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Sales (CASE DIGEST)

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CORONEL VS. CA
GOMEZ VS. CA
ROMERO VS. CA
VELARDE VS. CA
ACAP VS. CA
QUIJADA VS. CA
FULE VS. CA
POLYTECHNIC PHILS. VS. CA
GAITE VS. FONACIER
COMMISSIONER VS. ADMU
INCHAUSTI VS. CROMWELL
CELESTINO VS. COLLECTOR
COMMISSIONER VS. ENGINEERING EQUIPMENT
QUIROGA VS. PARSONS
GONZALO PUYAT VS. ARCO AMUSEMENT
PHILIPPINE LAWIN VS. CA
FILINVEST CREDIT VS CA

1. Coronel v. CA (GR 103577, 7 October 1996)


Third division, Melo (J): 3 concur, 1 took no part.
Facts: On 19 January 1985, Romulo Coronel, et al. executed a document entitled Receipt of Down Payment in favor
of Ramona Patricia Alcaraz for P50,000 downpayment of the total amount of P1.24M as purchase price for an
inherited house and lot (TCT 119627, Registry of Deeds of Quezon City), promising to execute a deed of absolute sale
of said property as soon as such has been transferred in their name. The balance of P1.19M is due upon the
execution of said deed. On the same date, Concepcion D. Alcaraz, mother of Ramona, paid the down payment of
P50,000.00. On 6 February 1985, the property originally registered in the name of the Coronels father was transferred
in their names (TCT 327043). However, on 18 February 1985, the Coronels sold the property to Catalina B. Mabanag
for P1,580,000.00 after the latter has paid P300,000.00. For this reason, Coronels canceled and rescinded the
contract with Alcaraz by depositing the down payment in the bank in trust for Alcaraz.
On 22 February 1985, Alcaraz filed a complaint for specific performance against the Coronels and caused the
annotation of a notice of lis pendens at the back of TCT 327403. On 2 April 1985, Mabanag caused the annotation of
a notice of adverse claim covering the same property with the Registry of Deeds of Quezon City. On 25 April 1985, the
Coronels executed a Deed of Absolute Sale over the subject property in favor of Mabanag. On 5 June 1985, a new
title over the subject property was issued in the name of Mabanag under TCT 351582.
In the course of the proceedings, the parties agreed to submit the case for decision solely on the basis of
documentary exhibits. Upon submission of their respective memoranda and the corresponding comment or reply
thereto, and on 1 March 1989, judgment was handed down in favor of the plaintiffs, ordering the defendant to execute
a deed of absolute sale of the land covered by TCT 327403 and canceling TCT 331582 and declaring the latter
without force and effect. Claims for damages by plaintiffs and counterclaims by the defendants and intervenors were
dismissed. A motion for reconsideration was thereafter filed, which was denied.
Petitioners interposed an appeal, but on 16 December 1991, the CA rendered its decision fully agreeing with the trial
court. Hence, the instant petition.
The Supreme Court dismissed the petition and affirmed the appealed judgment.
1. Receipt of downpayment a binding contract; Meeting of the minds
The document embodied the binding contract between Ramona Patricia Alcaraz and the heirs of Constancio P.
Coronel, pertaining to a particular house and lot covered by TCT 119627, as defined in Article 1305 of the Civil Code
of the Philippines.

2. Definition of contract of sale


The Civil Code defines a contract of sale, in Article 1458, as 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, thus, by its very nature a consensual contract because it is perfected by mere consent.
3. Elements of contract of sale; Contract to sell not contract of sale due to the lack of first element; Distinction
necessary
when property is sold to a third person
The essential elements of a contract of sale are (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. A
Contract to Sell may not be considered as a Contract of Sale because the first essential element is lacking. 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.
4. Contract to sell: Seller agrees to sell property when purchase price is delivered to him; seller reserves transfer of
title until fulfillment of suspensive condition (payment)
In a contract to sell, the prospective seller explicitly 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 taken to be the full payment of the purchase price. What
the seller agrees or obliges himself to do is to fulfill his 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.
5. Contract to sell: failure to deliver payment is not a breach but event preventing vendor to convey title; obligation
demandable upon full payment of price; promise binding if supported by payment distinct from the price
When a contract is 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 (Roque v. Lapuz). Upon the fulfillment of the suspensive condition which is the full payment of the purchase
price, the prospective sellers 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 (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 promisor if the promise is supported by a consideration
distinct from the price.
6. Contract to sell defined
A contract to sell 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 fulfilment of the condition agreed upon, that is, full payment of the
purchase price.
7. Contract to sell not a conditional contract of sale (existence of first element)
A contract to sell 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 fulfilment 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.

