SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
I. DEFINITION AND ESSENTIAL REQUISITES
OF A CONTRACT OF SALE
A. DEFINITION
ANG YU ASUNCION, ARTHUR GO AND KEH TIONG vs.THE HON.
COURT OF APPEALS and BUEN REALTY DEVELOPMENT
CORPORATION
G.R. No. 109125 December 2, 1994
FACTS
A Second Amended Complaint for Specific Performance was
filed by Ang Yu Asuncion and Keh Tiong, et al., against Bobby Cu
Unjieng, Rose Cu Unjieng and Jose Tan (petitioners) before the
RTC-Manila. The latter allege that they are tenants or petitioners
of residential and commercial spaces owned by defendants in
Binondo; that they have occupied said spaces since 1935 and have
been religiously paying the rental and complying with all the
conditions of the lease contract. Sometime in 1986, the Cu
Unjiengs informed the petitioners that they are offering to sell the
premises, giving them priority to acquire the same. Bobby Cu
Unjieng offered a price of P6M while the petitioners made a
counter offer of P5M. Therafter, they asked the Cu Unjiengs to put
their offer in writing to which request defendants acceded. In in
reply to Cu Unjieng's letter, they wrote them asking that they
specify the terms and conditions of the offer to sell but they did
not receive any reply so they wrote another letter. Then, the they
filed a complaint to compel the Cu Unjiengs to sell the property to
them after the latter failed to specify the terms and conditions of
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the offer to sell and because of information received that the Cu
Unjiengs were about to sell the property to another.
Cu Unjiengs denied the material allegations of the complaint and
interposed a special defense of lack of cause of action. After the
issues were joined, defendants filed a motion for summary
judgment which was granted by the lower court.
RTC: The offer to sell was never accepted by the petitioners for
the reason that the parties did not agree upon the terms and
conditions of the proposed sale, hence, there was no contract of
sale at all. Nonetheless, should the Cu Unjiengs subsequently offer
their property for sale at a price of P11-million or below,
petitioners will have the right of first refusal.
The petitioners appealed to the CA.
CA: (affirmed with modification) There was no meeting of the
minds between the parties concerning the sale of the property so
the claim for specific performance will not lie.Modification:
granted the right of first refusal in the event the property is sold
for a price in excess of 11M.
CA’s decision was brought to SC via petition for certiorari. SC
denied the appeal for insufficiency in form and substances.
While the case before the SC was pending consideration, the
spouses Cu Unjieng sold the property to Buen Realty and
Development Corporation for P15M. As a consequence of the
sale, the title in the name of the spouses Cu Unjieng was cancelled
and, in lieu thereof, a new title was issued in the name of
defendant. Then, the defendant wrote to the petitioners
demanding for their vacation of the property. The petitioners

wrote a reply to petitioner stating that petitioner brought the
property subject to the notice of lis pendens regarding civil case
before the SC annotated on the Cu Unjiengs title.
Thereafter, the petitioners filed a Motion for Execution of the
RTC’s decision as modified by CA. The RTC Judge ordered the
defendants to execute the necessesary Deed of Sale in favor of the
petitioners for P15M in recognition of the plaintiffs right of first
refusal. In another order, the judge ordered the RD to cancel and
set aside the title already issued in favor of Buen Realty
Corporation and to register the new title in favor of the
petitioners.
On appeal, the order of the RTC was set aside and declared
without force and effect. Hence, this petition for review on
certiorari.
ISSUES: 1. WON the right of first refusal is a perfected contract of
sale.
2. WON the contract of option is a contract of sale.
HELD
1. The right of first refusal is not a perfected contract of
sale.
1 Solemn contract- a contract wherein a compliance with certain formalities prescribed
Kinds of Contract
Consensual- perfected upon a mere meeting of minds, i.e., the concurrence of offer
and acceptance, on the object and on the cause thereof.
Real Contract- A contract which requires, in addition to the above, the delivery of the
object of the agreement, as in a pledge or commodatum.
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ATTY. Irvin Fabella
Among the sources of an obligation is a contract1 (Art. 1157, Civil
Code), which 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 (Art. 1305, Civil Code). A contract
undergoes various stages that include its negotiation or
preparation, its perfection and, finally, its consummation.
Negotiation covers the period from the time the prospective
contracting parties indicate interest in the contract to the time the
contract is concluded (perfected). Consummation begins when
the parties perform their respective undertakings under the
contract culminating in the extinguishment thereof. Until the
contract is perfected, it cannot, as an independent source of
obligation, serve as a binding juridical relation.
In sales, the contract is perfected when a person, called the seller,
obligates himself, for a price certain, to deliver and to transfer
ownership of a thing or right to another, called the buyer, over
which the latter agrees (Article 1458).
In a conditional sale, like a "Contract to Sell” where invariably
the ownership of the thing sold is retained until the fulfillment of
a positive suspensive condition (normally, the full payment of the
purchase price), the breach of the condition will prevent the
obligation to convey title from acquiring an obligatory force. If the
condition is not fulfilled, the other party may either waive the
condition or refuse to proceed with the sale (Art. 1545, Civil
Code).
by law, such as in a donation of real property, is essential in order to make the act valid.

In the law on sales, the "right of first refusal" cannot be deemed
a perfected contract of sale under Article 1458 of the Civil Code.
Neither can the right of first refusal, understood in its normal
concept, per se be brought within the purview of an option under
the second paragraph of Article 14792 or possibly of an offer
under Article 1319. An option or an offer would require, among
other things, a clear certainty on both the object and the cause or
consideration of the envisioned contract. In a right of first refusal,
while the object might be made determinate, the exercise of the
right, however, would be dependent not only on the grantor's
eventual intention to enter into a binding juridical relation with
another but also on terms, including the price, that obviously are
yet to be later firmed up. Prior thereto, it can at best be so
described as merely belonging to a class of preparatory juridical
relations governed by the provisions of the Civil Code on human
conduct.
Even on the premise that such right of first refusal has been
decreed under a final judgment, like here, its breach cannot justify
correspondingly an issuance of a writ of execution under a
judgment that merely recognizes its existence, nor would it
sanction an action for specific performance without thereby
negating the indispensable element of consensuality in the
perfection of contracts. It is not to say, however, that the right of
first refusal would be inconsequential for, such as already
intimated above, an unjustified disregard thereof, given, for
instance, the circumstances expressed in Article 19 of the Civil
Code, can warrant a recovery for damages.
2 An accepted unilateral promise to buy or to sell a determinate
Article 1479. A promise to buy and sell a determinate thing for a price
certain is reciprocally demandable.
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
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ATTY. Irvin Fabella
The RTC and CA’s final judgment has merely accorded a "right of
first refusal" in favor of petitioners. The consequence of such a
declaration entails no more than what has heretofore been said.
In fine, if the petitioners are aggrieved by the failure of private
respondents to honor the right of first refusal, the remedy is not a
writ of execution on the judgment, since there is none to execute,
but an action for damages in a proper forum for the purpose.
Furthermore, whether private respondent Buen Realty
Development Corporation, the alleged purchaser of the property,
has acted in good faith or bad faith and whether or not it should,
in any case, be considered bound to respect the registration of
the lis pendens in the title are matters that must be independently
addressed in appropriate proceedings.
2. The contract of option is not a contract of sale
An unconditional mutual promise to buy and sell, as long as the
object is made determinate and the price is fixed, can be
obligatory on the parties, and compliance therewith may
accordingly be exacted. An accepted unilateral
promise which specifies the thing to be sold and the price to
be paid, when coupled with a valuable consideration
distinct and separate from the price, is a perfected contract
of option.
thing for a price certain is binding upon the promisor if the promise is
supported by a consideration distinct from the price.

