Article 774, Wills and Succession

G.R. No. 103577 October 7, 1996 Clearly, the conditions appurtenant to the sale are the
following:
ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL,
ANNABELLE C. GONZALES (for herself and on behalf of Florida C. Tupper, 1. Ramona will make a down payment of Fifty Thousand
as attorney-in-fact), CIELITO A. CORONEL, FLORAIDA A. ALMONTE, and (P50,000.00) Pesos upon execution of the document
CATALINA BALAIS MABANAG, petitioners, aforestated;
vs.
THE COURT OF APPEALS, CONCEPCION D. ALCARAZ, and RAMONA 2. The Coronels will cause the transfer in their names of
PATRICIA ALCARAZ, assisted by GLORIA F. NOEL as attorney-in- the title of the property registered in the name of their
fact, respondents. deceased father upon receipt of the Fifty Thousand
(P50,000.00) Pesos down payment;

3. Upon the transfer in their names of the subject

property, the Coronels will execute the deed of absolute
MELO, J.:p sale in favor of Ramona and the latter will pay the former
the whole balance of One Million One Hundred Ninety
The petition before us has its roots in a complaint for specific performance Thousand (P1,190,000.00) Pesos.
to compel herein petitioners (except the last named, Catalina Balais
Mabanag) to consummate the sale of a parcel of land with its improvements On the same date (January 15, 1985), plaintiff-appellee
located along Roosevelt Avenue in Quezon City entered into by the parties Concepcion D. Alcaraz (hereinafter referred to as
sometime in January 1985 for the price of P1,240,000.00. Concepcion), mother of Ramona, paid the down
payment of Fifty Thousand (P50,000.00) Pesos (Exh. "B",
The undisputed facts of the case were summarized by respondent court in Exh. "2").
this wise:
On February 6, 1985, the property originally registered
On January 19, 1985, defendants-appellants Romulo in the name of the Coronels' father was transferred in
Coronel, et al. (hereinafter referred to as Coronels) their names under TCT
executed a document entitled "Receipt of Down No. 327043 (Exh. "D"; Exh. "4")
Payment" (Exh. "A") in favor of plaintiff Ramona Patricia
Alcaraz (hereinafter referred to as Ramona) which is On February 18, 1985, the Coronels sold the property
reproduced hereunder: covered by TCT No. 327043 to intervenor-appellant
Catalina B. Mabanag (hereinafter referred to as Catalina)
RECEIPT OF DOWN PAYMENT for One Million Five Hundred Eighty Thousand
(P1,580,000.00) Pesos after the latter has paid Three
Hundred Thousand (P300,000.00) Pesos (Exhs. "F-3";
P1,240,000.00 — Total amount
Exh. "6-C")

50,000 — Down payment

For this reason, Coronels canceled and rescinded the
———————————
contract (Exh. "A") with Ramona by depositing the down
P1,190,000.00 — Balance
payment paid by Concepcion in the bank in trust for
Ramona Patricia Alcaraz.
Received from Miss Ramona Patricia Alcaraz of 146
Timog, Quezon City, the sum of Fifty Thousand Pesos
On February 22, 1985, Concepcion, et al., filed a
purchase price of our inherited house and lot, covered
complaint for specific performance against the Coronels
by TCT No. 119627 of the Registry of Deeds of Quezon
and caused the annotation of a notice of lis pendens at
City, in the total amount of P1,240,000.00.
the back of TCT No. 327403 (Exh. "E"; Exh. "5").

We bind ourselves to effect the transfer in our names

On April 2, 1985, Catalina caused the annotation of a
from our deceased father, Constancio P. Coronel, the
notice of adverse claim covering the same property with
transfer certificate of title immediately upon receipt of
the Registry of Deeds of Quezon City (Exh. "F"; Exh. "6").
the down payment above-stated.

On April 25, 1985, the Coronels executed a Deed of

On our presentation of the TCT already in or name, We
Absolute Sale over the subject property in favor of
will immediately execute the deed of absolute sale of
Catalina (Exh. "G"; Exh. "7").
said property and Miss Ramona Patricia Alcaraz shall
immediately pay the balance of the P1,190,000.00.

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Article 774, Wills and Succession

On June 5, 1985, a new title over the subject property A motion for reconsideration was filed by petitioner before the new
was issued in the name of Catalina under TCT No. presiding judge of the Quezon City RTC but the same was denied by Judge
351582 (Exh. "H"; Exh. "8"). Estrella T. Estrada, thusly:

(Rollo, pp. 134-136) The prayer contained in the instant motion, i.e., to annul
the decision and to render anew decision by the
In the course of the proceedings before the trial court (Branch 83, RTC, undersigned Presiding Judge should be denied for the
Quezon City) the parties agreed to submit the case for decision solely on the following reasons: (1) The instant case became
basis of documentary exhibits. Thus, plaintiffs therein (now private submitted for decision as of April 14, 1988 when the
respondents) proffered their documentary evidence accordingly marked as parties terminated the presentation of their respective
Exhibits "A" through "J", inclusive of their corresponding submarkings. documentary evidence and when the Presiding Judge at
Adopting these same exhibits as their own, then defendants (now that time was Judge Reynaldo Roura. The fact that they
petitioners) accordingly offered and marked them as Exhibits "1" through were allowed to file memoranda at some future date did
"10", likewise inclusive of their corresponding submarkings. Upon motion of not change the fact that the hearing of the case was
the parties, the trial court gave them thirty (30) days within which to terminated before Judge Roura and therefore the same
simultaneously submit their respective memoranda, and an additional 15 should be submitted to him for decision; (2) When the
days within which to submit their corresponding comment or reply thereof, defendants and intervenor did not object to the
after which, the case would be deemed submitted for resolution. authority of Judge Reynaldo Roura to decide the case
prior to the rendition of the decision, when they met for
the first time before the undersigned Presiding Judge at
On April 14, 1988, the case was submitted for resolution before Judge
the hearing of a pending incident in Civil Case No. Q-
Reynaldo Roura, who was then temporarily detailed to preside over Branch
46145 on November 11, 1988, they were deemed to
82 of the RTC of Quezon City. On March 1, 1989, judgment was handed down
have acquiesced thereto and they are now estopped
by Judge Roura from his regular bench at Macabebe, Pampanga for the
from questioning said authority of Judge Roura after
Quezon City branch, disposing as follows:
they received the decision in question which happens to
be adverse to them; (3) While it is true that Judge
WHEREFORE, judgment for specific performance is Reynaldo Roura was merely a Judge-on-detail at this
hereby rendered ordering defendant to execute in favor Branch of the Court, he was in all respects the Presiding
of plaintiffs a deed of absolute sale covering that parcel Judge with full authority to act on any pending incident
of land embraced in and covered by Transfer Certificate submitted before this Court during his incumbency.
of Title No. 327403 (now TCT No. 331582) of the Registry When he returned to his Official Station at Macabebe,
of Deeds for Quezon City, together with all the Pampanga, he did not lose his authority to decide or
improvements existing thereon free from all liens and resolve such cases submitted to him for decision or
encumbrances, and once accomplished, to immediately resolution because he continued as Judge of the
deliver the said document of sale to plaintiffs and upon Regional Trial Court and is of co-equal rank with the
receipt thereof, the said document of sale to plaintiffs undersigned Presiding Judge. The standing rule and
and upon receipt thereof, the plaintiffs are ordered to supported by jurisprudence is that a Judge to whom a
pay defendants the whole balance of the purchase price case is submitted for decision has the authority to decide
amounting to P1,190,000.00 in cash. Transfer Certificate the case notwithstanding his transfer to another branch
of Title No. 331582 of the Registry of Deeds for Quezon or region of the same court (Sec. 9, Rule 135, Rule of
City in the name of intervenor is hereby canceled and Court).
declared to be without force and effect. Defendants and
intervenor and all other persons claiming under them
Coming now to the twin prayer for reconsideration of
are hereby ordered to vacate the subject property and
the Decision dated March 1, 1989 rendered in the
deliver possession thereof to plaintiffs. Plaintiffs' claim
instant case, resolution of which now pertains to the
for damages and attorney's fees, as well as the
undersigned Presiding Judge, after a meticulous
counterclaims of defendants and intervenors are hereby
examination of the documentary evidence presented by
dismissed.
the parties, she is convinced that the Decision of March
1, 1989 is supported by evidence and, therefore, should
No pronouncement as to costs. not be disturbed.

So Ordered. IN VIEW OF THE FOREGOING, the "Motion for

Reconsideration and/or to Annul Decision and Render
Macabebe, Pampanga for Quezon City, March 1, 1989. Anew Decision by the Incumbent Presiding Judge" dated
March 20, 1989 is hereby DENIED.
(Rollo, p. 106)
SO ORDERED.

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Article 774, Wills and Succession