8. Conditional contract of sale: if suspensive condition not fulfilled, perfection abated; if fulfilled, contract of sale
perfected and ownership automatically transfers to buyer
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.
9. Contract to sell: if suspensive condition fulfilled, seller has still to convey title even if property is previously delivered
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.
10. Contract to sell: there is no double sale; if property sold to another, the seller may be sued for damages
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-sellers title per se, but the
latter, of course, may be sued for damages by the intending buyer.
11. Conditional contract of sale: sale becomes absolute upon fulfillment of condition; if property sold to another, first
buyer may seek reconveyance
In a conditional contract of sale, upon the fulfillment of the suspensive condition, the sale becomes absolute and this
will definitely affect the sellers title thereto. In fact, if there had been previous delivery of the subject property, the
sellers 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 sellers 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 buyers title. In case a title is issued to the second buyer, the first buyer may seek reconveyance of the
property subject of the sale.
12. Interpretation of contracts, natural and meaning of words unless technical meaning was intended
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]).
13. Document entitled Receipt of Down Payment indicates Conditional Contract of Sale and not contract to sell
The agreement could not have been a contract to sell because the sellers 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, 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 did not merely promise to sell the property 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. 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, 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 to their names. The
suspensive condition was fulfilled on 6 February 1985 and thus, the conditional contract
of sale between the parties 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.
14. Article 1475 and 1181 applies to present case; Perfection of a contract of sale and Conditional obligation based on
the happening of the event
Article 1475 of the New Civil Code provides that 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 that moment, the parties may
reciprocally demand performance, subject to the provisions of the law governing the form of contracts. Article 1181 of
the same code provides that 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. In the
present case, since the condition contemplated by the parties which is the issuance of a certificate of title in
petitioners names was fulfilled on 6 February 1985, the respective obligations of the parties under the contract of sale
became mutually demandable, i.e. the sellers were obliged to present the TCT already in their names to he 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.
15. Condition deemed fulfilled when obligor voluntary prevents its fulfillment; Condition fulfilled, such fact controlling
over hypothetical arguments
Article 1186 provides that the condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
Thus, in the present case, the petitioners having recognized that they entered into a contract of sale subject to a
suspensive condition, as evidenced in the first paragraph in page 9 of their petition, cannot now contend that there
could have been no perfected contract of sale had the petitioners not complied with the condition of first transferring
the title of the property under their names. It should be stressed and emphasized that the condition was fulfilled on 6
February 1985, when TCT 327403 was issued in petitioners name, and such fact is more controlling than mere
hypothetical arguments.
16. Retroactivity of conditional obligation to day of constitution of obligation
Article 1187 provides that 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 obligations to do or not to do, the courts shall determine, in each case,
the retroactive effect of the condition that has been complied with. In the present case, 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 6 February 1985. As of that point in time, reciprocal obligations of both
seller and buyer arose.
17. Succession as a mode of transferring ownership
Article 774 of the Civil Code defines Succession as a mode of transferring ownership, providing succession is a mode
of acquisition by virtue of which the property, rights and obligations to the 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. In the present case,
petitioners-sellers 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 instance of their fathers death, 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]).
18. Estoppel, as to lack of capacity
Article 1431 provides that 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. In the present case, the
petitioners, having represented themselves as the true owners of the subject property at the time of sale, cannot claim
now that they were not yet the absolute owners thereof at the time they entered into agreement.
19. Mere allegation is not evidence
The 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]).
20. No stipulation to authorize extrajudicial rescission of contract of sale
Even assuming arguendo that Ramona P. Alcaraz was in the United States of America on 6 February 1985,
petitioners-sellers act of unilaterally and extrajudicially rescinding the contract of sale cannot be justified as there was
no express stipulation authorizing the sellers to extrajudicially rescind the contract of sale. (cf Dignos vs. CA, 158
SCRA 375 [1988]; Taguba vs. Vda. de Leon, 132 SCRA 722 [1984])
21. Estoppel, acceptance of check from buyers mother; buyers absence not a ground for rescission
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, Ramonas 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
Concepcions 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.
22. Buyer not in default as there is no proof that seller presented the TCT and signify their readiness to execute the
deed of absolute sale
Article 1169 of the Civil Code defines when a party in a contract involving reciprocal obligations may be considered in
default. Said article provides that 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 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. In the present case,
there is no proof offered whatsoever to show that the seller 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. Ramonas 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.
23. Double sale; Article 1544, paragraph 2 applies in the present case