However, the option is not the contract of sale itself. The optionee
has the right, but not the obligation, to buy. Once the option is
exercised timely, i.e., the offer is accepted before a breach of the
option, a bilateral promise to sell and to buy ensues and both
parties are then reciprocally bound to comply with their
respective undertakings.
A negotiation is formally initiated by an offer. An imperfect
promise (policitacion) is merely an offer. Public advertisements or
solicitations and the like are ordinarily construed as mere
invitations to make offers or only as proposals. These relations,
until a contract is perfected, are not considered binding
commitments. Thus, at any time prior to the perfection of the
contract, either negotiating party may stop the negotiation. The
offer, at this stage, may be withdrawn; the withdrawal is effective
immediately after its manifestation, such as by its mailing and not
necessarily when the offeree learns of the withdrawal.
Rules when a period is given to the offeree within which to
accept the offer.
(1) If the period is not itself founded upon or supported by a
consideration, the offeror is still free and has the right to
withdraw the offer before its acceptance, or, if an acceptance has
been made, before the offeror's coming to know of such fact, by
communicating that withdrawal to the offeree. The right to
withdraw, however, must not be exercised whimsically or
arbitrarily; otherwise, it could give rise to a damage claim under
Article 19.
(2) If the period has a separate consideration, a contract of
"option" is deemed perfected, and it would be a breach of that
contract to withdraw the offer during the agreed period. The
option, however, is an independent contract by itself, and it is to
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
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ATTY. Irvin Fabella
be distinguished from the projected main agreement (subject
matter of the option) which is obviously yet to be concluded. If, in
fact, the optioner-offeror withdraws the offer before its
acceptance (exercise of the option) by the optionee-offeree, the
latter may not sue for specific performance on the proposed
contract ("object" of the option) since it has failed to reach its own
stage of perfection. The optioner-offeror, however, renders
himself liable for damages for breach of the option.
SKUNAC CORPORATION and ALFONSO F. ENRIQUEZ
vs.ROBERTO S. SYLIANTENG and CAESAR S. SYLIANTENG
G.R. No. 205879 April 23, 2014
FACTS
Appellants base their claim of ownership over the 2 subject lots,
found in Block 2 of the Pujalte Subdivision in San Juan City and
previously registered in the name of Luis A. Pujalte, on Deed of
Absolute Sale executed in their favor by their mother,
Emerenciana Sylianteng on June 27, 1983. Appellants further
allege that Emerenciana acquired the lots from the late Luis
Pujalte through a Deed of Sale dated June 20, 1958 as reflected in
Entry No. P.E. 4023, annotated on the covering TCT. Then, when
she sold the lots to appellants, a new title was issued in their
names.
Petitioners on the other hand, claim that a certain Romeo Pujalte
who was declared by the RTC in as the sole heir of Luis Pujalte,
caused the reconstitution of the Mother Title resulting to its
cancellation and the issuance of TCT in his favor. Romeo Pujalte

then allegedly sold the lots to Skunac and Enriquez in 1992. The
title to Lot 1 was issued in the name of Skunac, while the title for
Lot 2 was issued in the name of Enriquez.
Appelants contend that they have a better right to the lots in
question because the transactions conveying the same to them
preceded those claimed by petitioners as source of the latter's
titles. Respondents further assert that petitioners could not be
considered as innocent purchasers in good faith and for value
because they had prior notice of the previous transactions as
stated in the memorandum of encumbrances annotated on the
titles covering the subject lots.
The RTC ruled in favor of the petitioners. Herein respondents then
filed an appeal with the CA.The CA reversed and set aside the RTC
and upheld the TCT in the name of the respondents. Petitioners
filed a MR, but the CA denied it. Hence, the instant petition
ISSUES
1. WON there is a double sale.
2. WON Emerenciana's acquisition of the subject lots from Luis
and her subsequent sale of the same to respondents are valid and
lawful
HELD
At the outset, the Court observes that the main issues raised in the
instant petition are essentially questions of fact. It is settled that,
as a rule, in petitions for review on certiorari under Rule 45 of the
Rules of Court, only questions of law may be put in issue.
Questions of fact cannot be entertained. There are, however,
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ATTY. Irvin Fabella
recognized exceptions to this rule like when the CA’s findings are
contrary to those by the trial court, as in this case.
1. There’s no double sale. Reliance by the trial and appellate
courts on Article 1544 of the Civil Code is misplaced. The
requisites that must concur for Article 1544 to apply are:
(a) The two (or more sales) transactions must constitute
valid sales;
(b) The two (or more) sales transactions must pertain to
exactly the same subject matter;
(c) The two (or more) buyers at odds over the rightful
ownership of the subject matter must each represent
conflicting interests; and
(d) The two (or more) buyers at odds over the rightful
ownership of the subject matter must each have bought
from the very same seller.
Obviously, said provision has no application in cases where the
sales involved were initiated not by just one but two vendors. In
the present case, the subject lots were sold to petitioners and
respondents by two different vendors – Emerenciana and Romeo
Pujalte (Romeo). Hence, Article 1544 of the Civil Code is not
applicable.
2. Emerenciana's acquisition of the subject lots from Luis and
her subsequent sale of the same to respondents are valid and
lawful. Petitioners dispute such finding. To prove their
contention, they assail the authenticity and due execution of the
deed of sale between Luis and Emerenciana.
Petitioners’ contentions (you can skip this- technicalities)