Quezon City, Philippines, July 12, 1989. a) Consent or meeting of the minds, that is, consent to
transfer ownership in exchange for the price;
(Rollo, pp. 108-109)
b) Determinate subject matter; and
Petitioners thereupon interposed an appeal, but on December 16, 1991, the
Court of Appeals (Buena, Gonzaga-Reyes, Abad Santos (P), JJ.) rendered its c) Price certain in money or its equivalent.
decision fully agreeing with the trial court.
Under this definition, a Contract to Sell may not be considered as a
Hence, the instant petition which was filed on March 5, 1992. The last Contract of Sale because the first essential element is lacking. In a contract
pleading, private respondents' Reply Memorandum, was filed on September to sell, the prospective seller explicity reserves the transfer of title to the
15, 1993. The case was, however, re-raffled to undersigned ponente only on prospective buyer, meaning, the prospective seller does not as yet agree or
August 28, 1996, due to the voluntary inhibition of the Justice to whom the consent to transfer ownership of the property subject of the contract to sell
case was last assigned. until the happening of an event, which for present purposes we shall take as
the full payment of the purchase price. What the seller agrees or obliges
While we deem it necessary to introduce certain refinements in the himself to do is to fulfill is promise to sell the subject property when the
disquisition of respondent court in the affirmance of the trial court's entire amount of the purchase price is delivered to him. In other words the
decision, we definitely find the instant petition bereft of merit. 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 heart of the controversy which is the ultimate key in the resolution of
the prospective buyer. In Roque vs. Lapuz (96 SCRA 741 [1980]), this Court
the other issues in the case at bar is the precise determination of the legal
had occasion to rule:
significance of the document entitled "Receipt of Down Payment" which was
offered in evidence by both parties. There is no dispute as to the fact that
said document embodied the binding contract between Ramona Patricia Hence, We hold that the contract between the
Alcaraz on the one hand, and the heirs of Constancio P. Coronel on the other, petitioner and the respondent was a contract to sell
pertaining to a particular house and lot covered by TCT No. 119627, as where the ownership or title is retained by the seller and
defined in Article 1305 of the Civil Code of the Philippines which reads as is not to pass until the full payment of the price, such
follows: 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
Art. 1305. A contract is a meeting of minds between two
vendor to convey title from acquiring binding force.
persons whereby one binds himself, with respect to the
other, to give something or to render some service.
Stated positively, upon the fulfillment of the suspensive condition which is
the full payment of the purchase price, the prospective seller's obligation to
While, it is the position of private respondents that the "Receipt of Down
sell the subject property by entering into a contract of sale with the
Payment" embodied a perfected contract of sale, which perforce, they seek
prospective buyer becomes demandable as provided in Article 1479 of the
to enforce by means of an action for specific performance, petitioners on
Civil Code which states:
their part insist that what the document signified was a mere executory
contract to sell, subject to certain suspensive conditions, and because of the
absence of Ramona P. Alcaraz, who left for the United States of America, Art. 1479. A promise to buy and sell a determinate thing
said contract could not possibly ripen into a contract absolute sale. for a price certain is reciprocally demandable.

Plainly, such variance in the contending parties' contentions is brought An accepted unilateral promise to buy or to sell a
about by the way each interprets the terms and/or conditions set forth in determinate thing for a price certain is binding upon the
said private instrument. Withal, based on whatever relevant and admissible promissor if the promise is supported by a consideration
evidence may be available on record, this, Court, as were the courts below, distinct from the price.
is now called upon to adjudge what the real intent of the parties was at the
time the said document was executed. A contract to sell may thus be defined as a bilateral contract whereby the
prospective seller, while expressly reserving the ownership of the subject
The Civil Code defines a contract of sale, thus: property despite delivery thereof to the prospective buyer, binds himself to
sell the said property exclusively to the prospective buyer upon fulfillment
of the condition agreed upon, that is, full payment of the purchase price.
Art. 1458. By the contract of sale one of the contracting
parties obligates himself to transfer the ownership of
and to deliver a determinate thing, and the other to pay A contract to sell as defined hereinabove, may not even be considered as a
therefor a price certain in money or its equivalent. 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
Sale, by its very nature, is a consensual contract because it is perfected by
present, although it is conditioned upon the happening of a contingent event
mere consent. The essential elements of a contract of sale are the following:
which may or may not occur. If the suspensive condition is not fulfilled, the
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Article 774, Wills and Succession