Article 1544 of the Civil Code provides that 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 the 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. In the present case, the record of the case shows that the Deed of Absolute
Sale dated 25 April 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 5 June 1985. Thus,
the second paragraph of Article 1544 shall apply.
24. Double sale presumes title to pass to first buyer, exceptions
Article 1544, the 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.
25. Prius tempore, potior jure (first in time, stronger in right); First to register in good faith
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 buyers 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). It was further held that it is essential, to merit the
protection of Article 1544, second paragraph, that the second realty buyer must act in good faith in registering his
deed of sale (Cruz v. Cabana, 129 SCRA 656, citing Carbonell vs. Court of Appeals, 69 SCRA 99, Crisostomo vs. CA,
G.R. No. 95843, 02 September 1992).
26. Double sale; good faith in recording of second sale, not in buying
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. In the present case, Mabanag could not have in good faith registered the sale entered into on
18 February 1985 because as early as 22 February 1985, a notice of lis pendens had been annotated on the TCT in
the names of petitioners, whereas Mabanag registered the said sale sometime in April 1985. At the time of
registration, therefore, petitioner knew that the same property had already been previously sold to Coronel, or, at least,
she was charged with knowledge that a previous buyer is claiming title to the same property. Mabanag thus cannot
close her eyes to the defect in petitioners title to the property at the time of the registration of the property.
27. Double sale; Bad faith in registration does not confer registrant any right
If a vendee in a double sale registers the 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 previous sale, the registration will
constitute a registration in bad faith and will not confer upon him any right. (Salvoro vs. Tanega, 87 SCRA 349
[1981];citing Palarca vs. Director of Land, 43 Phil. 146; Cagaoan vs. Cagaoan, 43 Phil. 554; Fernandez vs. Mercader,
43 Phil. 581.)
28. Agency; The issue whether Concepcion, mother of Ramona, is an agent or a co-buyer is undisturbed

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. The Court did not touch this issue and did not disturb the lower
courts ruling on this point.
2.