a. The respondents' presentation of the "duplicate/carbon"
original of the Deed of Sale is in violation of the best
evidence rule under Section 3, Rule 130 of the Rules of
Court. –the best evidence rule is inapplicable to the
present case. The said rule applies only when the content
of such document is the subject of the inquiry, which is not
a matter in this case. It is settled that a signed carbon copy
or duplicate of a document executed at the same time as
the original is known as a duplicate original and maybe
introduced in evidence without accounting for the non-
production of the originalIn addition, evidence of the
authenticity and due execution of the subject deed is the
fact that it was notarized.
b. The deed of sale between Emerenciana and Luis was not
registered with the RD of Quezon City. The said deed was,
in fact, registered as evidenced by official receipts issued
to this effect. Petitioners, again, did not present any
evidence to assail the authenticity of these documents.
c. The deed of sale is not authentic because only one copy of
such deed was prepared as only one document number was
assigned by the notary to the said deed. Section 246, Article
V, Title IV, Chapter II of the Revised Administrative Code
provides that "[t]he notary shall give to each instrument
executed, sworn to, or acknowledged before him a
number corresponding to the one in his register, and shall
also state on the instrument the page or pages of his
register on which the same is recorded." In this regard, the
"instrument" being referred to in the abovequoted
provision is the deed or contract which is notarized. It
does not pertain to the number of copies of such deed or
contract. Hence, one number is assigned to a deed or
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
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ATTY. Irvin Fabella
contract regardless of the number of copies prepared and
notarized.
d. The copy of the deed of sale presented by respondents in
evidence is of dubious origin because it does not bear the
stamp "RECEIVED" by the RD-QC. Court finds no cogent
reason to disagree with respondents' contention that the
duplicate original of the subject deed of sale which they
presented as evidence in court could not have been
received by the RD-QC because only the original copy, and
not the duplicate original, was submitted to the Register
of Deeds for registration.
The parties stipulate that the machine copy of the TCT in the
name of Luis, for respondents, is a faithful reproduction of the
original copy of the said title, including the memorandum of
encumbrances annotated therein. Included in the memorandum
of encumbrances is Entry No. P.E. 4023, which states that title for
the Lot 1 and 2 is already sold to Emerenciana.
Nonetheless, petitioners still insist that they have valid title over
the subject properties. They trace their respective titles from that
of Romeo. Evidence, however, shows that Romeo never became
the owner of the subject properties for two reasons.
First, the disputed lots were already sold by Luis during his
lifetime. Thus, these parcels of land no longer formed part of his
estate when he died. As early as 1960, prior to Romeo's
appointment as administrator of the estate of Luis, Paz L. Vda. de
Pujalte, the mother of Luis, who was then appointed
administratrix of the estate of the latter, in her Inventory and
Appraisal which was submitted to the estate court, already
excluded the subject properties among those which comprise the
estate of Luis. Subsequently, in the Project of Partition of the

residual estate of Luis, Paz again did not include the disputed lots
as part of such residual estate.
Second, even granting that the subject lots formed part of the
estate of Luis, it was subsequently proven in a separate criminal
case that Romeo is not his heir. In the said criminal case, his birth
certificate and the marriage certificate of his supposed parents,
which he presented before the estate court, to prove his claim that
he is the sole heir of Luis, were found by the criminal court to be
falsified. It goes without saying that the documents purportedly
conveying the lots in question to appellees and which are founded
on Romeo Pujalte's alleged rights over the estate of the late Luis
Pujalte do not deserve any consideration at all. Indeed, not being
an heir of Luis, Romeo never acquired any right whatsoever
over the subject lots, even if he was able to subsequently
obtain a title in his name. Since Romeo has no right to the
subject lots, petitioners, who simply stepped into the shoes of
Romeo, in turn, acquired no rights to the same.
Granting that both petitioners and respondents bought the
disputed lots in good faith by simply relying on the certificates of
the sellers, and subsequently, acquiring titles in their own names,
respondents' title shall still prevail. It is a settled rule that when
two certificates of title are issued to different persons covering the
same land in whole or in part, the earlier in date must prevail, and,
in case of successive registrations where more than one certificate
is issued over the land, the person holding a prior certificate is
entitled to the land as against a person who relies on a subsequent
certificate. The titles of respondents, having emanated from an
older title, should thus be upheld.
It is true that a person dealing with registered land need not go
beyond the title. However, it is equally true that such person is
charged with notice of the burdens and claims which are
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ATTY. Irvin Fabella
annotated on the title. In the instant case, the TCT in the name of
Romeo, which was the title relied upon by petitioners, also
contained Entry No. P.E. 4023. This entry should have alerted
petitioners and should have prodded them to conduct further
investigation. Simple prudence would have impelled them as
honest persons to make deeper inquiries to clear the
suspiciousness haunting Romeo's title.
HEIRS OR REYNALDO DELA ROSA, Namely: TEOFISTA DELA
ROSA, JOSEPHINE SANTIAGO AND JOSEPH DELA ROSA vs.
MARIO A. BA TONGBACAL, IRENEO BATONGBACAL, JOCELYN
BA TONGBACAL, NESTOR BATONGBACAL AND LOURDES BA
TONGBACAL
G.R. No. 179205 July 30, 2014
FACTS
The subject properties are located in Marilao Bulacan and
registered under TCT No. T-107449 under the names of
Reynaldo, Eduardo Araceli, and Zenaida Dela Rosa
Sometime in 1984, Reynaldo offered to sell the subject property
to Guillermo Batongbacal and Mario Batongbacal for ₱50 per sq.m
or for a total of ₱187,500. Pursuant to the agreement, Reynaldo
received an advance payment of ₱31,500, leaving a balance of
₱156,000. As shown in the document denominated as Resibo and
signed by Reynaldo, the parties agreed that the amount of ₱20K
as part of the advance payment shall be paid upon the delivery of
the SPA which would authorize Reynaldo to alienate the subject
property on behalf of his co-owners and siblings namely, Eduardo,