perfection of the contract of sale is completely abated (cf. Homesite and without any reservation of title until full payment of the entire
housing Corp. vs. Court of Appeals, 133 SCRA 777 [1984]). However, if the purchase price, the natural and ordinary idea conveyed is that they
suspensive condition is fulfilled, the contract of sale is thereby perfected, sold their property.
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 When the "Receipt of Down Payment" is considered in its entirety, it
buyer by operation of law without any further act having to be performed becomes more manifest that there was a clear intent on the part of
by the seller. petitioners to transfer title to the buyer, but since the transfer certificate of
title was still in the name of petitioner's father, they could not fully effect
In a contract to sell, upon the fulfillment of the suspensive condition which such transfer although the buyer was then willing and able to immediately
is the full payment of the purchase price, ownership will not automatically pay the purchase price. Therefore, petitioners-sellers undertook upon
transfer to the buyer although the property may have been previously receipt of the down payment from private respondent Ramona P. Alcaraz,
delivered to him. The prospective seller still has to convey title to the to cause the issuance of a new certificate of title in their names from that of
prospective buyer by entering into a contract of absolute sale. their father, after which, they promised to present said title, now in their
names, to the latter and to execute the deed of absolute sale whereupon,
It is essential to distinguish between a contract to sell and a conditional the latter shall, in turn, pay the entire balance of the purchase price.
contract of sale specially in cases where the subject property is sold by the
owner not to the party the seller contracted with, but to a third person, as The agreement could not have been a contract to sell because the sellers
in the case at bench. In a contract to sell, there being no previous sale of the herein made no express reservation of ownership or title to the subject parcel
property, a third person buying such property despite the fulfillment of the of land. Furthermore, the circumstance which prevented the parties from
suspensive condition such as the full payment of the purchase price, for entering into an absolute contract of sale pertained to the sellers themselves
instance, cannot be deemed a buyer in bad faith and the prospective buyer (the certificate of title was not in their names) and not the full payment of
cannot seek the relief of reconveyance of the property. There is no double the purchase price. Under the established facts and circumstances of the
sale in such case. Title to the property will transfer to the buyer after case, the Court may safely presume that, had the certificate of title been in
registration because there is no defect in the owner-seller's title per se, but the names of petitioners-sellers at that time, there would have been no
the latter, of course, may be used for damages by the intending buyer. reason why an absolute contract of sale could not have been executed and
consummated right there and then.
In a conditional contract of sale, however, upon the fulfillment of the
suspensive condition, the sale becomes absolute and this will definitely Moreover, unlike in a contract to sell, petitioners in the case at bar did not
affect the seller's title thereto. In fact, if there had been previous delivery of merely promise to sell the properly to private respondent upon the
the subject property, the seller's ownership or title to the property is fulfillment of the suspensive condition. On the contrary, having already
automatically transferred to the buyer such that, the seller will no longer agreed to sell the subject property, they undertook to have the certificate of
have any title to transfer to any third person. Applying Article 1544 of the title changed to their names and immediately thereafter, to execute the
Civil Code, such second buyer of the property who may have had actual or written deed of absolute sale.
constructive knowledge of such defect in the seller's title, or at least was
charged with the obligation to discover such defect, cannot be a registrant Thus, the parties did not merely enter into a contract to sell where the
in good faith. Such second buyer cannot defeat the first buyer's title. In case sellers, after compliance by the buyer with certain terms and conditions,
a title is issued to the second buyer, the first buyer may seek reconveyance promised to sell the property to the latter. What may be perceived from the
of the property subject of the sale. respective undertakings of the parties to the contract is that petitioners had
already agreed to sell the house and lot they inherited from their father,
With the above postulates as guidelines, we now proceed to the task of completely willing to transfer full ownership of the subject house and lot to
deciphering the real nature of the contract entered into by petitioners and the buyer if the documents were then in order. It just happened, however,
private respondents. that the transfer certificate of title was then still in the name of their father.
It was more expedient to first effect the change in the certificate of title so
It is a canon in the interpretation of contracts that the words used therein as to bear their names. That is why they undertook to cause the issuance of
should be given their natural and ordinary meaning unless a technical a new transfer of the certificate of title in their names upon receipt of the
meaning was intended (Tan vs. Court of Appeals, 212 SCRA 586 [1992]). down payment in the amount of P50,000.00. As soon as the new certificate
Thus, when petitioners declared in the said "Receipt of Down Payment" that of title is issued in their names, petitioners were committed to immediately
they — execute the deed of absolute sale. Only then will the obligation of the buyer
to pay the remainder of the purchase price arise.
Received from Miss Ramona Patricia Alcaraz of 146
Timog, Quezon City, the sum of Fifty Thousand There is no doubt that unlike in a contract to sell which is most commonly
Pesos purchase price of our inherited house and lot, entered into so as to protect the seller against a buyer who intends to buy
covered by TCT No. 1199627 of the Registry of Deeds of the property in installment by withholding ownership over the property until
Quezon City, in the total amount of P1,240,000.00. the buyer effects full payment therefor, in the contract entered into in the
case at bar, the sellers were the one who were unable to enter into a
contract of absolute sale by reason of the fact that the certificate of title to
the property was still in the name of their father. It was the sellers in this

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Article 774, Wills and Succession

case who, as it were, had the impediment which prevented, so to speak, the Petitioners themselves recognized that they entered into a contract of sale
execution of an contract of absolute sale. subject to a suspensive condition. Only, they contend, continuing in the
same paragraph, that:
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 . . . Had petitioners-sellers not complied with this
petitioners Romeo A. Coronel, et al., the parties had agreed to a conditional condition of first transferring the title to the property
contract of sale, consummation of which is subject only to the successful under their names, there could be no perfected contract
transfer of the certificate of title from the name of petitioners' father, of sale. (Emphasis supplied.)
Constancio P. Coronel, to their names.
(Ibid.)
The Court significantly notes this suspensive condition was, in fact, fulfilled
on February 6, 1985 (Exh. "D"; Exh. "4"). Thus, on said date, the conditional not aware that they set their own trap for themselves, for Article
contract of sale between petitioners and private respondent Ramona P. 1186 of the Civil Code expressly provides that:
Alcaraz became obligatory, the only act required for the consummation
thereof being the delivery of the property by means of the execution of the
Art. 1186. The condition shall be deemed fulfilled when
deed of absolute sale in a public instrument, which petitioners unequivocally
the obligor voluntarily prevents its fulfillment.
committed themselves to do as evidenced by the "Receipt of Down
Payment."
Besides, it should be stressed and emphasized that what is more controlling
than these mere hypothetical arguments is the fact that the condition herein
Article 1475, in correlation with Article 1181, both of the Civil Code, plainly
referred to was actually and indisputably fulfilled on February 6, 1985, when
applies to the case at bench. Thus,
a new title was issued in the names of petitioners as evidenced by TCT No.
327403 (Exh. "D"; Exh. "4").
Art. 1475. The contract of sale is perfected at the
moment there is a meeting of minds upon the thing
The inevitable conclusion is that on January 19, 1985, as evidenced by the
which is the object of the contract and upon the price.
document denominated as "Receipt of Down Payment" (Exh. "A"; Exh. "1"),
the parties entered into a contract of sale subject only to the suspensive
From the moment, the parties may reciprocally demand condition that the sellers shall effect the issuance of new certificate title
performance, subject to the provisions of the law from that of their father's name to their names and that, on February 6,
governing the form of contracts. 1985, this condition was fulfilled (Exh. "D"; Exh. "4").