3. Romero v. CA (GR 107207, 23 November 1995)


Third division, Vitug (J): 4 concur
Facts: Virgilio R. Romero, a civil engineer, was engaged in the business of production, manufacture and exportation of
perlite filter aids, permalite insulation and process perlite ore. In 1988, Romero and his foreign partners decided to put
up a central warehouse in Metro Manila on a land area of approximately 2,000 sq. m. The project was made known to
several freelance real
estate brokers. A day or so after the announcement, Alfonso Flores and his wife, accompanied by a broker, offered a
parcel of land measuring 1,952 sq. m. Located in Barangay San Dionisio, Paraaque, Metro Manila, the lot was
covered by TCT 361402 in the name of Enriqueta Chua Vda. de Ongsiong. Romero visited the property and, except
for the presence of squatters in the area, he found the place suitable for a central warehouse. Later, the Flores
spouses called on Romero with a proposal that should he advance the amount of P50,000.00 which could be used in
taking up an ejectment case against the squatters, Ongsiong would agree to sell the property for only P800.00 per sq.
m. Romero expressed his concurrence. On 09 June 1988, a contract, denominated Deed of Conditional Sale, was
executed between Romero and Ongsiong. Flores, in behalf of Ongsiong, forthwith received and acknowledge a check
for P50,000.00 from Romero.
Pursuant to this agreement, Ongsiong filed a complaint for ejectment (Civil Case 7579) against Melchor Musa and 29
other squatter families with the MTC Paraaque. A few months later, or on 21 February 1989, judgment was rendered
ordering the
Page 5 of 87
defendants to vacate the premises. The decision was handed down beyond the 60-day period (expiring 09 August
1988) stipulated in the contract. The writ of execution of the judgment was issued, still later, on 30 March 1989.
In a letter, dated 07 April 1989, Ongsiong sought to return the P50,000.00 she received from Romero since, she said,
she could not get rid of the squatters on the lot. Atty. Sergio A.F. Apostol, counsel for Romero, refused the tender,
citing the favorable decision and the writ of execution issued pursuant thereto, and expressed Romeros willingness to
underwrite the expenses for the execution of the judgment and ejectment of the occupants chargeable to the purchase
price of the land.
Meanwhile, the Presidential Commission for the Urban Poor (PCUD), through its Regional Director for Luzon
(Viloria), asked the MTC Paraaque for a grace period of 45 days from 21 April 1989 within which to relocate and

transfer the squatter families. Acting favorably on the request, the court suspended the enforcement of the writ of
execution accordingly.
On 08 June 1989, Atty. Apostol reminded Ongsiong on the expiry of the 45-day grace period and reiterated his clients
willingness to underwrite the expenses for the execution of the judgment and ejectment of the occupants. On 19 June
1989, Atty. Joaquin Yuseco, Jr., counsel for Ongsion, advised Atty. Apostol that the Deed of Conditional Sale had been
rendered null and void by virtue of his clients failure to evict the squatters from the premises within the agreed 60-day
period. He added that private respondent had decided to retain the property.
Meanwhile, on 25 August 1989, the MTC issued an alias writ of execution in Civil Case 7579 on motion of Ongsiong
but the
squatters apparently still stayed on.
On 27 June 1989, Ongsiong prompted by Romeros continued refusal to accept the return of the P50,000.00 advance
payment, filed with the RTC Makati (Branch 133, Civil Case 89-4394) for a rescission of the deed of conditional sale,
plus damages, and for the consignation of P50,000.00 cash. On 26 June 1990, the RTC rendered decision holding
that Ongsiong had no right to rescind the contract since it was she who violated her obligation to eject the squatters
from the subject property and that Romero, being the injured party, was the party who could, under Article 1191 of the
Civil Code, rescind the agreement. The lower court, thus dismissed the complaint and ordered Ongsiong to eject or
cause the ejectment of the squatters from the property and to execute the absolute deed of conveyance upon
payment of the full purchase price by Romero.
Ongsiong appealed to the Court of Appeals. On 29 May 1992, the appellate court rendered its decision, reversed and
set aside the decision appealed from and entered another declaring he contract of conditional sale of 9 June 1988
cancelled and ordering Romero to accept the return of the downpayment in the amount of P50,000 deposited with the
trial court; without pronouncement as to cost. Failing to obtain a reconsideration, Romero filed his petition for review
on certiorari before the Supreme Court.
The Supreme Court reversed and set aside the questioned decision of the Court of Appeals, and entered another
ordering Romero to pay Ongsiong the balance of the purchase price and the latter to execute the deed of absolute
sale in favor of petitioner; without costs.
1. Perfected contract of sale, absolute or conditional
A perfected contract of sale may either be absolute or conditional depending on whether the agreement is devoid of,
or subject to, any condition imposed on the passing of title of the thing to be conveyed or on the obligation of party
thereto. When ownership is retained until the fulfillment of a positive condition the breach of the condition will simply
prevent the duty to convey title from acquiring an obligatory force. If the condition is imposed on an obligation of a
party which is not complied with, the other party may either refuse to proceed or waive said condition (Art. 1545, Civil
Code). Where, of course, the condition is imposed upon the perfection of the contract itself, the failure of such
condition would prevent the juridical relation itself from coming into existence.
2. Real character of a contract, substance more significant than title given to it by parties
In determining the real character of the contract, the title given to it by the parties is not as much as significant as its
substance. For example, a deed of sale, although denominated as a deed of conditional sale, may be treated as
absolute in nature, if title to the property sold is not reserved in the vendor or if the vendor is not granted the right to
unilaterally rescind the contract predicated on the fulfillment or non-fulfillment, as the case may be, of the prescribed
condition.
3. Condition in the context of a perfected contract of sale