Araceli and Zenaida. The balance thereon shall be paid in ₱10K
monthly installments until the purchase price is fully settled.
Subsequent to the execution of the said agreement, The
Batongbacals, on their own instance, initiated a survey to
segregate the area of 3,750 square meters from the whole area
covered by the title, delineating the boundaries of the subdivided
parts. The Batongbacals thereafter made several demands from
Reynaldo to deliver the SP A as agreed upon, but such demands all
went unheeded.
Consequently, Guillermo and Mario initiated an action for Specific
Performance or Rescission and Damages before the RTC
seeking to enforce their Contract to Sell. The Batongbacals
asserted that they have a better right over the subject property
and alleged that the subsequent sale thereof effected by Reynaldo
to third persons is void as it was done in bad faith. It was prayed
in the Complaint that Reynaldo be directed to deliver the SPA and,
in case of its impossibility, to return the amount of ₱31,500 with
legal interest and with damages in either case. In addition, to
protect their rights on the subject property, The Batongbacals,
after initiating the civil case, filed a Notice of Lis Pendens
registering their claim on the certificate of title covering the entire
property.
In refuting the allegations of the Batongbacals in their Complaint.
Reynaldo in his Answer countered that the purported Contract to
Sell is void, because he never gave his consent thereto. Reynaldo
insisted that he was made to understand that the contract
between him and the Batongbacals was merely an equitable
mortgage whereby it was agreed that the latter will loan to him
the amount of ₱3 l ,500 payable once he receives his share in the
proceeds of the sale of the land.
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RTC: dismissed the civil case and ordered Reynaldo to return to
the former the sum of ₱28K with 12% annual interest. It was held
by the trial court, however, that the supposed Contract to Sell
denominated as Resibo is unenforceable because Reynaldo
cannot bind his co-owners into such contract without an SPA
authorizing him to do so.
CA: set aside the claim of equitable mortgage and held that the
sale effected by Reynaldo of his undivided share in the property is
valid and enforceable.. The Batongbacals could have validly
demanded from Reynaldo to deliver the subject property
pursuant to the Contract to Sell but such option is no longer
feasible because the entire property has already been sold to third
persons to whom a new title was issued.
In seeking modification of the appellate court's decision,
Batongbacals pointed out that the title of the subject property has
not yet been transferred to third persons, and thus, Reynaldo can
still be compelled to execute a deed of conveyance over his
undivided share of the entire property.
The CA granted the Batongbacal’s MR and directed Reynaldo to
convey the subject property to them.
Then, the CA was notified of the death of Reynaldo, and his heirs
sought to be substituted as party in this case. Petitioners Heirs of
Reynaldo are now before this Court via this instant Petition for
Review on Certiorari.
ISSUE: WON contract entered into by parties was a Contract to
Sell or an equitable mortgage.

HELD
It is a Contract to Sell.
The petitioners, to prove that the disputed contract was an
equitable mortgage, asserted that the consideration of ₱187,500
for a property consisting of 15,001 square meters is grossly
inadequate because the land valuation in Barrio Saog, Marilao,
Bulacan, at the time the transaction was entered into by the
parties in 1984, was already ₱80 to ₱100 per square meter.
An equitable mortgage is defined as one although lacking in
some formality, or form or words, or other requisites demanded
by a statute, nevertheless reveals the intention of the parties to
charge real property as security for a debt, and contains nothing
impossible or contrary to law. For the presumption of an equitable
mortgage to arise, two requisites must concur: (1) that the parties
entered into a contract denominated as a sale; and (2) the
intention was to secure an existing debt by way of mortgage.
Under Article 1602 of NCC, a contract of sale shall be presumed to
be an equitable mortgage when the price of a sale with right to
repurchase is unusually inadequate.
A perusal of the contract denominated as Resibo reveals the utter
frailty of petitioners' position because nothing therein suggests,
even remotely, that the subject property was given to secure a
monetary obligation. On the contrary, the document clearly
indicates the intent of Reynaldo to sell his share in the property.
The primary consideration in determining the true nature of
a contract is the intention of the parties. If the words of a
contract appear to contravene the evident intention of the parties,
the latter shall prevail. Such intention is determined not only
from the express terms of their agreement, but also from the
contemporaneous and subsequent acts of the parties. That the
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parties intended some other acts or contracts apart from the
express terms of the agreement, was not proven by Reynaldo
during the trial or by his heirs herein. Beyond their bare and
uncorroborated asseverations that the contract failed to express
the true intention of the parties, the record is bereft of any
evidence indicative that there was an equitable mortgage.
Neither could the allegation of gross inadequacy of the price carry
the day for the petitioners. It must be underscored at this point
that the subject of the Contract to Sell was limited only to '14 pro-
indiviso share of Reynaldo consisting an area of 3,750 square
meter and not the entire 15,001-square meter parcel of land. As a
co-owner of the subject property, Reynaldo has the right to sell,
assign or mortgage his proindiviso share in the co-owned
property as part of his right of dominion even without the consent
of his co-owners.
In view of the nature of co-ownership, the CA correctly ruled that
the terms in the Contract to Sell, which limited the subject to
Reynaldo's ideal share in the property held in common is perfectly
valid and binding. In fact, no authority from the other co-owners
is necessary for such disposition to be valid as he is afforded by
the law full ownership of his part and of the fruits and benefits
pertaining thereto.
SALES: A contract of sale is a consensual contract, which
becomes valid and binding upon the meeting of minds of the
parties on the price and the object of the sale. The mere
inadequacy of the price does not affect its validity when both
parties are in a position to form an independent judgment
concerning the transaction, unless fraud, mistake or undue
influence indicative of a defect in consent is present. A contract
may consequently be annulled on the ground of vitiated consent
and not due to the inadequacy of the price. In the case at bar,

however, no evidence to prove fraud, mistake or undue influence
indicative of vitiated consent is attendant.
As the parties invoking equitable mortgage, the Heirs of Reynaldo
did not even come close to proving that the parties intended to
charge the property as security for a debt, leaving us with no other
choice but to uphold the stipulations in the contract. Basic is the
rule that if the terms of the contract are clear and leave no doubt
upon the intention of the parties, the literal meaning of its
stipulations shall control. The CA Appeals cannot be faulted for
ruling, in modification of its original judgment, that the sale
effected by Reynaldo of his undivided share in the property is
valid and enforceable.
CABRERA VS ISAAC.
G.R. No. 166790. November 19, 2014
A contract to sell is "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
FACTS:
Heirs of Luis and Matilde Ysaac co-owned a 5,517-square-meter
parcel of land located in Sabang, Naga City.One of the co-owners
is respondent, Henry Ysaac. Henry Ysaac leased out portions of the
property to several lessees. Juan Cabrera, one of the lessees,
leased a 95-square-meter portion of the land.
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
Henry Ysaac needed money and offered to sell the 95-square-
meter piece of land to Juan Cabrera. He told Henry Ysaac that the
land was too small for his needs because there was no parking
space for his vehicle.In order to address Juan Cabrera’s concerns,
Henry Ysaac expanded his offer to include the two adjoining lands
that Henry Ysaac was then leasing to the Borbe family and the
Espiritu family. Those three parcels of land have a combined area
of 439-square-meters. However, Henry Ysaac warned Juan
Cabrera that the sale for those two parcels could only proceed if
the two families agree to it.
Juan Cabrera accepted the new offer. Henry Ysaac and Juan
Cabrera settled on the price of ₱250.00 per square meter, but Juan
Cabrera stated that he could only pay in full after his retirement.
Henry Ysaac agreed but demanded for an initial payment of
₱1,500.00, which Juan Cabrera paid.
According to Juan Cabrera, Henry Ysaac informed him that the
Borbe family and the Espiritu family were no longer interested in
purchasing the properties they were leasing. Since Mamerta
Espiritu of the Espiritu family initially considered purchasing the
property and had made an initial deposit for it, Juan Cabrera
agreed to reimburse this earlier payment. Juan Cabrera paid the
amount of ₱6,100.00. Henry Ysaac issued a receipt for this
amount. ₱3,100.00 of the amount paid was reimbursed to
Mamerta Espiritu and, in turn, she gave Juan Cabrera the receipts
issued to her by Henry Ysaac.
Juan Cabrera tried to pay the balance of the purchase price to
Henry Ysaac. However,at that time, Henry Ysaac was in the United
States. The only person in Henry Ysaac’s residence was his wife.
The wife refused to accept Juan Cabrera’s payment.