Art. 1181. In conditional obligations, the acquisition of We, therefore, hold that, in accordance with Article 1187 which pertinently
rights, as well as the extinguishment or loss of those provides —
already acquired, shall depend upon the happening of
the event which constitutes the condition.
Art. 1187. The effects of conditional obligation to give,
once the condition has been fulfilled, shall retroact to
Since the condition contemplated by the parties which is the issuance of a the day of the constitution of the obligation . . .
certificate of title in petitioners' names was fulfilled on February 6, 1985, the
respective obligations of the parties under the contract of sale became
In obligation to do or not to do, the courts shall
mutually demandable, that is, petitioners, as sellers, were obliged to present
determine, in each case, the retroactive effect of the
the transfer certificate of title already in their names to private respondent
condition that has been complied with.
Ramona P. Alcaraz, the buyer, and to immediately execute the deed of
absolute sale, while the buyer on her part, was obliged to forthwith pay the
balance of the purchase price amounting to P1,190,000.00. 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
It is also significant to note that in the first paragraph in page 9 of their
condition on February 6, 1985. As of that point in time, reciprocal
petition, petitioners conclusively admitted that:
obligations of both seller and buyer arose.

3. The petitioners-sellers Coronel bound themselves "to

Petitioners also argue there could been no perfected contract on January 19,
effect the transfer in our names from our deceased
1985 because they were then not yet the absolute owners of the inherited
father Constancio P. Coronel, the transfer certificate of
property.
title immediately upon receipt of the downpayment
above-stated". The sale was still subject to this
suspensive condition. (Emphasis supplied.) We cannot sustain this argument.

(Rollo, p. 16) Article 774 of the Civil Code defines Succession as a mode of transferring
ownership as follows:

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Article 774, Wills and Succession