The term condition in the context of a perfected contract of sale pertains, in reality, to the compliance by one party of
an undertaking the fulfillment of which would beckon, in turn, the demandability of the reciprocal prestation of the other
party. The reciprocal obligations referred to would normally be, in the case of vendee, the payment of the agreed
purchase price and,
Page 6 of 87
in the case of the vendor, the fulfillment of certain express warranties (which, in the present case is the timely eviction
of the squatters on the property).
4. Perfection of a sale; Parties bound to fulfill what is expressly stipulated and all consequences in keeping with good
faith, usage and law
A sale is at once perfected where a person (the seller) obligates himself, for a price certain, to deliver and to transfer
ownership of a specified thing or right to another (the buyer) over which the latter agrees. From the moment the
contract is perfected, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to
all the consequences which, according to their nature, may be in keeping with good faith, usage and law. In the
present cas, under the agreement, Ongsiong is obligated to evict the squatters on the property. The ejectment of the
squatters is a condition the operative act of which sets into motion the period of compliance by Romero of his own
obligation, i.e., to pay the balance of the purchase price.
5. Options available under Article 1545 belongs to injured party
Ongsiongs failure to remove the squatters from the property within the stipulated period gives Romero the right to
either refuse to proceed with the agreement or waive that condition in consonance with Article 1545 of the Civil Code.
This option clearly belongs to petitioner (Romero) and not to private respondent (Ongsiong).
In contracts of sale particularly, Article 1545 of the Civil Code allows the obligee to choose between proceeding with
the
agreement or waiving the performance of the condition. Evidently, Romero has waived the performance of the
condition imposed on Ongsiong to free the property from squatters.
6. Potestative condition is mixed, and not dependent on the sole will of the debtor; If condition is imposed on the
fulfillment of the obligation and not the birth thereof, only the condition is avoided and does not affect obligation itself
The undertaking required of private respondent does not constitute a potestative condition dependent solely on his
will that might, otherwise, be void in accordance with Article 1182 of the Civil Code but a mixed condition
dependent not on the will of the vendor alone but also of third persons like the squatters and government agencies
and personnel concerned. However, where the so-called potestative condition is imposed not on the birth of the
obligation but on its fulfillment, only the condition is avoided, leaving unaffected obligation itself.
7. Rescission by non-injured party not warranted; Article 1191
The right of resolution of a party to an obligation under Article 1191 of the Civil Code is predicated on a breach of faith
by the other party violates the reciprocity between them. In the present case, Ongsiongs action for rescission was not
warranted as she was not the injured party. It was Ongsiong who has failed in her obligation under the contract.
Romero did not breach the agreement. He has agreed, in fact, to shoulder the expenses of the execution of the
judgment in the ejectment case and to make arrangement with the sheriff to effect such execution. Parenthetically, this
offer to pay, hiring been made prior to the demand for rescission, assuming for the sake of argument that such a
demand is proper under Article 1592 of the Civil Code, would likewise suffice to defeat Ongsiongs prerogative to
rescind thereunder.
8. Petitioner, opting to proceed with sale, may not demand the reimbursement of the advance payment

When petitioner having opted to proceed with the sale, neither may petitioner demand its reimbursement from private
respondent. Further, private respondent may not subject it to forfeiture.