Sometime Juan Cabrera alleged that Henry Ysaac approached him,
requesting to reduce the area of the land subject of their
transaction. Part of the 439-square-meter land was going to be
made into a barangay walkway, and another part was being
occupied by a family that was difficult to eject.Juan Cabrera agreed
to the proposal. The land was surveyed again. According to Juan
Cabrera, Henry Ysaac agreed to shoulder the costs of the resurvey,
which Juan Cabrera advanced in the amount of ₱3,000.00.
The resurvey shows that the area now covered by the transaction
was 321 square meters. Juan Cabrera intended to show the sketch
plan and pay the amount due for the payment of the lot. However,
on that day, Henry Ysaac was in Manila. Once more, Henry Ysaac’s
wife refused to receive the payment because of lack of authority
from her husband.
Henry Ysaac’s counsel, Atty. Luis Ruben General, wrote a letter
addressed to Atty. Leoncio Clemente, Juan Cabrera’s counsel. Atty.
General informed Atty. Clemente that his client is formally
rescinding the contract of sale because Juan Cabrera failed to pay
the balance of the purchase price of the land. The letter also stated
that Juan Cabrera’s initial payment of ₱1,500.00 and the
subsequent payment of ₱6,100.00 were going to be applied as
payment for overdue rent of the parcel of land Juan Cabrera was
leasing from Henry Ysaac. The letter also denied the allegation of
Juan Cabrera that Henry Ysaac agreed to shoulder the costs of the
resurveying of the property.Juan Cabrera, together with his uncle,
Delfin Cabrera, went to Henry Ysaac’s house to settle the
matter.Henry Ysaac told Juan Cabrera that he could no longer sell
the property because the new administrator of the property was
his brother, Franklin Ysaac.
Due to Juan Cabrera’s inability to enforce the contract of sale
between him and Henry Ysaac, he decided to file a civil case for
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
specific performance. Juan Cabrera prayed for the execution of a
formal deed of sale and for the transfer of the title of the property
in his name.He tendered the sum of ₱69,650.00 to the clerk of
court as payment of the remaining balance of the original sale
price. Henry Ysaac prayed for the dismissal of Juan Cabrera’s
complaint. He also prayed for compensation in the form of moral
damages, attorney’s fees, and incidental litigation expenses.
Before the Regional Trial Court decided the case, the heirs of Luis
and Matilde Ysaac, under the administration of Franklin Ysaac,
sold their property to the local government of Naga City on
February 12, 1997.The property was turned into a project for the
urban poor of the city.
During the trial, Corazon Borbe Combe of the Borbe family
testified that contrary to what Juan Cabrera claimed, her family
never agreed to sell the land they were formerly leasing from
Henry Ysaac in favor of Juan Cabrera. The Borbe family bought the
property from Naga City’s urban poor program after the sale
between the Ysaacs and the local government of Naga City.
The Regional Trial Court of Naga City ruled that the contract of
sale between Juan Cabrera and Henry Ysaac was duly rescinded
when the former failed to pay the balance of the purchase price in
the period agreed upon. The Regional Trial Court found that there
was an agreement between Juan Cabrera and Henry Ysaac as to
the sale of land and the corresponding unit price. However, aside
from the receipts turned over by Mamerta Espiritu of the Espiritu
family to Juan Cabrera, there was no "evidence that the other
adjoining lot occupants agreed to sell their respective
landholdings" to Juan Cabrera.
The Court of Appeals agreed with the Regional Trial Court that
there was a perfected contract of sale between Juan Cabrera and

Henry Ysaac. According to the Court of Appeals, even if the subject
of the sale is part of Henry Ysaac’s undivided property, a co-owner
may sell a definite portion of the property.
ISSUE:
Whether or not there was a valid contract of sale
HELD:
There was no valid contract of sale
As defined by the Civil Code, "[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."For there
to be a valid contract, there must be consent of the contracting
parties, an object certain which is the subject matter of the
contract, and cause of the obligation which is established. Sale is a
special contract. The seller obligates himself to deliver a
determinate thing and to transfer its ownership to the buyer. In
turn, the buyer pays for a price certain in money or its equivalent.
A "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." The seller and buyer must agree as to the certain
thing that will be subject of the sale as well as the price in which
the thing will be sold. The thing to be sold is the object of the
contract, while the price is the cause or consideration.
The object of a valid sales contract must be owned by the seller. If
the seller is not the owner, the seller must be authorized by the
owner to sell the object.
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
Specific rules attach when the seller co-owns the object of the
contract. Sale of a portion of the property is considered an
alteration of the thing owned in common. Under the Civil Code,
such disposition requires the unanimous consent of the other co-
owners. However, the rules also allow a co-owner to alienate his
or her part in the co-ownership.
These two rules are reconciled through jurisprudence.
If the alienation precedes the partition, the co-owner cannot sell a
definite portion of the land without consent from his or her co-
owners. He or she could only sell the undivided interest of the co-
owned property. As summarized in Lopez v. Ilustre, "[i]f he is the
owner of an undivided half of a tract of land, he has a right to sell
and convey an undivided half, but he has no right to divide the lot
into two parts, and convey the whole of one part by metes and
bounds."
The undivided interestof a co-owner is also referred to as the
"ideal or abstract quota" or "proportionate share." On the other
hand, the definite portion of the land refers to specific metes and
bounds of a co-owned property.
To illustrate, if a ten-hectare property is owned equally by ten
coowners, the undivided interest of a co-owner is one hectare. The
definite portion of that interest is usually determined during
judicial or extrajudicial partition. After partition, a definite
portion of the property held in common is allocated to a specific
co-owner. The co-ownership is dissolved and, in effect, each of the
former co-owners is free to exercise autonomously the rights
attached to his or her ownership over the definite portion of the
land. It is crucial that the co-owners agree to which portion of the
land goes to whom.