Art. 774. Succession is a mode of acquisition by virtue of Even assuming arguendo that Ramona P. Alcaraz was in the United States of
which the property, rights and obligations to be extent America on February 6, 1985, we cannot justify petitioner-sellers' act of
and value of the inheritance of a person are transmitted unilaterally and extradicially rescinding the contract of sale, there being no
through his death to another or others by his will or by express stipulation authorizing the sellers to extarjudicially rescind the
operation of law. contract of sale. (cf. Dignos vs. CA, 158 SCRA 375 [1988]; Taguba vs. Vda. de
Leon, 132 SCRA 722 [1984])
Petitioners-sellers in the case at bar being the sons and daughters
of the decedent Constancio P. Coronel are compulsory heirs who Moreover, petitioners are estopped from raising the alleged absence of
were called to succession by operation of law. Thus, at the point Ramona P. Alcaraz because although the evidence on record shows that the
their father drew his last breath, petitioners stepped into his shoes sale was in the name of Ramona P. Alcaraz as the buyer, the sellers had been
insofar as the subject property is concerned, such that any rights dealing with Concepcion D. Alcaraz, Ramona's mother, who had acted for
or obligations pertaining thereto became binding and enforceable and in behalf of her daughter, if not also in her own behalf. Indeed, the down
upon them. It is expressly provided that rights to the succession payment was made by Concepcion D. Alcaraz with her own personal check
are transmitted from the moment of death of the decedent (Exh. "B"; Exh. "2") for and in behalf of Ramona P. Alcaraz. There is no
(Article 777, Civil Code; Cuison vs. Villanueva, 90 Phil. 850 [1952]). evidence showing that petitioners ever questioned Concepcion's authority
to represent Ramona P. Alcaraz when they accepted her personal check.
Be it also noted that petitioners' claim that succession may not be declared Neither did they raise any objection as regards payment being effected by a
unless the creditors have been paid is rendered moot by the fact that they third person. Accordingly, as far as petitioners are concerned, the physical
were able to effect the transfer of the title to the property from the absence of Ramona P. Alcaraz is not a ground to rescind the contract of sale.
decedent's name to their names on February 6, 1985.
Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default,
Aside from this, petitioners are precluded from raising their supposed lack insofar as her obligation to pay the full purchase price is concerned.
of capacity to enter into an agreement at that time and they cannot be Petitioners who are precluded from setting up the defense of the physical
allowed to now take a posture contrary to that which they took when they absence of Ramona P. Alcaraz as above-explained offered no proof
entered into the agreement with private respondent Ramona P. Alcaraz. The whatsoever to show that they actually presented the new transfer certificate
Civil Code expressly states that: of title in their names and signified their willingness and readiness to execute
the deed of absolute sale in accordance with their agreement. Ramona's
corresponding obligation to pay the balance of the purchase price in the
Art. 1431. Through estoppel an admission or
amount of P1,190,000.00 (as buyer) never became due and demandable
representation is rendered conclusive upon the person
and, therefore, she cannot be deemed to have been in default.
making it, and cannot be denied or disproved as against
the person relying thereon.
Article 1169 of the Civil Code defines when a party in a contract involving
reciprocal obligations may be considered in default, to wit:
Having represented themselves as the true owners of the subject
property at the time of sale, petitioners cannot claim now that
they were not yet the absolute owners thereof at that time. Art. 1169. Those obliged to deliver or to do something,
incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of
Petitioners also contend that although there was in fact a perfected contract
their obligation.
of sale between them and Ramona P. Alcaraz, the latter breached her
reciprocal obligation when she rendered impossible the consummation
thereof by going to the United States of America, without leaving her xxx xxx xxx
address, telephone number, and Special Power of Attorney (Paragraphs 14
and 15, Answer with Compulsory Counterclaim to the Amended Complaint, In reciprocal obligations, neither party incurs in delay if
p. 2; Rollo, p. 43), for which reason, so petitioners conclude, they were the other does not comply or is not ready to comply in a
correct in unilaterally rescinding rescinding the contract of sale. proper manner with what is incumbent upon him. From
the moment one of the parties fulfill his obligation, delay
We do not agree with petitioners that there was a valid rescission of the by the other begins. (Emphasis supplied.)
contract of sale in the instant case. We note that these supposed grounds
for petitioners' rescission, are mere allegations found only in their There is thus neither factual nor legal basis to rescind the contract of sale
responsive pleadings, which by express provision of the rules, are deemed between petitioners and respondents.
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 With the foregoing conclusions, the sale to the other petitioner, Catalina B.
to substantiate petitioners' allegations. We have stressed time and again Mabanag, gave rise to a case of double sale where Article 1544 of the Civil
that allegations must be proven by sufficient evidence (Ng Cho Cio vs. Ng Code will apply, to wit:
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]).
Art. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to

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Article 774, Wills and Succession

the person who may have first taken possession thereof We are not persuaded by such argument.
in good faith, if it should be movable property.
In a case of double sale, what finds relevance and materiality is not whether
Should if be immovable property, the ownership shall or not the second buyer was a buyer in good faith but whether or not said
belong to the person acquiring it who in good faith first second buyer registers such second sale in good faith, that is, without
recorded it in Registry of Property. knowledge of any defect in the title of the property sold.

Should there be no inscription, the ownership shall As clearly borne out by the evidence in this case, petitioner Mabanag could
pertain to the person who in good faith was first in the not have in good faith, registered the sale entered into on February 18, 1985
possession; and, in the absence thereof to the person because as early as February 22, 1985, a notice of lis pendens had been
who presents the oldest title, provided there is good annotated on the transfer certificate of title in the names of petitioners,
faith. whereas petitioner Mabanag registered the said sale sometime in April,
1985. At the time of registration, therefore, petitioner Mabanag knew that
The record of the case shows that the Deed of Absolute Sale dated April 25, the same property had already been previously sold to private respondents,
1985 as proof of the second contract of sale was registered with the Registry or, at least, she was charged with knowledge that a previous buyer is
of Deeds of Quezon City giving rise to the issuance of a new certificate of claiming title to the same property. Petitioner Mabanag cannot close her
title in the name of Catalina B. Mabanag on June 5, 1985. Thus, the second eyes to the defect in petitioners' title to the property at the time of the
paragraph of Article 1544 shall apply. registration of the property.

