of minds between two persons whereby one binds himself,
with respect to the other, to give something or to render some service. Contracts, in general, are perfected by mere
consent, which is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to
constitute the contract. The offer must be certain and the acceptance absolute. 25

As to the matter of acceptance, the same may be evidenced by some acts, or conduct, communicated to the offeror,
either in a formal or an informal manner, that clearly manifest the intention or determination to accept the offer to buy
or sell.26
In the case at bar, acceptance on the part of the vendee was manifested through a plethora of acts, such as payment
of the purchase price, declaration of the property for taxation purposes, and payment of real estate taxes thereon, and
similar acts showing vendee's assent to the contract.
Verily, Resolution 16-A and the Contract to Sell which was annexed, attached and made to form part of said resolution,
clearly laid down the terms and conditions which the awardee-vendee must comply with. Accordingly, as an awardee,
Luisa Gomez, her heirs and successors-in-interest alike, are duty-bound to perform the correlative obligations embodied
in Resolution 16-A and the Contract to-Sell.
Resolution 16-A, Series of 1978, explicitly provides that aside from the requirement of Filipino citizenship and legal age,
the basic criteria for award of the lot pursuant to the Land for the Landless Program of the City of Manila shall be the
following:
"a) Occupancy The applicant must be the legal and actual or physical occupant of the lot in question at the time of
its acquisition by the City. He must be the owner of the house and lot, must be using the same for his residential
purposes, and must have had a lessee-lessor relationship with the previous owner of the land or landed estate of which
the subject lot is a part.
"b) Non-ownership of land The applicant and/or his spouse, if he is married, must not be an owner of any parcel of
land in Manila, Metropolitan Manila or elsewhere in the Philippines. Neither must he and/or his spouse be a prospective
owner or a buyer on installment basis of any lot other than that which he is occupying and for which he is applying for
award from the City.
"c) Capacity to pay The applicant must have such financial means and/or support as will enable him to make regular
payments of amortizations or installments for the lot if the same is awarded to him."
Of equal importance are the essential terms and conditions embraced in the Contract to Sell, which awardee Luisa
Gomez, her heirs and successors-in-interest, violated, to wit:
". . . Par.(3). The vendee shall occupy and use the lot exclusively for his/her residential purpose . . .
". . . Par. (5). The vendee hereby warrants and declares under oath that he/she is a bona fide and actual occupant and
tenant of the lot; . . . and that he/she fully understands that any false statement or misrepresentation hereof (sic) shall
be sufficient cause for the automatic cancellation of his/her rights under this agreement as well as ground for criminal
prosecution.
"Par. (6). Until complete payment of the purchase price and compliance with all the vendee's obligations herein, title to
the lot remains in the name of the owner. During the effectivity of this agreement, however, the owner may transfer its
title or assign its rights and interest under this agreement to any person, corporation, bank or financial institution.
"Title shall pass to the vendee upon execution of a final deed of sale in his/her favor. . . .
"Par. (8). In order not to defeat the purpose of this social land reform program of the City of Manila. and to prevent real
estate speculations within twenty years from complete payment of the purchase price and execution of the final deed
of sale, the lot and residential house or improvement thereon shall not be sold, transferred, mortgaged, leased or
otherwise alienated or encumbered without the written consent of the City Mayor.
"Par. (9). During the effectivity of this agreement, the residential house or improvement thereon shall not be leased,
sold, transferred or otherwise alienated by the vendee without the written consent of the owner. . .
"Par. (14). In the event that the vendee dies before full payment of the purchase price of the lot, his/her surviving
spouse, children heirs and/or successors-in-interest shall succeed in all his/her rights and interest, as well as assume
all/his/her obligations under this agreement.
"Par. (15). This agreement shall be binding upon the heirs. executors and administrators of the vendee." (emphasis
ours)
Petitioner urges that awardee Luisa Gomez did not commit any violation of the lot award. On the contrary, the records
would indubitably show that Luisa Gomez, including her heirs and successors-in-interest, have performed acts that
constitute gross, if not brazen, violation of the aforementioned terms and conditions of the award, as evidenced by the
investigation report submitted by Pfc. Cristobal, dated 19 December 1984.
Results of the investigation conducted on 23 November 1984, reveal that the lot was actually occupied and leased by a
certain Erlinda Perez and Mignony Lorghas, together with their respective families, who were paying rentals to
petitioner Vicente Gomez for the lease of the subject premises.
Moreover, in a conference held on 13 January 1989 at the Office of the Acting Urban Settlement Officer, Lorghas
admitted that she has been leasing the property and paying rent to petitioner Vicente Gomez, thus:
"Atty. Bernardo:
Mrs. Lorghas, how long have you been renting the property?
Mrs. Lorghas:
I was living there since 1960 until today. I was renting a small room downfloor (sic). When the family
of Mr. Gomez died, kami na ang tumira sa itaas until now.
Atty. Bernardo:
Magkano ang upa mo?
Mrs. Lorghas:

P300 a month.
Atty. Bernardo:
Kanino?
Mrs. Lorghas:
Kay Vicente Gomez.
Atty. Bernardo:
Meron bang resibo?
Mrs. Lorghas:
Wala po.
Atty. Bernardo:
Noong 1973, kayo na rin ang nakatira sa lugar ni Gomez.
Mrs. Lorghas:
Opo."
Certainly, said acts constitute a brazen transgression of Resolution 16-A and clear contravention of the Contract to Sell,
specifically par. (3), (8) and (9) thereof.
The contract provides in no uncertain terms, that the abovementioned terms and conditions shall bind the heirs,
executors and administrators of the vendee. The contract further states that breach thereof would result to the
automatic cancellation of the vendee's rights thereunder.
Thus, par.(10) (b) (a) of the Contract to Sell, which reads:
". . . any violation of the terms and conditions of this agreement shall automatically cause the cancellation of the
vendee's rights under this agreement without necessity of prior notice or judicial declaration . . ."
Such kind of stipulation was upheld by this Court in the Adelfa case where we categorically declared that Article 1592
of the Civil Code, which requires rescission either by judicial action, or notarial act, does not apply to a contract to
sell.28
Moreover, judicial action for rescission of a contract is not necessary where the contract provides for automatic
rescission in case of breach,29 as in the contract involved in the present controversy.
Likewise, this Court sustains the forfeiture of the payments made by awardee as reasonable compensation for the use
of the lot. At this juncture, par. (1) of the Contract to Sell furnishes support to this conclusion:
". . . In case of the cancellation of the vendee's rights under this agreement as hereinafter stipulated, all payments
made by him/her shall be forfeited and considered as rentals for the use of the lot . . . "
Further, Article 1486 of the Civil Code provides that a stipulation that the installments or rents paid shall not be
returned to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the
circumstances.30
Applying the foregoing, we are of the considered view that the payment of the purchase price of P3,556.00, constitutes
fair and reasonable rental for the period in which said property was under the control of awardee Luisa Gomez, her
heirs and successors-in-interest. Undeniably, the awardee together with her heirs and successors-in-interest, have
gained benefits, financial or otherwise, for a period of eight years from the time of actual award of the lot to the time
of cancellation thereof (1978-1986).
Nonetheless, we ought to stress that in the present case, forfeiture of the installments paid as rentals, only applies to
the purchase price of P3,556.00 and not to the overpayment of the amount of P8,244.00.
Under these circumstances, the vendor should refund the amount of P8,244.00 representing the overpayment made,
plus interest, to be computed in accordance with the "rule of thumb" enunciated in the landmark case ofEastern
Shipping Lines, Inc. vs. Court of Appeals 31 and reiterated in the case of Philippine National Bank vs. Court of Appeals.32
For us to uphold the forfeiture of the amount representing the overpayment would be to revolt against the dictates of
justice and fairness. A contrary ruling would unjustly enrich the vendor to the prejudice of the vendee.
In the same vein, the provisions of Article 777 of the Civil Code notwithstanding, we hold that the surviving children of
awardee Luisa Gomez are not qualified transferees of Lot 4, Block 1 for failure to conform with the prerequisites set by
Resolution 16-A, to wit, Filipino citizenship and actual occupancy, which in the present case, are basic criteria for the
award of the lot, pursuant to the "Land for the Landless Program" of the City of Manila.
The records reveal that the children of Luisa Gomez are American citizens and permanent residents of the United
States of America. Notably, Resolution 16-A specifically enumerates Filipino citizenship and actual occupancy of the lot
for residential purposes, as qualifications for entitlement to the lot award. For this court to consider said surviving
children as qualified awardee-transferees would render illusory the purposes for which Resolution 16-A and the "Land
for the Landless Program" of the City of Manila were adopted.
Even assuming arguendo that the surviving children of Luisa Gomez are entitled to the lot by virtue of Article 777 of
the Civil Code, said heirs nevertheless abandoned their right when they violated the terms and conditions of the award
by donating the subject property to petitioner Vicente Gomez.
As paragraph (15) of the agreement provides that the heirs of the vendee shall be bound thereby, it is then incumbent
upon said heirs to render strict compliance with the provisions thereof.

In particular, paragraph (8) of the Contract proscribes the sale, transfer, mortgage, lease, alienation or encumbrance of
the lot, residential house, or improvement thereon, without the written consent of the City Mayor, within a period of
twenty (20) years from complete payment of the purchase price and execution of the final deed of sale. The execution
of the Deed of Donation by the surviving children of Luisa Gomez on February 1, 1989, in favor of Vicente Gomez, was
clearly within the prohibited period of 20 years from the full payment of the purchase price on January 18, 1980.
Without doubt, the prohibition applies to them.
Furthermore, the subject lot and residential house were occupied by, and leased to, third persons, in crystalline and
evident derogation of the terms of the award.
WHEREFORE, premises considered, the instant petition is DISMISSED for lack of merit, and the assailed decision of the
Court of Appeals with respect to the cancellation of the award of Lot 4, Block 1, is AFFIRMED SUBJECT TO
MODIFICATION as to the forfeiture of amounts paid by the vendee.
As modified, the City of Manila, is hereby ordered to refund with dispatch the amount of P8,244.00 representing the
overpayment made by petitioner plus interest. SO ORDERED.