Hence, prior to partition, a sale of a definite portion of common
property requires the consent of all co-owners because it operates
to partition the land with respect to the co-owner selling his or her
share. The co-owner or seller is already marking which portion
should redound to his or her autonomous ownership upon future
partition.
At best, the agreement between petitioner and respondent is a
contract to sell, not a contract of sale. A contract to sell is a promise
to sell an object, subject to suspensive conditions. Without the
fulfillment of these suspensive conditions, the sale does not
operate to determine the obligation of the seller to deliver the
object.
A co-owner could enter into a contract to sell a definite portion of
the property. However, such contract is still subject to the
suspensive condition of the partition of the property, and that the
other co-owners agree that the part subject of the contract to sell
vests in favor of the co-owner’s buyer. Hence, the co-owners’
consent is an important factor for the sale to ripen.
II. CONTRACT OF CONDITIONAL SALE
ARTICLE 1458
DELFIN TAN, vs.ERLINDA C. BENOLIRAO, ANDREW C.
BENOLIRAO, ROMANO C. BENOLIRAO, DION C. BENOLIRAO,
SPS. REYNALDO TANINGCO and NORMA D. BENOLIRAO,
EVELYN T. MONREAL, and ANN KARINA TANINGCO
G.R. No. 153820 October 16, 2009
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
FACTS
Spouses Lamberto and Erlinda Benolirao and the Spouses
Reynaldo and Norma Taningco were the co-owners of a 689-
square meter parcel of land located in Tagaytay City and covered
by TCT No. 26423. The co-owners executed a Deed of Conditional
Sale over the property in favor of Tan for the price of ₱1,378,000.
The deed provided for the payment of an initial down-payment of
P200K upon signing of the contract and the payment of the
balance shall be payable within a period of 150 days from date of
sale w/o interest. Pursuant to the Deed of Conditional Sale, Tan
issued and delivered to the co-owners/vendors a check for ₱200k
as down payment.
Then Lamberto died intestate. Erlinda and her children executed
an extrajudicial settlement of Lamberto’s estate wherein a new
certificate of title over the property, was issued in the names of
the Spouses Reynaldo and Norma Taningco and Erlinda Benolirao
and her children.
By agreement of the parties, the due date was extended by two
months. However, Tan failed to pay and asked for another
extension, which the vendors again granted. Notwithstanding this
second extension, Tan still failed to pay the remaining balance.
The vendors thus wrote him a letter demanding payment of the
balance of the purchase price within 5 days from notice;
otherwise, they would declare the rescission of the conditional
sale and the forfeiture of his down payment based on the terms of
the contract.
Tan refused to comply with the vendors’ demand and instead
wrote them a claiming that the annotation on the title constituted
an encumbrance on the property that would prevent the vendors
from delivering a clean title to him. Thus, he alleged that he could

no longer be required to pay the balance of the purchase price and
demanded the return of his down payment.
The repeated refusal by the vendors to heed Tan’s demand,
prompted Tan to file a complaint with the RTC for specific
performance against them. In his complaint, Tan alleged that
there was a novation of the Deed of Conditional Sale done
without his consent since the annotation on the title created
an encumbrance over the property. Tan prayed for the
refund of the down payment and the rescission of the
contract. Thereafter, Tan amended his Complaint, contending
that if the respondents insist on forfeiting the down payment, he
would be willing to pay the balance of the purchase price provided
there is reformation of the Deed of Conditional Sale. In the
meantime, he caused the annotation on the title of a notice of lis
pendens.
On August 1993, the respondents executed a Deed of Absolute
Sale over the property in favor of Hector de Guzman for the price
of ₱689K. Then, the RTC issued an order granting the
respondents’ motion to cancel the lis pendens annotation on the
title. Meanwhile, based on the Deed of Absolute Sale in his favor,
de Guzman registered the property and a new TCT was issued in
his name. Tan then filed a motion to carry over the lis pendens
annotation to TCT registered in de Guzman’s name, but the RTC
denied the motion.
The RTC rendered judgment ruling that the respondents’
forfeiture of Tan’s down payment was proper in accordance with
the terms and conditions of the contract between the parties and
ordered Tan to pay the respondents the amount of ₱30k, plus ₱1k
per court appearance, as attorney’s fees, and to pay the cost of suit.
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
On appeal, the CA dismissed the petition and affirmed the ruling
of the trial court in toto. Hence, the present petition.
ISSUE
1. WON there is contract of sale.
2. WON an annotation made pursuant to Section 3, Rule 74 of
the ROC on a COT conveying real property considered an
encumberance on the propert
HELD
1. None. Contract is a mere contract to sell
Article 1485 of the Civil Code defines a contract of sale as follows:
“By the contract of sale one of the contracting parties obligates
himself to transfer the ownership and to deliver a determinate
thing, and the other to pay therefor a price certain in money or its
equivalent. A contract of sale may be absolute or conditional.” The
very essence of a contract of sale is the transfer of ownership in
exchange for a price paid or promised.
In contrast, a contract to sell is defined as a bilateral contract
whereby the prospective seller, while expressly reserving the
ownership of the property despite delivery thereof to the
prospective buyer, binds himself to sell the property exclusively
to the prospective buyer upon fulfillment of the condition agreed,
i.e., full payment of the purchase price. 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 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.
In the present case, the true nature of the contract is revealed by
paragraph D thereof: d) That in case, BUYER have complied with
the terms and conditions of this contract, then the SELLERS shall
execute and deliver to the BUYER the appropriate Deed of
Absolute Sale. Jurisprudence has established that where the seller
promises to execute a deed of absolute sale upon the completion
by the buyer of the payment of the price, the contract is only a
contract to sell. Thus, while the contract is denominated as a Deed
of Conditional Sale, the presence of the above-quoted provision
identifies the contract as being a mere contract to sell.
3. A Section 4, Rule 74 annotation is an encumbrance on
the property
The annotation placed on TCT No. 27335, the new title issued to
reflect the extrajudicial partition of Lamberto Benolirao’s estate
among his heirs, states: x x x any liability to credirots (sic),
excluded heirs and other persons having right to the property, for
a period of two (2) years, with respect only to the share of Erlinda,
Andrew, Romano and Dion, all surnamed Benolirao.
The provision of Section 4, Rule 74 prescribes the procedure to be
followed if within two years after an extrajudicial partition or
summary distribution is made, an heir or other person appears to
have been deprived of his lawful participation in the estate, or
some outstanding debts which have not been paid are discovered.
When the lawful participation of the heir is not payable in money,
because, for instance, he is entitled to a part of the real property
that has been partitioned, there can be no other procedure than to
cancel the partition so made and make a new division, unless, of
course, the heir agrees to be paid the value of his participation
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
with interest. But in case the lawful participation of the heir
consists in his share in personal property of money left by the
decedent, or in case unpaid debts are discovered within the said
period of two years, the procedure is not to cancel the partition,
nor to appoint an administrator to re-assemble the assets, as was
allowed under the old Code, but the court, after hearing, shall fix
the amount of such debts or lawful participation in proportion to
or to the extent of the assets they have respectively received and,
if circumstances require, it may issue execution against the real
estate belonging to the decedent, or both. The present procedure
is more expedient and less expensive in that it dispenses with the
appointment of an administrator and does not disturb the
possession enjoyed by the distributees.
An annotation is placed on new certificates of title issued pursuant
to the distribution and partition of a decedent’s real properties to
warn third persons on the possible interests of excluded heirs or
unpaid creditors in these properties. The annotation, therefore,
creates a legal encumbrance or lien on the real property in favor
of the excluded heirs or creditors. Where a buyer purchases the
real property despite the annotation, he must be ready for the
possibility that the title could be subject to the rights of excluded
parties. The cancellation of the sale would be the logical
consequence where: (a) the annotation clearly appears on the
title, warning all would-be buyers; (b) the sale unlawfully
interferes with the rights of heirs; and (c) the rightful heirs bring
an action to question the transfer within the two-year period
provided by law. .
By the time Tan’s obligation to pay the balance of the purchase
price arose on May 21, 1993 (on account of the extensions granted
by the respondents), a new certificate of title covering the
property had already been issued on March 26, 1993, which
contained the encumbrance on the property; the encumbrance