The above-cited provision on double sale presumes title or ownership to This Court had occasions to rule that:
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 If a vendee in a double sale registers that sale after he
be no inscription by either of the two buyers, when the second buyer, in has acquired knowledge that there was a previous sale
good faith, acquires possession of the property ahead of the first buyer. of the same property to a third party or that another
Unless, the second buyer satisfies these requirements, title or ownership will person claims said property in a pervious sale, the
not transfer to him to the prejudice of the first buyer. registration will constitute a registration in bad faith and
will not confer upon him any right. (Salvoro vs. Tanega,
In his commentaries on the Civil Code, an accepted authority on the subject, 87 SCRA 349 [1978]; citing Palarca vs. Director of Land,
now a distinguished member of the Court, Justice Jose C. Vitug, explains: 43 Phil. 146; Cagaoan vs. Cagaoan, 43 Phil. 554;
Fernandez vs. Mercader, 43 Phil. 581.)
The governing principle is prius tempore, potior
jure (first in time, stronger in right). Knowledge by the Thus, the sale of the subject parcel of land between petitioners and Ramona
first buyer of the second sale cannot defeat the first P. Alcaraz, perfected on February 6, 1985, prior to that between petitioners
buyer's rights except when the second buyer first and Catalina B. Mabanag on February 18, 1985, was correctly upheld by both
registers in good faith the second sale (Olivares vs. the courts below.
Gonzales, 159 SCRA 33). Conversely, knowledge gained
by the second buyer of the first sale defeats his rights Although there may be ample indications that there was in fact an agency
even if he is first to register, since knowledge taints his between Ramona as principal and Concepcion, her mother, as agent insofar
registration with bad faith (see also Astorga vs. Court of as the subject contract of sale is concerned, the issue of whether or not
Appeals, G.R. No. 58530, 26 December 1984). In Cruz Concepcion was also acting in her own behalf as a co-buyer is not squarely
vs. Cabana (G.R. No. 56232, 22 June 1984, 129 SCRA raised in the instant petition, nor in such assumption disputed between
656), it has held that it is essential, to merit the mother and daughter. Thus, We will not touch this issue and no longer
protection of Art. 1544, second paragraph, that the disturb the lower courts' ruling on this point.
second realty buyer must act in good faith in registering
his deed of sale (citing Carbonell vs. Court of Appeals, 69 WHEREFORE, premises considered, the instant petition is hereby DISMISSED
SCRA 99, Crisostomo vs. CA, G.R. No. 95843, 02 and the appealed judgment AFFIRMED.
September 1992).
(J. Vitug Compendium of Civil Law and Jurisprudence,
SO ORDERED.
1993 Edition, p. 604).

Petitioner point out that the notice of lis pendens in the case at bar was
annoted on the title of the subject property only on February 22, 1985,
whereas, the second sale between petitioners Coronels and petitioner
Mabanag was supposedly perfected prior thereto or on February 18, 1985.
The idea conveyed is that at the time petitioner Mabanag, the second buyer,
bought the property under a clean title, she was unaware of any adverse
claim or previous sale, for which reason she is buyer in good faith.

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Article 774, Wills and Succession

issued by Perfecto Dacasin, Barangay Agrarian Reform Committee (BARC)

Chairman of Barangay Lelemaan, Manaoag, Pangasinan, that petitioner is
a bona fidetenant of the subject landholding and that he was ejected from it
[G.R. No. 172287 : January 15, 2010] sometime in April 1991; (b) Affidavit executed by Julian, Sr., stating that, with
respondent's consent and approval, he transferred his tenurial rights to
WELFREDO CENEZE, PETITIONER, VS. FELICIANA RAMOS, RESPONDENT. petitioner before he migrated to the United States in 1981; and (c) Joint
Affidavit of Epifanio Castillo, Romulo Camesario and Maximo Caquin,
DECISION tenants of adjacent landholdings, attesting that petitioner was a tenant of
the landholding since 1988, and that they helped in
NACHURA, J.: harvesting palay products and delivering to respondent her share in the
harvest.
This is a petition for review on certiorari of the Court of Appeals (CA)
Decision[1] dated December 29, 2005 and Resolution[2] dated April 7, 2006, On April 21, 2004, the Department of Agrarian Reform Adjudication Board
which dismissed petitioner's complaint before the Provincial Adjudicator. (DARAB) affirmed the decision.[7]

Petitioner Welfredo Ceneze[3] filed an action for declaration as bona Respondent elevated the case to the CA through a petition for review. On
fide tenant-lessee of two parcels of agricultural land owned by respondent December 29, 2005, the CA resolved the petition in favor of respondent
Feliciana Ramos. The two lots are located in Lelemaan, Manaoag, landowner and dismissed petitioner's complaint, thus:
Pangasinan, with an aggregate area of 12,000 square meters. Petitioner
alleged that in 1981, Julian Ceneze, Sr. (Julian, Sr.), petitioner's father, WHEREFORE, the appealed decision of the Department of Agrarian Reform
transferred his tenurial rights over the landholding to him with the consent Adjudication Board is REVERSED and SET ASIDE and another rendered
and approval of respondent and that, since then, petitioner had been in dismissing Wilfredo Seneze's complaint before the Provincial Adjudicator.
actual and peaceful possession of the landholding until April 12, 1991, when
respondent forcibly entered and cultivated the land for the purpose of SO ORDERED.[8]
dispossessing petitioner of his right as tenant. The complaint prayed that
judgment be rendered declaring petitioner as the bona fide tenant-lessee of In a Resolution dated April 7, 2006, the CA denied petitioner's motion for
the landholding.[4] reconsideration for lack of merit.[9]