would remain so attached until the expiration of the two-year
period. Clearly, at this time, the vendors could no longer compel
Tan to pay the balance of the purchase since considering they
themselves could not fulfill their obligation to transfer a clean title
over the property to Tan.
In connection to this, the Contract to sell is not rescinded but
terminated.
The remedy of rescission under Article 1191 cannot apply to mere
contracts to sell. This is because, in a contract to sell, title remains
with the vendor and does not pass on to the vendee until the
purchase price is paid in full. Thus, in a contract to sell, the
payment of the purchase price is a positive suspensive
condition. Failure to pay the price agreed upon is not a mere
breach, casual or serious, but a situation that prevents the
obligation of the vendor to convey title from acquiring an
obligatory force. If the vendor should eject the vendee for failure
to meet the condition precedent, he is enforcing the contract and
not rescinding it.
Therefore, the Court hold that the contract to sell was terminated
when the vendors could no longer legally compel Tan to pay the
balance of the purchase price as a result of the legal encumbrance
which attached to the title of the property. Since Tan’s refusal to
pay was due to the supervening event of a legal encumbrance on
the property and not through his own fault or negligence, the
Court find and so hold that the forfeiture of Tan’s down payment
was clearly unwarranted.
Monetary award is subject to legal interest
Undoubtedly, Tan made a clear and unequivocal demand on the
vendors to return his down payment as early as May 28, 1993.
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
Pursuant to the definitive ruling in Eastern Shipping Lines, Inc. v.
Court of Appeals, we hold that the vendors should return the
₱200K down payment to Tan, subject to the legal interest of 6%
per annum computed from May 28, 1993, the date of the first
demand letter.
Furthermore, after a judgment has become final and executory,
the rate of legal interest, whether the obligation was in the form
of a loan or forbearance of money or otherwise, shall be 12% per
annum from such finality until its satisfaction. Accordingly, the
principal obligation of ₱200K shall bear 6% interest from the date
of first demand or from May 28, 1993. From the date the liability
for the principal obligation and attorney’s fees has become final
and executory, an annual interest of 12% shall be imposed on
these obligations until their final satisfaction, this interim period
being deemed to be by then an equivalent to a forbearance of
credit.
SPOUSES ROQUE VS AGUADO
G.R. No. 193787. April 7, 2014
Petitioners-spouses Jose C. Roque and Beatriz dela Cruz Roque
(Sps. Roque) and the original owners of the then unregistered
Lot 18089 namely, Velia R. Rivero et al. executed a Deed of
Conditional Sale of Real Property (1977 Deed of Conditional
Sale) over a 1,231-sq. m. portion of Lot 18089 (subject portion)
for a consideration of ₱30,775.00.
The parties agreed that Sps. Roque shall make an initial payment
of ₱15,387.50 upon signing, while the remaining balance of the
purchase price shall be payable upon the registration of Lot
18089, as well as the segregation and the concomitant issuance
of a separate title over the subject portion in their names. After

the deed’s execution, Sps. Roque took possession and
introduced improvements on the subject portion which they
utilized as a balut factory.
Sometime Fructuoso Sabug, Jr. (Sabug, Jr.), former Treasurer of
the National Council of Churches in the Philippines (NCCP),
applied for a free patent over the entire Lot and was eventually
issued an Original Certificate of Title in his name. Sabug, Jr. and
Rivero, in her personal capacity and in representation of Rivero,
et al., executed a Joint Affidavit (1993 Joint Affidavit),
acknowledging that the subject portion belongs to Sps. Roque
and expressed their willingness to segregate the same from the
entire area of Lot 18089.
However, Sabug, Jr., through a Deed of Absolute Sale sold Lot
18089 to one Ma. Pamela P. Aguado for
₱2,500,000.00.Thereafter, Aguado obtained an ₱8,000,000.00
loan from the Land Bank of the Philippines secured by a
mortgage over the Lot .When she failed to pay her loan
obligation, Land Bank commenced extra-judicial foreclosure
proceedings and eventually tendered the highest bid in the
auction sale. Upon Aguado’s failure to redeem the subject
property, Land Bank consolidated its ownership.
Sps. Roque then filed a complaint for reconveyance, annulment
of sale, deed of real estate mortgage, foreclosure, and certificate
of sale, and damages before the RTC seeking to be declared as
the true owners of the subject portion which had been
erroneously included in the sale between Aguado and Sabug, Jr.,
and, subsequently, the mortgage to Land Bank, both covering
Lot in its entirety.
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
In defense, NCCP and Sabug, Jr. denied any knowledge of the
1977 Deed of Conditional Sale through which the subject
portion had been purportedly conveyed to Sps. Roque.For her
part, Aguado raised the defense of an innocent purchaser for
value as she allegedly derived her title from Sabug, Jr.She also
claimed that Sps. Roque’s cause of action had already prescribed
.
On the other hand, Land Bank averred that it had no knowledge
of Sps. Roque’s claim relative to the subject portion, considering
that at the time the loan was taken out, Lot 18089 in its entirety
was registered in Aguado’s name and no lien and/or
encumbrance was annotated on her certificate of title.
NCCP filed a separate complaint also for declaration of nullity
of documents and certificates of title and damages, It claimed to
be the real owner of Lot 18089 which it supposedly acquired
from Sabug, Jr. through an oral contract of sale.
The RTC dismissed the claims of Spouses Roque and NCCP. On
appeal, the Court of Appeals (CA) affirmed the RTC’s decision.
ISSUE
Whether or not the CA erred in not ordering the reconveyance of the
subject portion in Sps. Roque’s favor.
HELD
The essence of an action for reconveyance is to seek the transfer
of the property which was wrongfully or erroneously registered
in another person’s name to its rightful owner or to one with a

better right.Thus, it is incumbent upon the aggrieved party to
show that he has a legal claim on the property superior to that of
the registered owner and that the property has not yet passed to
the hands of an innocent purchaser for value.
Sps. Roque claim that the subject portion covered by the 1977
Deed of Conditional Sale between them and Rivero, et al. was
wrongfully included in the certificates of title covering Lot
18089, and, hence, must be segregated therefrom and their
ownership thereof be confirmed.
Examining its provisions, the Court finds that the stipulation
above-highlighted shows that the 1977 Deed of Conditional Sale
is actually in the nature of a contract to sell and not one of sale
contrary to Sps. Roque’s belief. In this relation, it has been
consistently ruled that where the seller promises to execute a
deed of absolute sale upon the completion by the buyer of the
payment of the purchase price, the contract is only a contract to
sell even if their agreement is denominated as a Deed of
Conditional Sale, as in this case. This treatment stems from the
legal characterization of a contract to sell, that is, 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 subject
property exclusively to the prospective buyer upon fulfillment
of the condition agreed upon, such as, the full payment of the
purchase price. Elsewise stated, in a contract to sell, ownership
is retained by the vendor and is not to pass to the vendee until
full payment of the purchase price. Explaining the subject matter
further, the Court, in Ursal v. CA,held that:
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
[I]n contracts to sell the obligation of the seller to sell becomes
demandable only upon the happening of the suspensive
condition, that is, the full payment of the purchase price by the
buyer. It is only upon the existence of the contract of sale that
the seller becomes obligated to transfer the ownership of the
thing sold to the buyer. Prior to the existence of the contract of
sale, the seller is not obligated to transfer the ownership to the
buyer, even if there is a contract to sell between them.
Here, it is undisputed that Sps. Roque have not paid the final
installment of the purchase price. As such, the condition which
would have triggered the parties’ obligation to enter into and
thereby perfect a contract of sale in order to effectively transfer
the ownership of the subject portion from the sellers (i.e., Rivero
et al.) to the buyers (Sps. Roque) cannot be deemed to have been
fulfilled. Consequently, the latter cannot validly claim
ownership over the subject portion even if they had made an
initial payment and even took possession of the same.
CABLING vs LUMAPAS
G.R. No. 196950. June 18, 2014
FACTS

The petitioner, Helen Cabling, was the highest bidder in an
extrajudicial foreclosure sale. The Final Deed of Sale was issued
by the Sheriff of Olongapo City and the title to the property was
duly transferred. The petitioner filed an Application for the
Issuance of a Writ of Possession with the RTC. The RTC issued
an order granting the petitioner’s application.
Respondent Joselin Tan Lumapas, through counsel, filed a
Motion for Leave of Court for Intervention as Party Defendant
(with Urgent Motion to Hold in Abeyance Implementation of
Writ of Possession) and an Answer in Intervention, as a third
party in actual possession of the foreclosed property. She
claimed that the property had previously been sold to her by
Aida Ibabao, the property’s registered owner and the judgment
debtor/mortgagor in the extrajudicial foreclosure sale, pursuant
to a Deed of Conditional Sale.
RTC ruled in favor of Lumapas and stated that an ex-parte writ
of possession issued pursuant to Act No. 335 (sic), as amended,
cannot be enforced against a third person who is in actual
possession of the foreclosed property and who is not in privity
with the debtor/mortgagor. CA affirmed in toto the RTC’s
assailed orders.
ISSUE
Whether or not Respondent, Lumapas, be the owner of the property
pursuant to a deed of conditional sale
HELD
Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES
SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella
NO. In the present case, the respondent cannot be said to possess
the subject property by adverse title or right as her possession is
merely premised on the alleged conditional sale of the property
to her by the judgment debtor/mortgagor.
The execution of a contract of conditional sale does not
immediately transfer title to the property to be sold from seller
to buyer. In such contract, ownership or title to the property is
retained by the seller until the fulfillment of a positive
suspensive condition which is normally the payment of the
purchase price in the manner agreed upon.
In the present case, the Deed of Conditional Sale between the
respondent (buyer) and the subject property’s registered owner
(seller) expressly reserved to the latter ownership over the
property until full payment of the purchase price, despite the
delivery of the subject property to the respondent. It is provided
in paragraph 6 of the parties’ contract that only upon full
payment of the total sale value of ₱2.2 million that the seller
shall execute a deed of absolute sale in favor of the respondent.
It likewise appears from the records that no deed of absolute sale
over the subject property has been executed in the respondent's
favor. Thus, the respondent's possession from the time the
subject property was "delivered" to her by the seller cannot be
claimed as possession in the concept of an owner, as the
ownership and title to the subject property still then remained
with the seller until the title to the property was transferred to
the petitioner in March 2009. In order for the respondent not to
be ousted by the ex parte issuance of a writ of possession, her
possession of the property must be adverse in that she must
 SALES CASES A/Y: ‘18-‘19
ATTY. Irvin Fabella

prove a right independent of and even superior to that of the

judgment debtor/mortgagor.

Digested by FLORENTIN.GALO.LAURIO.LEANO.MORALES