In her defense, respondent denied that a tenancy relationship existed Petitioner filed this petition for review, alleging that the CA decided the case
between her and petitioner, asserting that she had never instituted not in accord with existing law and jurisprudence when it held that petitioner
petitioner as a tenant in any of her landholdings. She averred that petitioner failed to establish that he had a tenancy relationship with respondent.[10]
had never been in possession of the landholding, but admitted that it was
Julian, Sr. who was the tenant of the landholding. When Julian, Sr. migrated The petition is not meritorious.
to the United States of America (USA) in 1985, respondent allowed Julian,
Sr.'s wife to cultivate the land, but she herself migrated to the USA in June In resolving this petition, the Court is guided by the principle that tenancy is
1988. Respondent later allowed Julian, Sr.'s son, Julian Ceneze, Jr. (Julian, not purely a factual relationship dependent on what the alleged tenant does
Jr.), to cultivate the landholding, but he likewise migrated to the USA in 1991 upon the land; it is also a legal relationship.[11] A tenancy relationship cannot
without informing respondent. From then on, she took possession of the be presumed. There must be evidence to prove the presence of all its
landholding, cultivated it and appropriated for herself the harvest indispensable elements, to wit: (1) the parties are the landowner and the
therefrom. On April 8, 1991, she reported to Gloria Calpito, Municipal tenant; (2) the subject is agricultural land; (3) there is consent by the
Agrarian Reform Officer (MARO) of Manaoag, Pangasinan, the landowner; (4) the purpose is agricultural production; (5) there is personal
abandonment of the landholding by Julian, Sr., his wife and his son, Julian, cultivation; and (6) there is sharing of the harvest.[12] The absence of one
Jr.[5] element does not make an occupant of a parcel of land, its cultivator or
planter, a de jure tenant.[13]
On December 19, 1997, the Provincial Adjudicator rendered a decision in
favor of petitioner. The dispositive portion of the decision states: To support his claim, petitioner submitted a Certification issued by the BARC
Chairman attesting that the former is a tenant of the landholding, but such
WHEREFORE, premises considered, judgment is rendered declaring certification is not binding on this Court. The certification or findings of the
Complainant WILFREDO SENEZE (sic) as bona fide tenant of the subject Secretary of Agrarian Reform (or of an authorized representative)
landholding. concerning the presence or the absence of a tenancy relationship between
the contending parties are merely preliminary or provisional in character;
Order is hereby given to Respondent to maintain Complainant in peaceful hence, such certification does not bind the judiciary.[14]
possession and cultivation of said parcel of land.
From our own assessment of the evidence at hand, we find that petitioner
SO ORDERED.[6] failed to establish the existence of a tenancy relationship between him and
respondent. To prove a tenancy relationship, the requisite quantum of
In finding that petitioner is a bona fide tenant-lessee of the landholding, the evidence is substantial evidence, or such relevant evidence as a reasonable
Provincial Adjudicator relied on the following documents: (a) Certification mind might accept as adequate to support a conclusion.[15] The Certification
of the BARC Chairman and the affidavits of Julian, Sr. and of the tenants of
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Article 774, Wills and Succession

the adjacent landholdings certainly do not suffice. By themselves, they do

not show that the elements of consent of the landowner and of sharing of
harvests are present.

To establish consent, petitioner presented the Affidavit executed by Julian,

Sr. However, the affidavit --which was not notarized-- cannot be given
credence considering that it was not authenticated. It is self-serving and
unreliable. There should have been other corroborative evidence showing
that respondent consented to and approved of the transfer of tenurial rights
to petitioner.

The other tenants' Joint Affidavit, likewise, fails to prove that petitioner is a
tenant, more particularly, that there was personal cultivation and sharing of
the harvest. In this affidavit, the affiants stated that they "helped hand in
hand with [petitioner] in harvesting and threshing our palay products and
helped him in delivering the share of [respondent] every year." The affidavit
is ambiguously worded, considering that the affiants are also tenant-lessees
of respondent and they could be referring to their own harvest. Moreover,
as noted by the CA, the affiants' averment that petitioner became a tenant
of the landholding since 1988 runs counter to petitioner's allegation that he
became a tenant in 1981.

In any case, the fact alone of working on a landholding does not give rise to
a presumption of the existence of agricultural tenancy. Substantial evidence
requires more than a mere scintilla of evidence in order that the fact of
sharing can be established; there must be concrete evidence on record
adequate enough to prove the element of sharing. [16] To prove sharing of
harvests, a receipt or any other evidence must be presented, because self-
serving statements are inadequate. In this case, petitioner failed to present
a receipt for respondent's share in the harvest, or any other solid evidence
proving that there was a sharing of harvest.

To recap, petitioner is not a de jure tenant entitled to security of tenure.

There being no tenancy relationship between the parties, the DARAB did not
have jurisdiction over the case. We, therefore, sustain the ruling of the CA,
dismissing petitioner's complaint.

WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated

December 29, 2005 and Resolution dated April 7, 2006 are AFFIRMED.

SO ORDERED.

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